A Both/And Framework
Situation: A large mature firm is attempting to develop a radically new venture alongside the established "cash cow" business. The senior manager/s over both of them faces the challenge of protecting the distinct cultures of each, especially the new venture, which can easily be overwhelmed and resocialized by the wealthy, powerful, older business. Then there would no longer be a radical new innovative option in the parent company.
The culture of each of those divisions is bound to be quite different - if only because one is refining ("exploiting") a proven, profitable product while the other is "exploring" - trying to build on a novel idea, still unproven.
The new venture needs not only shelter from its "big sib" but the benefit of certain "family assets" - where appropriate. Senior managers who can guide a new venture through these tricky waters have an Ambidextrous set of responsibilities. In addition to protecting the innovative division , while giving it access to in-house resources, there can be gains to the parent ORG if new ideas/knowledge can be transferred from the newcomers to the established players. This can be viewed within the "big picture" duties of senior managers, especially when they function as a true Top Management Team. This is Ambidextrous Management. Without this support from above the managers of new innovative divisions may be doomed. (Ref. - O'Reilly & Tushman)
Ambidextrous Management - central, top-level approach
New start-up firms are totally devoted to exploiting their initial idea. When they become successful there are choices either to stay mostly with that direction or to also explore and develop a second, backup business line as their insurance against more innovative competitors.
An innovation (like a baby) is usually born weak, clumsy at first. It needs parental care and shelter for a time. A young child needs guidance to grow up basically like its parents but (here is the difference) a radical organizational innovation needs to grow up different from its guardians. 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. Managing both, allowing the novice to develop a different ORG culture alongside the well-established "cash cow)" is hard. It goes beyond the usual management advice that emphasizes "alignment".
O’Reilly, C. A. & Tushman, M. L. (2004). The ambidextrous organization. Harvard Business Review, April, 2004, 74-81.
O’Reilly, C. A. & Tushman, M. L. (2011). Organizational ambidexterity in action. California Mgmt. Review, Summer, 2011.
Org builds long-term survivability by investing in radical, risky next-generation innovations.
former mental models.
Org. priority is to maximize current profits by putting main efforts into proven "cash cows" (established business assets).
Result: innovation ventures are rejected, neglected, starved or socialized into conformity to dominant org. culture.