What makes an organization capable of long-term success, through several phases of renewal or reinvention? I.e. what makes for dynamic capability?
It takes many success factors; here we highlight the “Both/And Factor“. This is the ability to manage conflicts between certain pairs of necessary elements that seem to be mutually incompatible, while BOTH are necessary. The specific elements may be different; some examples may be common. A well-known example is the org. need for both a focus on fully exploiting their established, successful methods and markets and the need for exploring some completely new (and risky) innovations.
New start-up firms are totally devoted to exploring. When they become successful there is a choice either to stay 100% with that direction or to also explore for a second, backup product. There are many competitors and one may produce a new, better product that destroys the former success. Sometimes it is an idea that they knew about. They have the knowledge for innovation but they don't use it. Having found a "winning formula" it is natural to embrace it, stay focused on it, and scorn other ways.
The "next innovation" (like a baby) is usually born weak, clumsy and even ugly. It needs parental care and shelter for a time. A baby needs guidance to grow like its parents but (here is the difference) an organizational innovation needs to grow up different from its protectors. The problem is how to provide the innovation with BOTH the resources to grow stronger AND the freedom to grow in its own (new) way. This is much more work than just staying focused on one set of related products. Building dynamic capability requires learning how to manage Both/And challenges in organizations. Let's continue to simplify this idea, at the individual/family level.
This duality challenge/conflict is well-known to parents and educators of young adults. What do these young people most need from their parents/mentors?
- one good answer: they must have unconditional love
- another good answer: they need firm rules, expectations and limits
At first these principles seem in conflict; opposites - Hard and Soft; one negates the other. Which one is more important? Both cannot exist together - apparently.
But BOTH are absolutely needed. Either one alone leads to failure.
There are various approaches for this challenge. (E.g. each parent takes the lead on one or the other requirement, with a marriage counselor if possible; or the child is placed in a school designed for this role ...)
In organizations it is more complex but the essence of the challenge is similar. A serious (existential) challenge arises which will require two major inputs. But these two factors cannot live together; without special treatment and organization, they repel each other - under present conditions. How can those conditions be changed ?
It is not a matter of finding a compromise. At different stages there are different needs sometimes for seclusion, sometimes for learning skills from the old culture but protection from some of their values and priorities...). Who decides on the timing? Where is the new project housed?
What is needed here is "Ambidextrous Management" to handle the Both/And situation.
This conflict between Exploitation of what we know and Exploration of new possibilities is not the only type of serious Both/And conflict that can face organizations.
Another example is the older conflict between Quality and Cost. Before "the Total Quality Movement" it was widely believed that higher quality always requires higher cost and lower cost always means lower quality. It seemed like a law of nature. But the Lean Management revolution begun by Japanese manufacturers made profound differences to the organization of factories under which quality could be improved AND costs lowered, if the Lean Management methods and philosophy were properly implemented. It took at least ten years but that Both/And revolution has happened.
I am proposing that an Org. Theory that can be useful must include this Both/And framework, linked with Org. Learning and Conflict Management.
Duality conflicts are common and not often identified as such. As a result policies often swing pendulum-like from favoring A one time to favoring B when forces or chief executives change. Better results are likely when the main actors use a Both/And approach in their diagnosis and work out a better way to live with the necessary conflict, with benefit from both sides.
A folksy image for this approach would see it as a system that can help these conflictual "odd couples" that need to collaborate but cannot yet transcend their deep differences to form "productive partnerships" or "golden dualities" similar to how Lean Management resolved the conflict between Quality and Cost.
Dynamic capability requires our attention to the many partnerships on which organizational learning and functional coordination depend. Many areas and levels of leadership are involved. More specifics follow on other pages. See links below.
That is the topic of my article "Dynamic Capability Seen Through a Duality-Paradox Lens: A Case of Radical Innovation at Microsoft." published in Research in Organizational Change & Development, vol. 22, June 2014 by Emerald.
DOWNLOAD the full article (pre-pub. ms).
Conflict and Collaboration
A Dualistic (Both/And)
Theory of Organization