Organizaciones y líderes ambidiestros: el nuevo paradigma. EY Boot Camp Costa Rica, August 9th Dr. Jens Maier

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1 Organizaciones y líderes ambidiestros: el nuevo paradigma EY Boot Camp Costa Rica, August 9th 2018 Dr. Jens Maier

2 From horseless carriage to driverless car Dr. Jens Maier 2

3 3 Structure Introduction: Ambidexterity, why important? Your Case: Ambidexterity EY: Challenges/Solutions Summary Dr. Jens Maier 3

4 4 Triggers for Convergence & The Need for Ambidexterity Convergence between industries Car as mobile Data Center; Google, Apple, BMW, etc... Mega trend of Aging Population Pharma, Insurance, Smart Packaging, e-health in the car Wearables to collect data at points of consumer (patients!?) Hydro companies provide home safety information Power storage solutions (e.g.tesla) Technology Digitization: The Perfect Storm Smart phone Cloud computing Big data Social media Internet of everything Dr. Jens Maier 4

5 5 Convergence: Challenges and Opportunities Challenges: Obsolescence of current products and services Traditional business models become out-dated Devaluation of current organizational capabilities New, unknown or unexpected competitors Opportunities: New levels of engagement with customers (point of sales data versus point of consumer data) More valuable relationships contribution to societies New, creative partnerships and alliances Dr. Jens Maier 5

6 6 Ambidextrous Organizations Leading innovation using both hands: o o Exploitation; making existing products and processes better Exploration; pushing the boundaries of markets/technologies Ambidextrous organizations are more successful; integral part of a high performance culture Changes in the environment, such as digitization or an aging population create exploration opportunities and create disruptive opportunities Collaboration - ambidextrous organizations succeed through internal and external collaboration Dr. Jens Maier 6

7 The automotive industry will undergo massive changes during the upcoming 10 years BMW Group Investor Presentation, September

8 Chances for BMW Group for further growth BMW Group Investor Presentation, September

9 The organizational journey of discovery FROM TO 9

10 Strategy #1: Managing technological change to remain future proof Translation: Ambidextrous Organization Exploitation: To stay adaptive to today s business challenges (evolution) AND Exploration: To stay adaptive to disruptive changes in the environment (revolution) 10

11 11 10 Types of Innovation More Than Products! The Original Doblin Model 1. Payment model how the enterprise makes money 2. Networking enterprise s structure/ value chain 5. Product performance basic features, performance and functionality 6. Product system extended system that surrounds an offering 7. Service how you service your customers Finance Process. Offering Delivery Payment model Networking Enabling process Core process Product performance Product system Service Channel Brand Customer experience 3. Enabling process assembled capabilities 4. Core process proprietary processes that add value 8. Channel how you connect your offerings to your customers 9. Brand how you express your offering s benefit to customers Source: Doblin, Chigaco 10. Customer experience how you create an overall experience for customers Dr. Jens Maier 11

12 12 Using Innovation Types Strategically Finance Process. Offering Delivery Payment model Networking Enabling process Core process Product performance Product system Service Channel Brand Customer experience Core competence planning: Offering & Process Innovation planning: Payment Model Customer Experience Source: Doblin, Chicago Dr. Jens Maier 12

13 13 Number of Innovation Efforts Finance Process. Offering Delivery Payment model Networking Enabling process Core process Product performance Product system Service Channel Brand Customer experience Hi Volume of innovation efforts Last 10 years Lo Source: Doblin, Chigaco Dr. Jens Maier 13

14 Example: Innovation Landscape in Financial Services 14

15 Insights from Innovation Landscapes Continue to innovate in the peaks of the innovation landscape; continuous improvement In addition, identify the valleys in the innovation landscape Launch projects to address minimum 3-5 types of innovation simultaneously; look at the Nespresso Example of Nestle Implication: a number of functional departments involved Innovation beyond Product and Processes Towards Business Model Innovation: - Who? - What? - How? - Where? Dr. Jens Maier 15

16 16 Structure Introduction: Ambidexterity, why important? Your Case: Ambidexterity EY: Challenges/Solutions Summary Dr. Jens Maier 16

17 17 Define: Organizational Ambidexterity An organization s ability to be... Aligned and efficient in the Management of today s business demands while simultaneously being... adaptive to changes in the environment Source: Duncan,1976; Tushman & O Reilly, 1996; Gibson & Birkinshaw, 2004) Dr. Jens Maier 17

18 18 Ambidexterity: The either/or View Reconciled Exploitation Short-term Performance Harvest past Investments But.. Competency trap: unable to respond to environmental Changes Exploration Renew Knowledge Base New Markets/Technologies But Trap of potentially endless Cycle of Search and unrewarding Change To engage in enough Exploitation to ensure the Organization s current Viability and enough Exploration to ensure future Viability Source: Levinthal & March (1993) Dr. Jens Maier 18

19 19 Exploitation and Exploration Example: Apple 1983 Apple Lisa 1998 imac Exploitation 2001 ipod 2007 iphone 2010 ipad Exploration 2006 MacBook Air Dr. Jens Maier 19

20 Structural versus Contextual Ambidexterity Structural Ambidexterity Contextual Ambidexterity Exploitation and Exploration in two separate organizational units Exploitation and Exploration simultaneously in the organizational units Exploitation Exploration Exploitation & Exploration Exploitation & Exploration Source: Raisch, S./ Birkinshaw, J./ Probst, G. et. al. (2009): Organizational Ambidexterity: Balancing Exploitation and Exploration for Sustained Performance, in: Organization Science, 20. Jg., Nr. 4, S Dr. Jens Maier 20 20

21 Ambidexterity as Corporate Capability: Leading Exploitation and Exploration Structural Ambidexterity Separation of exploitation and exploration in different organizational units. Possibly separate processes and scorecards Contextual Ambidexterity Leaders in the organizational units are responsible for both exploitation and exploration. Leaders understand how to handle the different processes Challenges in Implementation Organizational structure: reporting line for exploration unit? Recruitment: internal/external? Establishment of separate exploration processes and performance criteria? Consolidation at top level tension is delegated back to the top team. Impact on idea of leadership at all levels? Leader on stage Under pressure, where is personal preference? Tension at level of individual leader: Forum for discussing personal tension? Application of different performance criteria how to deal with failure? Resist pressure to play it safe? Source: Raisch, Birkinshaw, Probst, Tushmann, 2009; O Reilly, Tushmann 2008; Birkinshaw, Gibson 2004 Dr. Jens Maier 21 21

22 22 Structure Introduction: Ambidexterity, why important? Your Case: Ambidexterity EY: Challenges/Solutions Summary Dr. Jens Maier 22

23 Shaping Game Clear: But now: American football? OR Cricket? Not clear, ambiguity Predicting? Forecasting? OR Lacrosse? Having a point of view! 23

24 Point of View 1. Put stake in ground X 2. Find network partner X 3. Create a common picture/vision 4. Add missing pieces to the picture Competition: My network vs. your network X X 24

25 Convergence Engineering Shaping Game: Convergence: X X X X X -A dominant player -Number of satellites - A number of dominant players - Common picture - Eagles flying in formation 25

26 26 Identifying and Dealing with Orthodoxies Embedded beliefs that anchor the organisation Examples: - Supermarkets check out - Hotels - check in - Pharmaceuticals development - Insurance best risk Dr. Jens Maier 26

27 The Role of Sponsors in Exploration Provide go-ahead Access to functional experts Exploration budget AT START Do s: - Rules - Access to resources Don ts: - No ROI Questions! AT REVIEW Do s: - Praise action - Punish inaction - Ask for ROI! Don ts: - Punish kill recommendations 27

28 Exploration Process Pre-Work Initiation Project Phase 1 End Phase 1 Start Phase 2 Project Phase 2 Potential Projects and Leaders identified, including Topic, Sponsor, 2-5 Supporters. Scoping Innovation Landscape Sponsorship Stakeholder Management Project Plan for next 2 Months Product-Market Fit kill or accelerate Viability MVP Go-to-Market Strategy 28

29 Implications for Building Ambidextrous Organizations Simultaneous building of: Competencies: Fähigkeiten of individual Leaders Capabilities: Fähigkeiten of the Organization: Capabilities stay when the Competencies have gone Home Organizational capabilities Individual competencies 29

30 Strategic Imperative: Balancing Leaders Needs with those of the Organization Leadership Competencies Organizational Capabilities Existing Competencies should be augmented by additional Competencies such as: Creating Points of view drive Industry Convergence Balance Speed with Thoughtfulness To be able to challenge classic Thinking in fact, challenge Orthodoxies Influencing (without Power) Identify new Business Models Run and sponsor Exploration Projects To be comfortable with Ambiguity and of course to be able to do all that with Passion and Urgency! The Future will demand the Development of additional Capabilities such as: Exploration Processes to drive Convergence between Industries Partnering with Organizations from other Industries Speed (potential Partners from other Industries may have faster Clock-Speeds ) Additional Revenue Streams - collect small Revenue Amounts (as a result of the Car being a mobile Data-Center ) Data Collection and Data Management (Data Security) for additional Business Opportunities 30

31 31 Ambidexterity: Demands on Leaders Dealing with Ambiguity Influencing without power Self-Awareness: Personality Big Five - Neuroticism - Extraversion - Openness to Change - Conscientiousness - Agreeableness Knows when to put the pen in the other hand Dr. Jens Maier 31

32 Structure Introduction: Ambidexterity, why important? Your Case: Ambidexterity EY: Challenges/Solutions Summary Dr. Jens Maier 32

33 33 Summary Cross-industry convergence is taking place how can organizations respond to protect existing business and, simultaneously shape new markets? Academic research indicates that ambidextrous organizations are more successful: they can balance exploitation in order to deliver short-term results, whilst also using the other hand, exploration Exploration initiatives will require the collaboration across functional departments inside an organization, and often beyond the organization The role of games: trigger for ideation at the levels of - individual - organization - cross-industry Ideation is only the first step towards successful implementation Dr. Jens Maier 33

34 Contact and Further Reading Dr. Jens Maier University of St. Gallen Institute for Leadership and Human Resource Management Tel Developing Leaders Quarterly Shaping the Game Jens Maier May 2015 The Ambidextrous Organization Jens Maier Palgrave Macmillan, July 2015 Wirtschaft und Weiterbildung Mit beiden Händen Innovation vorantreiben Jens Maier May 2015 Personalmagazin Zehn Arten von Innovationen Jens Maier February 2016 Dr. Jens Maier 34