Editor | On 01, Jan 2010Message: 26
Posted by: ElleBelle
Posted on: Thursday, 23rd November 2006
I was reading this article on the site: http://www.triz-journal.com/content/c061025a.asp. It sounds like that's really an ideal sort of company that can do that. Does anyone know if there companies that actually do that in the real world?
Posted by: Michael S Slocum
Posted on: Friday, 24th November 2006
You are correct. It is difficult for an organization to be truly Ambidextrous. However, if an organization is to survive in the current evolving competitive environment, it must possess a unique set of competencies that enable it to both Preserve and Evolve. Dedication to this principle will allow an organization to practice planned obsolescence while still profiting from its' current product portfoliio.
Sterno is a great example of this principle. Sterno produces the ethanol/methanol fuels that are used to heat chaffing dishes for catered meals. Sterno has somewhere around 98% of the market share in this space. The “Sterno” name is used to describe the few competitive products that exist as well (like a copy machine is called a “Xerox” machine). However, Sterno realized that changing regulations concerning the usage of open flames in buildings would soon seriously limit most typical usages of their products. They therefore decided to develop a non-flame product that would make their current line of combustion reactions obsolete. In summary, Sterno was able to focus an effort on the development of a competitive product. They did this successfully using Systematic Innovation and Axiomatic Design. They have commercialized the Sterno Flameless product and can now introduce it to the market at their own pace while simultaneously protecting the remaining profitability from their existing line of products. These are both luxuries they would not have if they allowed someone else to put them out of business.
This is a single example of the Ambidextrous Organization concept in practice. There are many others as well–and the field is growing.
Posted by: Ellebelle
Posted on: Saturday, 25th November 2006
Interesting response–and example. But that's a company with a narrow product line. What about a company like HP. They've got lots of different product lines with different management line structures. Is it possible to impose this type of organizational change over a diversified company like HP? Does it go one line at a time? What if it's not an immediate success in one product line–does that doom system-wide innovation throughout the whole company?
Posted by: Michael S. Slocum
Posted on: Monday, 27th November 2006
Organizations with diverse product portfolios will adapt a diverse approach to Preservation and Evolution. Some products will be mature in their net profitability periods while others have significant profitability ahead of them. The mature products will need to evolve in order to maintain market share and continue to generate profits. Functions and features will need to be added to those products or in some cases, the next generation (S-curve) of that particular concept will need to be initiated. Those products that have significant profitability to come will need to be optimized. Optimizing profit generating products provides the stability and financial resources to fund the development of new products to replace those that are mature. This cycle will repeat ad infinitum.
So you see, the more complex an organizations portfolio, the more complex the application of a systematic innovation protocal becomes. Also, the bias between Preservation and Evolution in an organization will change as the market environment does. Therefore, the organizations need also to be agile and aware of the constantly evolving marketscape.