CEO at Stone Age † Keynote speaker | Thought Leader | Consultant | Author | Podcast Host | YPO member.
The world is changing fast and it’s hard to keep up. What worked yesterday may not work tomorrow. Working on using water to clean and watching the nation’s largest reservoirs shrink to next to nothing is forcing my team to consider a different future. Many leaders are doing the same in their industry, asking, “How do I build a sustainable business when the future looks very different?”
So, what kind of leader will successfully face these challenges? What will leaders look like to disrupt their industries and avoid being disrupted themselves? How will leaders balance the old with the new, the core business with future opportunities? My answer is that we will have to be ambidextrous leaders.
According to a Deloitte Insights report“At its core, ambidexterity is the ability to leverage current conditions by optimizing the operations of the current business model while exploring opportunities to redefine that business model by taking breakthrough risks.”
I love this leadership framework because let’s face it, everything changes all the time. But the phrase ‘You have to embrace change’ is overused and challenging for many people. Most people don’t want to change; the fear of the unknown is too great.
But as leaders, especially those who want to disrupt, we must embrace the inherent tension between how things are now and how things will change in the future. We must recognize that new opportunities may not fit into an established system or way of doing business. Embracing this tension is a recipe for success. You don’t have to throw away the old to pursue the new – at least not most of the time. But you must strike a balance between operating your current core business by reducing costs and becoming more efficient by exploring new opportunities that require investment and flexibility. You have to be able to keep seemingly opposing ideas in your head and look for ways you can do both: exploit and explore.
So, how do you develop ambidexterity in yourself and others? This is something I’ve been working on for over ten years, and it’s not easy, but it’s worth it. Here are three ways to become a more ambidextrous leader.
1. Question your thoughts and assumptions.
It is not easy to keep opposing points of view in mind; many people are not wired to explore multiple truths and challenge their beliefs. But if you want to disrupt, you have to force yourself to question your thoughts and ideas.
Here are two ways I’m doing this that you can try: First, if you’re working on a long-term strategy, write down what you think your business will look like in five years. Then force yourself to write five other possible futures. This exercise will help you avoid drinking your own Kool-aid, and it will stimulate your thinking so you can spot patterns and spot opportunities you might otherwise have missed. Second, if you think an idea or thought is right, challenge yourself to develop five different possibilities that prove you wrong.
By actively questioning your thoughts and assumptions, you can see that there can be multiple truths in a situation and you can keep those different and opposing ideas in your head.
2. Develop an exploit-and-explore vision.
Building on the status quo is always easier than creating a bold new vision that forces people to change. But this prevents you and your organization from exploring new growth opportunities. That is why you should build both exploitation and exploration into your vision of the future.
At my company, for example, we develop high-pressure water jet tools for cleaning. It is a very manual industry and slow to change. But we found that automation could make the process safer and more efficient. However, the industry’s transition to the use of automation would disrupt the space and potentially take away our core business of manual tools. So before I got my team on board, I needed to develop an exploit-and-explore vision that I thought was possible, that I could articulate, and that would inspire my team to execute.
How can you build both exploration and exploitation into your business? Start by encouraging your team to look for new ideas and opportunities beyond the status quo. This stimulates the mentality and creativity of an experimenter. I also suggest constantly looking for ways to add value to new and existing customers. When you take on exploration activities, you create metrics and goals that are aligned with experimentation and growth, not efficiency and standard profit margins. Trying to adapt new businesses to the way things are done in your core business is stifling opportunities.
In addition, hold your team accountable for reducing costs and finding efficiencies in core activities. Reward them for finding economies of scale and using current technologies and services more efficiently. This stimulates the exploit mindset.
Finally, talk about the tension between exploration and exploitation to make sure everyone understands where there might be conflict, and help your team navigate the push and pull they feel as they try to balance these two opposing business models. Developing executive compensation models that reward broad business performance for both exploration and exploitation activities can also reduce silo behavior.
3. Be non-uniform.
The biggest mistake I’ve made when exploring and expanding new businesses is trying to force those solutions into our core business model, which doesn’t work. Not everything has to be uniform or consistent, and trying to make it that way increases the likelihood that the new endeavor will fail. Be OK with different business models, cost and opportunity structures, and measures of success.
Encourage risk-taking and creativity as you explore, and set goals for growth and innovation. When you operate, focus on cutting costs and creating efficiencies. Wrap your head around the fact that they are very different activities that require different structures, and grow each in their own way.
If you want to be a creative, innovative and effective leader, you need to develop your ambidexterity. It’s not easy, but it’s a richer path to success in these volatile and opportunistic times.