Leadership and leadership principals as key catalysts to accelerate the journey towards ambidexterity
Arthur D. Little’s executive roundtable “Ambidextrous Organizations” in Munich on January21 combined impulse presentations from executives with interactive discussions between all participants, around how to manage adaptability & flexibilityand standardization& efficiency at the same time. The presentations and discussions revealed the importance of consistently implementing leadership principles in the whole organization, and emphasized both exploitation of the core business and exploration of new opportunities. Wilhelm Lerner, Partner and Head of Arthur D. Little’s Strategy & Organizationpractice in Central Europe, opened the roundtable, gave an introduction into the topic and defined “ambidextrous organizations” as companies that continuously solve the trade-off between being fast & creative and scale-driven & productive. As such, they can establish an equilibrium characterized by strong emphasis on both dimensions.The need for such a balance is apparent, as new ways to organize and manage companies are necessary due to technological, economic, societal, ecological and political changes.Accordingly, if companies want to succeed in this complex world, they need to excel at exploiting their core businesses and exploring new opportunities.
Leadership principlesas key success factor
The evening revealed that one key challengefor most companiesis to align all employees around the company’sessenceand way of doing business. A second key challenge is to standardize and scale the organization while staying innovative and open to new opportunities.
The participants agreed on five factors that are vital for digital centric companies to thrive:
- Agility: Fast decision-making processes andquick responses to the market
- Connectivity: A variety ofdifferentcommunication channels
- Empowerment: Clarity about the organization’s vision andgoals and individual contributions
- Transparency: Presence of leadership philosophy and ethical principles
- Customer-centricity: Customers’ needs as overarching criteria for all decisions
An excellent way to implement the factorsis to translate them into correspondingleadership principles.The most essentialaspectof leadership principles is not so much the principles themselves, butrather the consistency with which they are implemented across the organization.Additionally, it is important that these principles cover both aspects of ambidextrous organizations. They need to demand from managersto be task-and human-oriented and strive for scale and creativity.
By talking about goodexamples of leadership principles the attendees highlighted the importance of customer-centricity. It ismore crucialthan everto understand the customers’ pains, gains and needs and make all decisions based on them. Innovative solutions are in high demand to matchthe customers’ needs and stay ahead of the competitive curve. However, acertain level of error tolerance is vital for the flourishment of an innovation culture as mistakes can provide insightful learnings.
Consistency and omnipresence are crucialfor the implementation
The roundtable discussed the issue ofimplementing the principles because most organizationsstruggle with living up to theirs. The main conclusion was that the principles need to be modeled by every manager and especially the top management. Additionally, they need to be implemented across the whole organization, e.g.serve asselection criteria for new hiresand be the basis forperformance evaluationsand promotions.
By talking about transitioningto ambidexteritythe leadership principlesare criticalas the leaders haveto make the first steps and appreciate the core business as well asinnovative projects.All employees need to understand that both parts areimportant for the long-term success of the company.
As there is a clear need for balancing productivity & scale with speed & creativity to succeed in today’s complex and fast-changing world, everytransformation needsto start with the leadership team and therefore consistently implemented leadership principles acrossthe whole organization are the key to success.