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Ambidextrous organization

Ambidextrous organization. Introduction. Guru Nagarajan New Business Inv., Intel Corporation Global MBA (09) Kenan-Flagler Business School, UNC Chapel Hill MS (Comp Sci) University of Michigan. The Dare. “I am a professor of strategy and oftentimes I am ashamed

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Ambidextrous organization

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  1. Ambidextrous organization

  2. Introduction • Guru Nagarajan • New Business Inv., Intel Corporation • Global MBA (09) • Kenan-Flagler Business School, UNC Chapel Hill • MS (Comp Sci) • University of Michigan

  3. The Dare... “I am a professor of strategy and oftentimes I am ashamed to admit it, because there is a dirty secret: We know a great strategy when we see one. In business schools we teach them and pin them to the wall. They are specimens. Most of our smart students raise their hands and say, ‘wait a minute. Was that luck or foresight?’ They’re partly right. We don’t have theory of strategy creation. There is no foundation beneath the multibillion- dollar strategy industry. Strategy is lucky foresight. It comes from a serendipitous cocktail” Gary Hamel

  4. General Mgmt Strategy Model ENVIRONMENT ARCHITECTURE PERFORMANCE STRATEGY COMPETENCE

  5. STRATEGY COMPETENCY ENVIRONMENT Niche Cost Differentiated Industry Structure Hyper-competition Value Chain Skills linked with strat Effectiveness Efficiency Adaptability Emerging Growth Profit taking Endgame Turnaround ARCHITECTURE Structure Systems for planning Systems for rewards

  6. Hyper-competition

  7. Strategic Positions/Shifts ??? price ??? Timing may be a choice! functionality

  8. Paths to Adaptability ARCHITECTURE INTENT??? COMPETENCIES

  9. The Corporate Hierarchy corporate business functional

  10. Corporate Level Strategy corporate Sbu1: Aircraft Sbu2: Air Conditioners Sbu3: Elevators

  11. “SBU” Speak • Based on products (so we look like other products) • Based on competition for corporate resources (so we don’t cooperate) • Based on relative rankings (so we practice to deceive) • Based on current competitive advantage (so we don’t invest to build advantage)

  12. Executive and Middle Manager Component SELECT, NOURISH THE RESOURCES Tacit Robust Embedded Consensus LINK THE RESOURCES

  13. Competitive Adv: Based on share of end product Looks at advantage as a unit level resource Looks backward more than forward presumes boundaries are fixed Competence: Based on share of core product Looks at competence as a corporate level resource looks forward presumes boundaries change Differences Between Competitive Advantage and Core Competence

  14. Adjudging a Core Competence • Leveraged across products • Makes a significant contribution to perceived customer benefits • Rare • Inimitable

  15. The language of core competence • Value migration • Co-evolution • White space opportunity • Strategic intent • Options taking • Strategy is “subversive”

  16. Are you sure you have a strategy?

  17. “Diamond” in other words • Is the option inimitable? • Is it valuable or rare? • Is it durable? • Have we worked the diamond?

  18. Path to Strategic Success Is it a matter of the CONTENT of strategy? Is it a matter of the FORMULATION of strategy? Is it a matter of the IMPLEMENTATION of strategy? YES!!!

  19. Recap • As strategy evolves, so should structure and systems and style and staff and …. • The rate of evolution is not equal across all S’s • The choice between evolution and revolution is a difficult one • The impetus comes from the environment • Most of the time, the early signals are ambiguous • Most of the time, signals perceived late can only be responded to by revolution • Planning may help with effective response

  20. Ambidextrous Organization

  21. Re: Ivester at Coke “An accountant by training, Ivester knew the math, but not the music required to run the world’s leading marketing organization” WSJ, 12/21/99

  22. Why folks don’t get “the music” • Confusing experience with facts • Discomfort with ambiguity • Casual use of language • Muddled thinking • Well, something akin to functional fanaticism

  23. Causes of Functional Fanaticism • Over-emphasis on “local” incentives • Myopic thinking • Lack of links across units • Lack of attention to organizations as integrated wholes • Lack of ‘strategic’ or ‘general management’ view • Lack of conceptual tools/insights

  24. Decouple “New Opportunities” • How do you get over Functional Fanaticism? • Let the Left hand do stuff without the Right hand • Provide autonomy • To explore and create new opportunities • To seek resources without shackles

  25. Serendipitous cocktail How does the serendipitous cocktail get cooked by the left hand? - Explore “New” architectures/products - Set the bar low where “Assumptions/$$” is high - Set the bar high where ““Assumptions/$$” is low

  26. Questions

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