Lead and Disrupt

In the past few years, a number of well-known firms have failed; think of Blockbuster, Kodak, or RadioShack. When we read about their demise, it often seems inevitable-a natural part of "creative destruction." But closer examination reveals a disturbing truth: Companies large and small are shuttering more quickly than ever. What does it take to buck this trend?

The simple answer is: ambidexterity. Firms must remain competitive in their core markets, while also winning in new domains. Innovation guru Clayton M. Christensen has been pessimistic about whether established companies can prevail in the face of disruption, but Charles A. O'Reilly III and Michael L. Tushman know they can! The authors explain how shrewd organizations have used an ambidextrous approach to solve their own innovator's dilemma. They contrast these luminaries with companies which-often trapped by their own successes-have been unable to adapt and grow.

Drawing on a vast research program and over a decade of helping companies to innovate, the authors present a set of practices to guide firms as they adopt ambidexterity. Top-down and bottom-up leaders are key to this process-a fact too often overlooked in the heated debate about innovation. But not in this case. Readers will come away with a new understanding of how to improve their existing businesses through efficiency, control, and incremental change, while also seizing new markets where flexibility, autonomy, and experimentation rule the day.

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Charles A. O'Reilly III and Michael L. Tushman

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Contents and Abstracts1Today's Innovation Puzzle chapter abstractIn the past few years we've seen a number of well-known firms fail or go bankrupt (e.g., Blockbuster, Kodak) and more failures are on the horizon (e.g., Sears). This book describes what it takes for leaders to succeed in the face of accelerating change. It describes how some leaders and their organizations have been able to compete successfully in mature technologies and markets and transform their organizations by exploring in new domains (e.g., Amazon, IBM) while others have been trapped by their own success. Although this perspective is based on a substantial body of empirical research, the material described here is highly applied and moves well beyond the typical exhortations offered in most books on leadership and change. 2Explore and Exploit chapter abstract This chapter offers two simple frameworks (the congruence model and the success syndrome) that illustrate the power of organizational alignment in driving organizational performance. It also describes how the alignment needed for success in a mature business can make it difficult to succeed in the face of change and why successful organizations, faced with disruptive change, sometimes fail. We illustrate this dynamic with a story of organizational success (Amazon) and organizational failure (SAP). 3Achieving Balance with Innovation Streams chapter abstract Why do successful organizations fail? This chapter uses rich descriptions of two old companies (Sears and the Ball Corporation) to show how some leaders are able to help their organizations evolve and adapt to disruptive innovation. We elaborate on the innovation streams framework introduced in chapter 1 to show how different types of change can require leaders to manage different types of alignments 4Six Innovation Stories chapter abstract Using the frameworks developed in the first three chapters, here we provide a set of detailed examples for how ambidexterity can operate. We describe how the leaders of six different organizations (e.g., a newspaper, a manufacturing company, a high tech firm, etc.) were able to meet the challenge of disruptive change. Based on these insights we identify three essential elements necessary for leaders to design ambidextrous organizations, 5Getting It Right Versus Almost Right chapter abstract Here we expand on the insights from Chapter 4 and describe in detail a process that IBM uses to generate organic growth-the Emerging Business Opportunity (EBO) process-which enabled them to increase revenues by more than $15 billion during the period of 2000-2006. We also show how Cisco attempted and failed at a similar effort. 6What It Takes to Become Ambidextrous chapter abstract In this chapter we identify four major elements associated with more versus less successful efforts at ambidexterity. These are practical guidelines that can be used to help managers think about how to apply these lessons in their own contexts. We focus here on the question of what needs to be done to design an ambidextrous organization. What are the elements that leaders need to consider when implementing ambidexterity? What are the cardinal sins to be avoided? 7Leaders (and Their Teams) as Linchpins chapter abstract Whereas the previous chapter focused on what needs to be done to implement an ambidextrous design, this chapter focuses on how leaders can do this. We provide examples of two leadership failures and three successes and, drawing on previous examples, conclude by suggesting five leadership principles that undergird the successful implementation of ambidexterity. 8Leading Change and Strategic Renewal chapter abstract In this chapter we first provide some guidelines for managers to consider in determining whether ambidexterity is needed for organizational renewal. We then describe how the leaders of two organizations (IBM and Haier) successfully led organizational change and renewal that transformed their companies. Based on these, we conclude with six suggestions for leaders to consider when leading organizational renewal