Dual Organization Capabilities in Practice: a Case Study and a System Approach

Full dexterity – i.e. firms’ capability to concentrate on the needs of today’s customers and the anticipation of those of tomorrow - requires managing two related balancing act: on the one side, firms have to be excellent in both exploitation and exploration of their capabilities, on the other side, organizations have to be excellent in managing both incremental and radical innovation, i.e. in managing the steady state innovation process, building upon firms’ existing knowledge and capabilities, and the radical innovation, that implies to innovate beyond the organizational normal operating envelope. A number of leading firms today seem to be able to handle full dexterity quite well, revealing good operational and innovation performance over time. At the same time, the bulk of management theory still approaches this problem with a trade-off perspective, implying that these aspects of business are analysed separately. Drawing on system theory and management innovation, this paper tries to understand how firms can evolve a capability of full dexterity. Empirical evidence is based on the Selenia case study.