When my sons were much younger, they loved to play hide and seek with their friends. Even when they caught each other in a specific hiding place, some kids went back to the same hiding place a second and even a third time. I explained if they explored some unknown hiding places, they would have a better chance of success.

Dispersal strategies are essential to the survival of any species. Evolutionary success comes from running many concurrent iterations of a species, the more variations the better the chances of success. In addition, those species must explore a wide variety of environments. When our ancient ancestors migrated from the great plains of Africa, it was not to scratch the itch of adventure. If our ancestors all lived in the same area, they would narrow their chance of survival. A great flood or a volcanic eruption could end an entire species in an instant. By spreading themselves wide, they spread their bets. When our ancestors migrated to other territories, they stood a greater chance of survival. That evolutionary instinct is why we are here today.

In organisations and in life, once we establish a certain way of thinking, it is difficult for us to change how we think. When we achieve success with a proven business model, it is difficult for us to explore a fresh one. When we climb to the top of the ladder, we might discover it is against the wrong wall, but we persist nonetheless. Even when we make the leap to explore alternative possibilities, we still narrow our focus to limit our chances of failure. As an organisational mindset, this has to change. The rate of change is too fast and the forces of change are too strong to tip toe around exploration. We must adapt our mindset and our strategies accordingly. Instead of battening down the hatches when we achieve success and exploiting our cash cow, that is the exact moment we need to explore.

Exploit and Explore

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“Depths of imagination,” by Jennalee Auclair

General Stanley McChrystal was a catalyst for change in the US army. Commenting on a process that cripples so many organisations, McChrystal said, “The world has outpaced us. In the time it took us to move a play from creation to approval, the battlefield for which the plan had been devised would have changed. By the time it had been implemented, the plan – however ingenious in its initial design – was often irrelevant.” If you work in a large, bureaucratic organisation, that line will speak to your very soul. In such organisations, even if you conceive the best idea in the world must go through layers of approval, buy-ins, political inclusions, political exclusions in a snakes and ladders process hoping to get the idea to the finish line. Even when you make it there, you arrive there worn down, mentally bruised and battered, and your strategy is a shadow of the original plan. To make matters worse, by the time you got approval, a more nimble organisation not only executed a better strategy, but has already moved on to the next one.

Organisations were designed for steady-state environments. They excel when situations are steady and predictable. Our business environment, our world, is anything but steady and predictable. Established organisations excel at process and procedures. They are organised for pristine execution, not exploratory search. It is understandable that business leaders are struggling with the rapid changes required to compete in a new world order. They got to their positions of leadership through pristine execution, but pristine execution is only part of the future. Explore mode is the polar opposite mode of what established organisations do, it is fraught with risk, trial and error, learning and iteration. It is an entirely alien modus operandi in most organisations and most changemakers are ostracised, misunderstood and often ousted. The organisation rejects them like a failed organ transplant.

Organisations must exploit their existing resources and explore new ones in parallel, and this is where the difficulty arises. People skilled at exploitation, at executing to a predictable plan often feel threatened by those who are exploring unfamiliar ground. Explorers often condemn executors for holding them back, for being slow and overly safe. Executors can become frustrated by explorers, wondering why they are squandering hard-earned resources and playing by different rules. How do we solve this conundrum? The answer lies with communication and leadership. This week’s guest on the Innovation Show, Alex Osterwalder, says “Innovation needs power”. This means leaders need to add their influence to exploration initiatives. You cannot delegate innovation entirely to your exploration team, they will fail and squander your resources, their energy and perhaps your organisation’s future. Leaders need to manage the message inside the organisation to explorers and exploiters, outside the organisations to stakeholders and shareholders and up the organisation to the board members and owners. Leaders must dedicate an increasingly large proportion of their time to explore initiatives to survive the next disruption.

THANKS FOR READING

If you like this concept of exploit and explore, you will love Alex Osterwalder on this week’s Innovation Show. Alex shares the characteristics of Invincible Companies, those companies who both exploit and explore in parallel. He shares exemplars such as Amazon, Apple, Microsoft, Logitech and Pin An to bring these characteristics of Invincible Companies to life.

Episode 235 of The Innovation Show is The Invincible Company: How to Constantly Reinvent Your Organization with Inspiration From the World’s Best Business Models, with friend of the show, Alex Osterwalder

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