Organisational Range Anxiety: Nothing Vast Enters Life Without a Curse
“Nothing vast enters the life of mortals without a curse.” — Sophocles (Ancient Greek playwright)
In 2008, the term Nomophobia emerged amidst the proliferation of the use of mobile phones. Nomophobia (NO MObile PHone PhoBIA) describes the psychological condition when people fear being detached from mobile phone connectivity. This can include the fear of an empty battery. With the proliferation of electric vehicles, we see a similar phenomenon known as range anxiety.
Range Anxiety is the fear that an electric vehicle will not have enough battery to reach its destination. I experienced range anxiety recently when I drove to a remote destination hotel in rural Ireland. I have just purchased an electric car and trialled the car first. I had a board meeting in the west of Ireland, and I did the maths and gauged my range. I would have just enough battery. Unaware that listening to music and heating my seat drastically depletes the battery, the last hour of my trip was a torrid affair. The rural roads had very few houses let alone a charging station to charge my car. As I approached the hotel with everything turned off, the car chugged to a halt as I rolled up to the charger. I made it! No, I didn’t. The charger was out of order, so I had to wait until the occupied charger beside it became available. Lesson learned.
This polarity of the advantages and disadvantages introduced with any new technology has always existed. Social media connects us yet drives us apart. Virtual work gives us freedom, yet it can enslave us in our own homes. Artificial Intelligence offers efficiency yet replaces jobs. Joseph Schumpeter’s “Creative Destructive” reflects this duality of pros and cons.
Schumpeter argued that new technologies introduce both positive and negative phenomena. The positive is the creation of new markets, products, and ways of doing things. The negative is the destruction of old markets, products, and ways of doing things.
Ride-sharing services like Free Now, Uber and Lyft are excellent examples of creative destruction in action. Before the rise of ride-sharing, the taxi industry was dominated by traditional taxi companies that controlled the supply of taxi licenses and operated within a highly regulated environment. However, with the dawn of ride-sharing, the market for traditional taxi companies has declined rapidly.
Enter the Duality
While the decline of the traditional taxi industry destroyed many taxi companies, it created new opportunities for companies that embraced the ride-sharing model. Furthermore, the rise of ride-sharing created new opportunities for companies focused on developing autonomous vehicle technology.
When autonomous vehicles become widespread, Schumpeter’s gale will again reposition the tectonic plates of business. Companies like Waymo, Tesla, and Cruise have been working to develop self-driving cars that could be used for ride-sharing, potentially disrupting the industry once again.
I was reflecting recently on how autonomous vehicles will revolutionise how we transport our kids to school, soccer practice and play dates. With autonomous vehicles, this time for connection may be lost. However, do we lose precious moments of connection while gaining valuable time lost driving? Sophocles was spot on, “Nothing vast enters the life of mortals without a curse.”
This duality has always been a reality in the business world; once a business becomes technologically driven, the speed of change increases…exponentially. And as Ray Kurzweil expressed, “As any technology becomes an information technology, it starts advancing exponentially.” When operating in the realm of exponential change, leaders must lean into what our guests on the latest series of The Innovation Show, Charles O’Reilly and Michael Tushman call ambidexterity. This approach lets a company play two games simultaneously to explore the future while exploiting the present. Ambidextrous organisations maintain a portfolio of businesses at different stages of maturity; some experimental, others mature profit engines. The key is to separate explore ventures from the core business, thus enabling both units to execute strategies appropriate to their maturity.
Organizations can sustain their competitive advantage by operating in multiple modes, simultaneously managing for short-term efficiency by emphasising stability and control, as well as for long-term innovation by taking risks and learning by doing.
Before this era, characterised by rapid change cycles, organisations could enjoy long periods of competitive advantage, but those days are long gone. Today, at best, organisations can enjoy what Rita McGrath calls a transient advantage. Incumbents must harness their inner Schumpeter and create and destroy from within their firms. These antithetical types of innovation require contrasting structures, systems, rewards, human resources, networks, and cultures.
During periods of competitive advantage and slow change, the exploit-minded units emphasise relatively formalised roles and responsibilities, centralised procedures, functional structures, efficiency-oriented cultures, highly engineered work processes, strong manufacturing and sales capabilities, and relatively homogeneous human resources. Their cultures emphasise efficiency, teamwork, and continuous improvement.
In today’s business world of flux, explore units are agile, decentralised, experimental cultures, loose work processes, strong entrepreneurial and technical competencies, and relatively young and neurodiverse employees. In contrast to the exploit units, these small entrepreneurial units are inefficient, rarely profitable, and have no established histories. They often deliberately violate the norms valued in older parts of the organisation.
Because the explore units are wildly different from the exploit incumbent, explorers are often undermined by the parent company, whose short-term needs override exploration. While the exploit teams win in the short term, they sink the company in the long.
Intel’s late CEO, Andy Grove, was an ambidextrous leader who said, “Only the Paranoid Survive” (the title of his brilliant book). In the spirit of this article, ambidextrous leaders habitually experience organisational range anxiety.
THANKS FOR READING
For more on the Duality of Business and Corporate Ambidexterity, watch our latest series on The Innovation Show with Michael Tushman on his 1997 classic book, “Winning Through Innovation.” Part 2 is coming next week with his co-author Charles O’Reilly.
