Execution versus Exploration

The concept of dividing a company into execution mode and exploration mode, as advocated by various academic theories such as “ambidextrous organizations” or “dual operating systems,” is not an efficient strategy for competing in the digital age. This idea fails to recognize the realities of most companies.

The premise behind this strategy is that individuals cannot be ambidextrous, so the organization must be. It suggests that companies should have an extremely large execution army focused on pure execution activities and a small exploration team focused on breakthrough innovation. However, this strategy only applies to tech companies whose markets are directly impacted by technological advancements.

Most organizations need to compete in their existing markets while looking for opportunities to expand. Digital transformation is a prime example of this. It involves the digitization of existing products and internal systems, which has been an obvious need for at least 25 years. Companies that focus solely on execution and ignore exploration are likely to fail in this regard.

Exploration involves learning, not debating, and should be a core part of any organization’s strategy. It is necessary to figure out what works, regardless of the department. Making time for exploration is crucial and can be done by simply putting it on the calendar. Defining challenges, brainstorming solutions, and aligning on decisions are the other crucial steps in this process.

Balancing exploration with execution based on the amount of uncertainty is more likely to lead to meeting and exceeding objectives. Pushing for execution without exploring can lead to failure, and exploration increases the efficiency of execution in uncertain situations.

In conclusion, companies should focus on exploring in the core to discover growth opportunities. This involves learning from customers and stakeholders, brainstorming solutions, and aligning on decisions. Companies that fail to balance exploration with execution are likely to fall behind in the digital age.