Balancing Exploitation and Exploration to Improve Performance

Ambidextrous organizations need to balance exploiting existing investments while exploring new opportunities. The challenge lies in allowing for dual thinking and organizational design to optimize both orientations. Exploiting deals with the current business, while exploring is new territory, in terms of new technologies, markets, positions, products, services, and business models. Apple, GE, and Google are examples of highly ambidextrous and unique approaches to achieving both. Apple is an efficient company that is excellent at exploiting new technologies and translating exploiting to new value propositions. GE, on the other hand, is a bottom-line focused organization that is exploring new ways through the Industrial Internet to drive machine performance. Google made a radical bet by creating a new holding company called Alphabet, and they separated and determined the right approach to strategy and execution for each part of the business. Balancing exploiting with exploring is managing often opposing tensions, which requires effective management of resolving conflicting objectives to deliver a combined business that performs at higher levels of success.