Growth oriented entrepreneurs, ambidexterity, and tensions management in small

Entrepreneurs at growth companies are optimistic about growing the business, and new business opportunities are seen as interesting, personal challenges. Growth enables opportunity to learn, create something new, and achieve profitable, fast-growing business.

Creating something new is exciting, but also risky and uncertain, and pushes the boundaries far away from the comfort zone. At the same time, entrepreneurs understand the need to improve current business to be competitive and to be able to explore new opportunities. These two stories represent two different situations and at the same time illustrate how entrepreneurs in growth-oriented SMEs think while growing their businesses.

4.3.1 Growth-oriented Ulla with a can-do attitude

Ulla is a very growth-oriented person who does not seem to see obstacles while growing her business. She is a risk taker, and uncertain profits are more interesting than certain profits if the uncertain profit is higher. In other words, she is a hungry entrepreneur who does not avoid risks if there is reward. Ulla seems to have a passion and personal interest in exploring new opportunities, but at the same time, she underlines the importance of exploitation activities and steady cashflow. As a growth-oriented entrepreneur, she simultaneously ensures that the company is not slipping from the competition and focuses on current business while exploring new opportunities. As a quickly growing enterprise, her company is changing rapidly and constantly. Even though the structures have changed and new persons have joined the company, the personnel policy helps the company to overcome possible challenges related to the change needed. As the firm grows, new talents bring in new knowledge to the firm, helping the company succeed. Ulla understands the need for external knowledge by networking and learning from others. By maintaining a curious and psychologically safe working environment, Ulla is able to get employees to give their input without fear. Experience and structures inside the organization have to evolve all the time to maintain their competitive edge. To manage tensions while exploiting current capabilities and exploring new opportunities in a growing organization, seamless cooperation, open discussion, a safe environment, and communication are required. To succeed, a proper amount of human

resources and money is needed.

4.3.2 Reijo has to first win the trust of his employees

Reijo has started as an entrepreneur, and he needs to take control of the firm before he is able to efficiently execute exploitation and exploration activities. The focus on his activities is personnel management and finding a way to get employees involved with exploitation and exploration tasks. The employees have been in the company for a longer time than Reijo and have learned certain ways of doing things from the previous owner. Reijo has an ambidextrous and growth-oriented mindset, but to successfully implement these attributes in the company, he has to win the employees behind him. Previous entrepreneurs have not focused on ambidexterity, and when a new entrepreneur joins the company, there is a barrier to overcome. It seems that the previous entrepreneur has not kept the eye on competition.

Some of the products seems to be outdated and the ideas from employees has not been realized. Even if the entrepreneur is ambidextrous, the company cannot achieve ambidexterity if the employees are not behind that objective. Reijo has identified some suitable people that could take more responsibility in terms of exploring new opportunities, and he is focusing on exploitation and coordinating activities related to improving exploitation in the company. The employees have worked mainly for the company during their career; thus, there is a need to gain more knowledge to efficiently achieve ambidexterity. Reijo stresses the importance of entrepreneurs in achieving ambidexterity. If the entrepreneur is not growth oriented, it is hard to achieve ambidexterity. Based on the story, it is also inevitable to get employees committed to exploitation and exploration activities to achieve ambidexterity, and in his case, there is plenty to do on both ends. On the exploitation side, there is a need to refine the offering, knowledge base, ERP system, and how tasks are organized inside the company. On the exploration end, Reijo needs to get his people to be more passionate about exploring new opportunities and innovate open-mindedly. Reijo has been actively managing tensions since he came to the firm. In this short period, he needs to continue focusing on tension management and improve communication if he wants an ambidextrous team.

4.3.3 Chasing ambidexterity and managing tensions at different circumstances

The difference between the two stories is in resources and contexts. Ulla has more resources to explore new opportunities, while Reijo has limited resources and internal conflicts within

the company that need his attention. Ulla has been able to create a personnel policy and carefully choose suitable persons for the team, whereas Reijo has inherited an unfavorable atmosphere and employees from the previous entrepreneurs. In both stories, to achieve ambidexterity, there is a need to adjust employees’ mindsets. Communication and company culture are ways to lower the barrier. However, while moving to the new business areas, it is important to find out if the company has the necessary capabilities. Exploiting current capabilities seems to be more certain, and in an uncertain situation, Reijo prefers exploiting current capabilities rather than heavily moving toward exploration. At both companies, exploitation is seen as important, as it is a cashflow generator and basis for company growth.

Entrepreneurs are on the frontline with tensions related to ambidexterity. Depending on the situation, tensions arise from employees, customers, or other parties. Based on both stories, it is necessary that the entrepreneur is capable of managing tensions while balancing ambidexterity.

In both stories, the entrepreneurs do not have an exact plan to balance different tasks or activities, but they tend to react to themes that need attention at a certain time. Projects related to exploration and exploitation are run simultaneously in both stories, and the balance between projects varies over time. The entrepreneurs play a key role in controlling the firm’s resources for exploitation and exploration activities. The entrepreneurs seem to connect with the networks, and they use internal and external knowledge to make decisions related to balancing ambidexterity. However, it seems that the employees, networks, or advisors do not have a crucial role in the four selected case companies.

Focusing on exploration and exploitation at the same time at growth-oriented SMEs leads to tensions. Tensions, as specified by Andriopoulos and Lewis (2009), are related to the fit of the strategic intent, while the entrepreneur has to think about how to form the company to successfully balance ambidexterity. Should they have separate resources for exploitation and exploration, or should they use the same resources to chase both exploitation and exploration (Gibson & Birkinshaw, 2004). In both cases, it seems that due to scarce resources, there are no separate resources allocated for different tasks, and this seems to raise tensions. Second, entrepreneurs are required to think about how widely they apply ambidexterity in their organization. Should ambidexterity be chased at the organizational level or the individual level? In both stories, there is no clear plan or vision for how ambidexterity can be achieved,

and there are no structures on framework available for organizational or individual level approach, which causes tensions. Third, chasing ambidexterity seems to be very dynamic at both companies, and therefore the tensions are popping out constantly while the entrepreneurs move back and forth between exploitation and exploration tasks. Tensions are also related to the nature of SMEs; scarce resources intensify tensions. From the managerial perspective, employees do not share the same vision with the entrepreneur, which also intensifies tensions. Tensions are managed in different ways, mainly through discussions with employees. Involvement of employees can be seen as a way of handling tensions in the cases, along with corporate culture, employment strategy and management style.

In both stories, different forms of paradoxes (Schad et al., 2016) can be identified as well.

Learning paradoxes are present while entrepreneurs renew their way of doing things.

Organizing paradoxes are present when there are competing processes between old and new, as employees have routines for certain tasks and have to focus on new ways of doing things.

Performing paradoxes are present when the entrepreneurs and employees have to evaluate their business context and how these businesses are performing.

Although both stories differ from each other, they share some similarities. Both entrepreneurs present ambidextrous mindsets and are executing exploitation and exploration activities based on their resources. The scarce resources are intensifying the tensions in both stories and in some terms, are limiting opportunities in one of the stories. Both entrepreneurs have a practical approach to tension management and rely heavily on communication and shared vision through involvement (Table 5).

Table 5: Compilation of the stories and research results Be a hero, grow passionately (story #1)

Tough times do not last, tough teams do (story #2)

Ambidexterity level Company, both exploration and exploitation

Individual, focusing on exploitation

Are exploitation and exploration sequential or simultaneous?

Sequential Focusing mainly on

exploitation

Tensions identified Strategic intent, customer orientation, personal drivers

Collective and individual Collective, but mainly individual