Two engines, one business
As the present and the future are increasingly becoming co-mingled realities, the next generation of successful companies are focusing on running two business engines or ambidexterity which refers to an organization’s ability to manage its business of today while developing its business of tomorrow.
As future gets faster, more complex, uncertain and disrupting we start planning for the future, we scan horizons, analyze weak and strong signals, driver, etc. and select a preferred future from which today’s decisions are made and actions taken but the question that remains is how does that show up, how do we incorporate the future to the present, if it is ever possible.
The either/or mentality
The prevailing paradigm of short-terminsm and shareholder primacy that has underpinned business for the past 50 years is under review (Bain 2017). Wall Street has always promoted the idea that an organization must choose between being either profitable (short-term) or building value (long-term or future), it is a mentality that is deeply ingrained in our culture, we all live under this assumption and it creates an ambivalence the same way that the present and the future do.
The Two (2) Engines or the Ambidextrous Organization
Bain.com refers to this ability to run today’s business as efficiently as possible as Engine 1 and to create a new business or tomorrow’s engine that reflects new customer needs, new competitors and new economics as Engine 2. At Augmnt, we call this defending and evolving the Core Business Engine (CBE) while developing the Future Business Engine (FBE).
The “Ambidextrous Organization” is an organizational development concept coined by R. Duncan (Duncan, 1976). It indicates an organization’s ability to be aligned and efficient in its management of today’s business demands, as well as being adaptive to changes in the external environment. Ambidexterity is achieved by balancing ‘exploration’ (search, variation, risk-taking, experimentation, flexibility, discovery or innovation) with ‘exploitation’ (refinement, choice, production, efficiency, selection, implementation, and execution) (March, 1991; Tushman & O’Reilly, 2004).
Our own approach to this
Prospective thinking is a powerful approach for dealing with the complexity and uncertainty of the future as we underlined but most of the time it creates an ambivalence which translates into resistance, resistance to engaged in futures thinking for example.
The solution is to develop an inclusive mentality, building two business engines, acquiring ambidexteriy. Our Prospective and Introspective methods are designed to be integrated as it is explained below.
The Core or Center
The “core” is simple, it is the business as we conduct it today and everyday, it is the business-as-usual scenario and is is mainly focused on the short-term activity of getting and serving clients. This red circle represents simplicity and the internalities of an organization, its people, assets, systems, technology and culture.
The Edge or Periphery
An organization’s environment is more complex and so it is represented by the outside ring illustrating the intertwining of the organization’s “externalities”, its futures and their opportunities, threats and imperatives, the uncertainty, disruption and complexities too.
The Two Together
Having resolved the seeming dilemma of choosing beween the present and the future, we see that they don’t collapse as much as they merge. The core activities of an organization “live” inside of the futures. The core is defended and expanded and a preferred future is chosen and developped.
ENGINE 1 represents the Core Business (Programs, Products and Services) of the organization.
It focuses on today’s clients, it defends its core business, it extends and builds on current capabilities. It involves every aspects of the core business model and operations like repeatability, short term adaptability, scalability continuous improvement, risk assessment, etc.
Adapted from Bain & Company.
ENGINE 2 represents the Future Business (Programs, Products and Services) of the organization.
It uses a Foresight creative approach in order to look at all possible futures all the way to select a preferred future. It considers what are the new client needs, actors, or economics. Its implementation involves current and necessary capabilities experimentation (mINITIATIVES) and agility.
Our Introspective method helps organizations define their current business model and capabilities so they can better adapt, defend and improve their Core Business Engine.
Our Prospective method helps organizations define their “preferred” future, business model and required capabilities so they can better build their Future Business Engine.
Subject to errors and/or omissions.
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