A Stitch in Time Saves Nine: Building an Ambidextrous Organization in Financial Services

The financial services industry is among the few industries that lack research and development departments in large parts. This is among the reasons why insurance companies have had and still have a difficult time being innovative. Historically, the industry is struggling with change and innovations. What had been called “innova-tion” in the past usually had been an actuary’s idea of a new product that was built and pushed into the market. Today, innovations can be created inside and outside the focal organization. Both options come with advantages and disadvantages. Un-fortunately, there is no “one size fits all” approach to building exploratory activities. Therefore, each organization has to identify and implement individual solutions. While it is common to create innovations inside an organization in other industries, it is rather unusual in the insurance industry. Being innovative in an insurance envi-ronment is challenging, especially if one is surrounded by “business as usual”’ ac-tivities and duties. How to manage “business as usual” while, at the same time, creating innovations is one of the main challenges insurance companies currently face. Exploiting and ex-ploring at the same time is referred to as “organizational ambidexterity,” which is de-fined as “the capacity to simultaneously achieve alignment and adaptability at a business-unit level” (Gibson & Birkinshaw, 2004). This can be done by balancing exploitation (alignment) and exploration (adaptability) to excel at today’s core busi-ness while also focusing on tomorrow’s upcoming challenges (Duncan, 1976).