Exploit/Explore

To move forward, companies need to be able to both Exploit what is and Explore what is not yet. Our book Boardroom Creativity describes why the ideal balance is shifting; businesses need to spend more time on exploration because the average life cycle of companies is getting shorter which requires more focus on innovation. However, the need to shift from a more ‘executive’ approach to an ‘entrepreneurial’ approach is not true for every organization. We also know entrepreneurial companies that are very good at spotting opportunities and coming up with creative new ideas but lack the executive power to make the most of those ideas. These companies would benefit from more Exploit in their Exploit/Explore balance.

What is the right Exploit/Explore balance for your company? It depends both on how fast your business environment and customer needs are changing, and on your strategic ambitions. Do you want to be an innovator, or is your strategy to be a follower for example? Is your growth strategy based on M&A or organic growth? Once you have determined the Exploit/Explore balance your business needs, you can identify the leadership shifts that are needed to realize this. You may need to add new people to the team or help your current team develop different mindsets and behaviors. Being creative yourself doesn’t always mean that you know how to stimulate other people’s creativity, and being entrepreneurial does not always equal being innovative when proper processes and feedback loops are missing. 

Have you defined the desired exploit/explore balance for your business? Do the mindsets and behaviors of your leadership team reflect this?