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The hierarchical structures and organizational processes that have been used for decades to run businesses are no longer up to the challenges we face in a world of accelerated change \u2013 John Kotter<\/p>\n<\/blockquote>\n

Although it is true that hierarchies based on a chain of command are the natural order in most companies, and that hierarchical structure is still necessary for an organization to function, it is no less true that it is increasingly evident, in the face of a reality as complex and uncertain as the current one, that our organizations are paralyzed by hierarchy. the organizational chart and the division of functions.<\/p>\n

Change initiatives end up again and again in a small number of trusted people who lead the key initiatives, communication across silos does not happen fast enough or effectively enough, and policies, rules, procedures become insurmountable barriers to the strategic speed that is needed in the new context.<\/p>\n

Part of the problem is political, managers are reluctant to take risks without the permission of their superiors and are reluctant to change because they fear loss of power or their position in the organizational chart. Part of the problem is cultural, people cling to their habits and ways of doing things that worked in the past and skills that are slowly becoming irrelevant in a digital and connected world. But, without a doubt, the most worrying part of the problem is the strategic one, since the challenges we face are exponential and disruptive, and the default hierarchies tend to incremental solutions, overweight the past over the future, and keep doing what they have already done for a long time, and know how to do it.<\/p>\n

To face the new challenges, organizations must seek a new balance between hierarchy as a guarantor of predictability and control, and netarchy as an engine of innovation and growth. We therefore have to face up to the need for new organisational structures and the fact that the new management imperatives are not achievable only with the hierarchical, highly centralised and bureaucratic structures we have built up so far.<\/p>\n

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Dual Organizations: Innovation and Results<\/h3>\n

Organizational architecture is a means to an end, which is ultimately to be able to interact in the new context to learn, adapt, and stay competitive despite the instability and uncertainty of the environment. Hence, organizations in the future must show a dual capability, which allows them to combine operational results with greater operational resilience in the face of the uncertainty and volatility of digital markets.<\/p>\n

To meet the new challenges, a new organizational design is needed that has not one, but two structures. A structure focused on achieving the day-to-day results of business and a second complementary structure, operating as an agile network, focused on the new opportunities and demands of the future. Organizational duality thus provides a promising new approach to continuous and discontinuous innovation within the same organization, by using hierarchy for the exploitation of existing resources and redarchy for the exploration of new emerging opportunities.<\/p>\n

Exploitation and exploration<\/h3>\n

Just as the Roman god Janus had two sets of eyes \u2013 one pair focused on what lay behind, the other on what lay ahead, dual organizations have the dual ability to exploit old certainties and explore new realities. The structural separation of exploration and exploitation is crucial for established companies to be able to address disruptive innovation, i.e. to create new practices and novel business models that allow them to take advantage of the enormous possibilities of new exponential technologies.<\/p>\n

Exploitation-oriented initiatives are related to the operation of the core business through the execution and continuous improvement of current business processes or technological capabilities. It includes product, service or process innovation, portfolio expansion, innovation of existing channels and operations.<\/p>\n

Exploration-oriented initiatives are related to the development of future businesses by pursuing new and often disruptive business models or new technological capabilities. It includes: The development of new business models, new approaches to customers, platform innovation, and transformation projects that require new skills and the development of new digital competencies.<\/p>\n

Principles of Dual Organization<\/h3>\n

One organization, two structures. A structure focused on achieving the day-to-day results of business and a second complementary structure, operating as an agile network, focused on the new opportunities and demands of the future.<\/p>\n