This paper reviews Charles O'Reilly and Michael L. Tushman's 2004 Harvard Business Review article "The Ambidextrous Organization," examining their central argument that established companies can achieve radical innovation by maintaining structural flexibility. The paper outlines three levels of innovation — incremental, architectural, and discontinuous — and explains how ambidextrous organizations balance independent, breakthrough-focused units with an integrated senior management hierarchy. Drawing on examples such as USA Today and CIBA Vision's challenge to Johnson & Johnson, the paper demonstrates how companies must cultivate a culture of ongoing innovation while preserving existing operations, customers, and organizational identity.
It is often said that generals are always trying to win the last war, rather than looking ahead to what they need to do to succeed in the future. This is also true of business organizations, according to Charles O'Reilly and Michael L. Tushman's article "The Ambidextrous Organization" published in The Harvard Business Review: "Most successful enterprises are adept at refining their current offerings, but they falter when it comes to pioneering radically new products and services" (Reilly & Tushman 2004: 1). Some theorists maintain that radical innovation by established organizations is a virtual impossibility. However, O'Reilly and Tushman contend that innovation is possible, provided the organization remains sufficiently flexible.
A company must sustain its innovation at several levels. Incremental innovation — such as Apple's continual retooling of its music players and smartphones — is required on a consistent basis. But there must also be architectural innovations, such as the creation of iTunes, which changed the way music was sold, in terms of company approaches and structures. Finally, there is a need for radical, ground-breaking discontinuous innovations that fundamentally create a break with the existing product landscape — exemplified by the iPhone. Maintaining all of these types of innovation is necessary to generate a truly creative corporate culture.
The most fruitful type of creative organization, according to the authors, is designed along the lines of what they call the ambidextrous organization: "where the breakthrough efforts were organized as structurally independent units, each having its own processes, structures, and cultures but integrated into the existing senior management hierarchy" (Reilly & Tushman 2004: 2). One example of this is the USA Today organization, which shelters a wide array of newspapers and other news sources under its umbrella. On one hand, all member newspapers are somewhat distinct, serving a regional or specialty audience or carrying a unique brand identity. Yet by sharing information across newspapers, a high level of quality is maintained that is mutually beneficial for all participants in the network.
"CIBA Vision case study on radical R&D redirection"
Being ambidextrous means being able to break the mold while staying true to the company's spirit, purpose, mission, and sense of fellowship. Through incremental, architectural, and discontinuous innovation, a company must ensure that a thirst for future innovation is built into its corporate culture, even as it strives to meet the demands of the moment. An existing company must hold onto its current business and customers even while it fights the forces of complacency and inertia that can hamper its future. The task is challenging, but the examples cited by O'Reilly and Tushman underline the fact that it is essential for any company that wishes to remain a lasting success.
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