Ambidextrous leadership: how to build future-proof business growth

Greta Faccio1, Valentina Lorenzon2
1 Scientific consultant for innovation, St. Gallen, Switzerland.
2 Career and Business strategist, London, United Kingdom

This article discusses the need for leaders and organisations to move away from fixed decision-making patterns and towards new strategic approaches that encourage higher levels of adaptability.

Based on a cross-pollination of ideas at the intersection of our respective experiences in business and academia, we explore the importance of developing an adaptive leadership style that fosters the flexibility necessary to switch between different business models, in order to effectively respond to the continuous stop-and-go trajectory of the current business environment. In particular, we explain how the adoption of an ambidextrous leadership mindset – an approach that combines the exploitation of existing resources and capabilities, with the exploration of new, innovative opportunities, and the nimbleness to go back and forth between the two effectively – could help organisations develop a significant competitive advantage in today’s hyper-dynamic business environment.

How does this new geopolitical complexity impact the strategic approach of leaders and organisations?

It could be argued that in today’s business environment there is little ‘business as usual’ left because sudden and/or severe events are becoming increasingly frequent and present a series of unpredictable issues such as erratically priced raw materials, talent shortages and supply chain issues. All of these are exacerbated by high levels of interconnectedness between previously unrelated industries, markets and socio-economic factors. In addition, clients are changing their requirements and preferences much more frequently and employees are increasingly looking for a better work/life balance. The latter, in particular, can have a significant impact on the way in which a business needs to make decisions and operate. For example, it is more common for teams to be geographically spread or to work remotely, two practices that require a different leadership style, a different resource allocation strategy and a different communication approach.

In the context of this ‘new normal’, organisations are required to strategically experiment to maintain their competitive advantage and, in many cases, to develop completely new approaches, since many of the established strategies are falling short. It is therefore key to focus on learning how to perform under continuous internal and external pressures while being open to explore unconventional and multi-layered/tailored solutions. Such an intricate set of challenges requires organisations and leaders to navigate the ever-stronger dichotomies between short- and long-term objectives, doing business-as-usual and taking innovation-oriented decisions, protecting the status-quo, and promoting positive change.

Ambidextrous leadership: an adaptive leadership style in practice

A style that does not follow fixed and unchangeable behaviours but is characterised by a high flexibility to switch between different models in response to the changing context, ambidextrous leadership has been successfully applied across various industries, from technology to manufacturing via academia and many other sectors.

Let’s explore a few examples of its effective implementation as well as the skills and competencies needed for leaders to navigate high levels of complexity and uncertainty.

A. In the technology sector: technology companies like Google and Amazon are well-known examples of successfully implemented ambidextrous leadership. These companies invest in innovation and new product development while simultaneously improving existing services and processes and making sure that business-as-usual operations are not negatively impacted by long-term objectives.

Google, for example, is known for its “20% rule,” which allows employees to spend up to 20% of their time at work on projects unrelated to their primary job. This stimulates innovation and the conception of new products and services. Amazon, on the other hand, applies ambidextrous leadership through continuous innovation in logistics and customer service while expanding its capabilities in new areas such as cloud computing and artificial intelligence. Their ability to integrate seemingly conflicting operational and innovative factors gives them a considerable competitive advantage.

Microsoft is another excellent example. Over the years, the company has managed to transform itself from a traditional software company into a leading player in cloud computing and AI. This was possible by leveraging Microsoft’s existing strengths in enterprise software while aggressively pursuing new opportunities in relevant emerging fields and, as a result, remaining relevant in a highly competitive industry.

B. In the manufacturing sector: in this industry, companies like General Electric and Toyota both use ambidextrous leadership to improve operational efficiency and simultaneously develop new technologies. Toyota, for example, uses lean manufacturing methods to optimize its production processes while, on the other hand, investing in research and development of new products, such as hybrid and electric vehicles.

General Electric has been implementing ambidextrous leadership through its “fastworks” strategy, which combines lean principles, typical of a startup business model with innovative methods to accelerate the development of new products and services. This strategy allows the company to remain competitive by adapting to market changes and meeting rapidly changing customer preferences. GE’s approach to ambidexterity is also a testament to its ability to balance the exploitation of existing technology and the exploration of new ones, ensuring sustained growth and innovation while preserving its core activities.

C. In the academic sector: in academia, ambidextrous leadership is manifested, for example, in the combination of performing short-term projects while planning and applying for funding within long-term research programs. Universities and research institutions are forced to balance the need to publish research results with a long-term development strategy. For example, the Massachusetts Institute of Technology (MIT) actively supports researchers in developing new ideas and projects while ensuring the fulfilment of day-to-day activities and tasks. At the European Organization for Nuclear Research (CERN), the adoption of an ambidextrous approach is evident in its attempt to create a balanced portfolio of projects that include experiments aimed at immediately expanding knowledge of particle physics as well as long-term projects that entail the development of new international collaborations and technology for future research and commercial applications. This approach enables CERN to continuously push the boundaries of scientific discovery while also contributing to the advancement of technology in other fields.

What are the key skills and competencies of an ambidextrous leader?

Ambidextrous leadership requires leaders and organisations alike to have a set of specific skills and competencies that can enable them to effectively manage an organisation in today’s post- VUCA (volatility, uncertainty, complexity and ambiguity), polycrisis conditions. Ambidextrous leaders and organisations should be:

1. Flexible and adaptable: leaders must be prepared to embrace any type of change and be able to quickly adapt their organisational operations in response to new business conditions like, for example market changes, technological advancements, or new regulatory requirements. They are often required to navigate between different tasks and approaches, depending on the changing needs of their business. As a result, they need to be confident decision makers, good risk managers and communicators to identify and leverage new opportunities while mitigating potential threats. Being flexible also means encouraging both positive and negative feedback from those around us as a learning opportunity. In a dynamic environment, leaders must continuously question and reassess their strategies and decisions, in order to develop the agility necessary to pivot, if needed. This iterative approach allows them to stay ahead of the curve and respond proactively to emerging trends and challenges.

2. Innovative in their thinking: the ability to think outside the box and seek new solutions increasingly becomes an essential skill for leaders who want to adopt ambidextrous leadership successfully. Leaders must be able to ‘connect the dots’ and then see opportunities when others only see problems. Leaders should foster a culture of creativity and innovation by encouraging employees to propose new ideas and solutions that can contribute to the long-term growth and competitiveness of the company. This includes creating an environment where individuals feel comfortable to share their ideas, even if they may not work.
Innovative thinking also involves being curious and constantly acquiring new knowledge, even if it means ‘unlearning’ what we already know. Leaders should develop a deep understanding of the environment in which they operate in by keeping informed on industry trends, technological advancements, and changes in consumer behaviour to identify potential opportunities for innovation. This place them in a good position to anticipate market shifts and position their organisations accordingly.

3. Equipped with meta-competencies: it is important to develop not only technical professional skills but also soft, interpersonal skills, such as emotional intelligence, creativity, and the ability to collaborate, at both individual and organisation level. These skills help leaders to better understand their employees, build trustful relationships with multiple stakeholders, and effectively manage a team in changing conditions.
Ambidextrous leaders should be equally skilled at managing processes and projects as well as people’s emotions and expectations. The ability to understand the needs and motivations of others helps create more collaborative, engaged and motivated teams who tend to perform better when working towards common goals.
So called meta-competencies also include the ability to communicate effectively with all types of stakeholders, both within and outside the organization. Leaders must be able to articulate their vision, inspire others, and build consensus around shared objectives. This requires strong communication skills and the ability to adapt their message to different audiences.

4. Risk conscious: leaders must be able to assess risks and make decisions that minimise potential negative consequences. This is especially important in conditions of ambidextrous leadership, where it is necessary to balance stability and innovation. The latter often brings about great new opportunities but also many challenges, so leaders should be prepared to take calculated risks based on limited amount of information. This includes understanding when and how to invest in new technology or working methods, as well as when it is time to pull back from a project to avoid further losses.
Effective risk management also involves developing contingency plans and being prepared for unforeseen events. Leaders should build resilience into their organisations and teams by diversifying their portfolios, investing in robust systems and processes, and fostering a culture of agility and adaptability.

The ambidextrous approach as an enabler of competitive advantage

It is increasingly apparent that fostering a dual mindset such as the one encouraged by the ambidextrous leadership model can be seen as the most effective approach to face the current complex and dynamic business challenges. Ambidextrous leadership will arguably play an increasingly important role in managing organisations in the future. In conditions of constant change and increasing uncertainty levels, leaders who can effectively combine different approaches and strategies will be in demand across all industries.
However, it is important to understand that future success does not merely depend on the adoption of ambidextrous leadership but also on the ability to adapt it to specific market, industry and organisational conditions. Moreover, ambidextrous leadership contributes to the development of innovation and the adoption of a resilient mindset. Companies and leaders who can quickly respond to change and find new ways of growing and evolving will have a significant competitive advantage.

In addition, the rise of new technology like AI and the increasing importance of data-driven decision-making further highlight the need for the adoption of ambidextrous leadership. Organisations must be able to leverage data, information and technology to drive innovation and optimise operations. Leaders who can balance the exploitation of existing data assets with the exploration of new technological opportunities will be better positioned for success within their specific industry.
As a result, organisations and leaders should encourage a new mindset based on continuous learning, high levels of flexibility and critical thinking. In a rapidly changing world, the ability to be flexible, innovative, and manage risk will become even more important. Furthermore, the growing importance of global issues like sustainability and social responsibility in business adds another layer to the adoption of an ambidextrous approach. Future leaders should shift their focus away from the traditional perspective based on financial results and towards the so-called triple bottom line, a well-known framework that looks at organizational performance across three different lenses: social, environmental and economical. This requires a holistic approach that balances a wider range of different requirements to create long-term value for all stakeholders.

Conclusion

ambidextrous leadership is a powerful tool for organisations and leaders who operate in highly uncertain, continuously changing business scenarios. It requires the acquisition and continuous development of a set of unique skills as well as the right mindset that allows them to comfortably switch between different strategic approaches. In our rapidly changing world, the ability to be flexible and innovative, as well as the confidence to manage risk and make timely decision will become critical factors to determine both a company’s and a leader’s long-term success. By embracing ambidextrous leadership, organisations can develop the strategy and mindset needed to be at the forefront of their sector and lead the way into the future, whatever shape it may take.