I learned a new term while working with BMW and Strategic Leadership this week: Ambidextrous Leadership. Ambidextrous Leadership is about how you balance the challenges of today and the opportunities of tomorrow. It is about how you deliver operational excellence, while at the same time exploring the horizon for future growth. In the language I use most often, it is about how you balance optimisation, with adaptation.
Ambidextrous Leadership is a term that I had not come across before, though it is not new. It appears to have originated in the 1970s, according to this valuable summary, and been popularised in the early part of this century. Since I started researching it, I have found endless articles on the topic. This one from Deloitte is particularly worth a read, and I shall refer back to it below.
Optimisation and Adaptation
I have spent the last few years preaching that organisations must shift their focus from optimisation to adaptation. We are so focused on the performance of today’s business that it feels like a massive effort is required to create more time to focus on the future. But of course we can’t stop thinking about the business as it is today. It has to keep ticking over and even improving. Ambidextrous leadership is an attempt to create some balance.
The Deloitte article linked above suggests two modes of Ambidextrous Leadership. First is a structural ambiguity. This means hiving off the ‘skunkworks‘ division doing the high risk exploratory activity looking at tomorrow’s business models from the day-to-day work of delivering profit today. The second is contextual ambiguity, where every functional unit and even every individual must have an entrepreneurial, innovative approach alongside their focus on operational excellence.
What I realised reading this, is that my idea of Stratification really combines both of these approaches.
Stratification and ambidextrous leadership
Stratification is the idea that an organisation can be subdivided into functional layers, and that each layer can be further divided into functional segments.
Typically the organisation has four layers: a customer-facing layer, a data layer, an operational layer, and a supply-chain-facing layer. Some functions cross those boundaries, but the division is useful because it allows leaders to see where functions ought to be unified and where they perhaps ought to be divided. For example, all customer-facing functions need to be using common language, design and service principles.
Each functional segment fulfils a specific role. How narrowly these are defined varies based on the size of the organisation. But they are generally relatively small in human terms. Ideally sub-Dunbar’s number so that you can maintain a level of coherence in human-to-human communication.
The leadership of functional unit try to optimise for that unit’s narrow purpose. But critically, that purpose can be abstracted away from its role in the wider business. For example, if you have a unit that is fantastic at milling aluminium, it doesn’t have to consider itself as only the aluminium milling unit of the company. Its leadership can be entrepreneurial. They can look for opportunities to make aluminium parts for other customers. Some of these new customers might be inside the business but many will be external.
This is a low level of ambidextrous leadership.
The high level ambidexterity comes from the leadership who have oversight of all the layers and functions. Once the organisation is divided like this, they have a box of building blocks to play with. Leaders can reassemble the blocks to meet new challenges. They can create new blocks without affecting the other functions. They can use blocks from other people’s organisations easily. Or in the worst cases, they can shut blocks down.
This approach allows the lower level functions to keep the priority of delivering operational excellence, something they are well drilled in and something that is often critical to the continued success of the wider organisation. Where they are stretched to think about future opportunities, it is within a narrow context of their known abilities.
Meanwhile the senior leadership can take a more long-term, holistic view. They should be freed, both in time and responsibility, from the day to day operations of the lower level units, each of which should have its own effective and entrepreneurial leader.