Managing two crews at the same time

Imagine this: you manage a shipping company that has two ships. One is a large oil tanker, the other is a small exploration ship. Would you manage them the same way? I think not. Chances are that both require different approaches to get the most out of them and their respective businesses. Managing them with a one size fits all approach will result in personal frustrations and probably frustrating results for one, or worse, both ships.

You can prevent this from happening by what is called ambidextrous management. Yes, this should be nominated for worst named management term ever, but the concept is really useful. Think of it as a management system that actually consists of two subsystems. One is focused on generating as much value as possible through the existing business (in technical terms: exploitation). The other is focused on searching for possibilities to create value in the future (in technical terms: exploration). Both systems are part of the same organization and therefore somehow related and have to be managed as such.

Management thinkers have discussed how to manage the exploitation/exploration balance for over forty years. During the ´80´s, the most dominant thinking on this balance was as a boom/bust cycle. You explore, you find something incredible, scale it, exploit it until it becomes depleted and start over. This is however a truly resource destroying approach, because everything becomes obsolete at the end of such a boom/bust cycle. Since current markets are much more dynamic, your chances to survive these boom/bust cycles are slim. The solution is to balance exploitation and exploration simultaneously. Let’s take a look at both a bit more in depth.

Exploitation

This is your core business, probably it has been for some time. Management is focused on cost efficiency, you use Lean management to improve your performance and everybody gets smacked with formats for everything that happens. Your core business is a machine and you let your exploiters run it like a machine, squeezing every drop of performance out of it. This is important, because this is where you (hopefully) are making money. This is however also how larger enterprises manage every new idea that comes along. Don’t you? If you do: red alert. This is bad, not good.

Exploration

To create the future, you need to create the space to explore what that future could be. Of course plenty of corporates have “labs”, “experience centers”, “open spaces” and what not. These spaces require different kind of systems, processes and skill sets — yes, let the whole Lean Startup, Agile, Design Thinking, experience design bonanza happen here. But without shaping the context for these go-wild-reinvent-the-world-places, these will eventually deliver zero business value, do nothing to transform the core business and leave both senior management and the explorers in these teams dissatisfied and hopeless.

Balancing act

The most important part of these sub-systems is really the balancing between them, and this is foremost a senior management challenge. Because when the exploring is done, the growing needs to start. You need to determine what growth initiatives will strengthen your core and which will eventually become your new core business. You need to start reshaping the crews, let the exploiters take over from the explorers. Your explorers can begin to explore yet another growth initiative, and with that your company is now in perpetual motion.

Congratulations, you just became future proof!

This is the last blog in our series on building blocks for future proof organizations. We would love to hear your thoughts below or send us a message.