Facilitating Ambidexteriy in Product Development with Information Technology

Knowledge is an intangible strategic resource able to create value and achieve superior performance. Product development is inherently a knowledge-based activity that creates new knowledge or recombines existing knowledge, thus developing new products and a competitive advantage to the firm.

Developing highly successful products involves a tension between the old and the new -a struggle between the comfort of past needs and the uncertainty of future needs. This tension is also known as the need to reconcile exploitation and exploration   As a result, product development demands firms to exploit their current competences while exploring new ones with equal dexterity. This balancing act is embedded in the concept of ambidexterity: the ability to pursue both exploration and exploitation simultaneously.

The latest researches focus on how firms can achieve ambidexterity, and this attention has contributed to the refinement and extension of the ambidexterity concept and the suggestion that there are multiple ways of achieving ambidexterity. Currently, IT is considered an alternative path to ambidexterity. Theories of information systems hold that IT within organizations can, on the one hand, serve to “automate” organizational tasks such as the transaction, storing and processing of data and information. This automation focuses on efficiency. On the other hand, IT can serve to “informate;” provide information to support organizational decision making and the exchange of ideas.

Massive IT is often designed with overemphasis on exploiting knowledge, while neglecting exploration. In this regard, IT causes – more than heals – some of the problems of organizations. Consequently, effective IT infrastructure demands a combination of two related dimensions: the convergent dimension and the divergent dimension.

The “convergent dimension” connects people to people by enhancing analysis and discourse, and supporting a virtual network that is not constrained by barriers of time and place. It improves coordination and communication between members of the product development team by transferring even tacit knowledge (that which is difficult to express and communicate to other people because it cannot be codified and articulated) from those who posses it to those who need or can use it. The aim is to facilitate group and teamwork regardless of time and geographic location. This offers product development members the opportunity to interact and exchange views and thoughts with each other and serves as a way to handle tacit knowledge.

The divergent dimension concerns the quality and quantity of the information and explicit knowledge (that which is can be expressed in symbols, communicated through these symbols to other people, and then put to use) that an organization can access, facilitating their indexing, mapping, and retrieval to all members of product development. This dimension plays the role of connects people to explicit knowledge through structured content like manuals, reports, articles, best practices, customer inquiries and needs, competitor analysis, and experience with production. A content classification scheme or taxonomy is used to organize knowledge and to facilitate grouping, sorting visualization, searching, publication, manipulation, refinement, and navigation.

In practice, different IT configurations emerge when various divergent and convergent dimensions are emphasized. Some product developments tend to emphasize one dimension over another, while others are able to manage the correct balance between both dimensions, or even adjust them in accordance with knowledge characteristics or environmental conditions.

The fact that product development may have different IT configurations is not particularly compelling. The real interest lies in highlighting whether the different IT configurations may significantly and differentially affect knowledge capabilities in product development. This idea is consistent to the resource-based view, which suggests that performance differences in product development result from variances in the availability and use of specific resources. It is thus possible to assume that differences in IT configurations, on the basis of its convergent and divergent dimensions, may have implications on what can be expected in terms of knowledge exploration and exploitation.

This general hypothesis was empirically tested through the analysis of 80 product developments. Results indicate that achieving ambidexterity in product development through IT is possible and positively relates to both convergent and divergent IT dimensions. Furthermore, it is shown that when this supportive IT creates the capacity for ambidexterity, performance gains are realized.  In order to support exploitation in product development, knowledge distributed across different departments or organizational units needs to be retrieved and combined. This may not necessarily imply connecting people but, since knowledge is complex in nature, convergent IT may give support to divergent IT providing “flexibility.” In other words, balanced combinations of convergent and divergent IT support the elimination of structural and temporal barriers so that distributed participants in product development may collaborate and coordinate their work in an interactive way. This combination also supports knowledge location, within and outside the organization, so that available knowledge can be mapped in an internal knowledge base.

All of this suggests that today organizations and managers confront an increasingly contradictory word. The traditional unitary approaches that emphasize extreme behaviours are inappropriate. Organizations should recognize and accept ambidexterity in product development practice and put their time and effort into sustaining it rather than avoiding it. Moreover, managers must overcome the contradictory pressures of exploration and exploitation in product development by managing contradictory dimensions of IT. Combinations of exploration and exploitation occur then in alignment with combinations of convergent and divergent IT to generate a powerful mechanism for competitive advantage.

In conclusion, given that product development determines a firm’s profits, growth, market share, and other key metrics, ambidexterity is an important and desirable capability that product development managers can develop and which can be shaped, at least partially, through IT.

Elena Revilla is Professor of Operations Management at IE Business School

[This research paper has been reproduced with permission of the authors, professors of IE Business School, Spain http://www.ie.edu/]