HONG KONG SAR - Media OutReach - 10 March 2022 - History is littered with the names of once dominant companies that were so focused on their successful core businesses that they failed to embrace innovative new ideas until it was too late. But introducing change can be difficult in modern organisations, as it typically involves dealing with contradictory requirements that generate conflict.

To innovate, companies need to both think "out of the box" in their search for new ideas, while at the same time stay focused on outcomes and maintain efficiency in order to turn their ideas into reality. It is not uncommon for teams charged with coming up with innovative solutions to have to deal with "paradoxical" tensions that limit their ability to execute, such as tight deadlines and limited resources.
Yet new research by a group of researchers, including at The Chinese University of Hong Kong (CUHK), shows that it is the ability to lead teams and individuals despite the very existence of contradictory tensions that could be the key to organisational success in today's rapidly changing business environment.
Consider that America's Eastman Kodak, one of the 20th century's major photography brands, was known around the world for its ubiquitous Kodak film rolls. Yet it was forced to file for bankruptcy protection in 2012 after short-sighted senior managers left it too late to enter digital age markets. Nokia, the Finnish telecommunications company that was once the world's largest mobile phone handset maker, also failed to adapt to innovation, notably the threat to its keypad-based products from touchscreen smartphones following the 2007 launch of Apple's iPhone, and later sold off its struggling handset business.
The devastating effects and continuing global economic uncertainty caused by the COVID-19 pandemic – and the success of businesses that have quickly adapted to the "new normal" – have reinforced the importance of businesses adopting what this group of researchers have called "paradoxical leadership" practices to stay innovative and ensure their competitiveness and survival.
Innovation Sparks Paradoxical Conflict
Kenneth Law, Professor and Chairman of the Department of Management at CUHK Business School and co-author of a timely new study, says paradoxical leadership involves managers recognising the contradicting tensions generated by the competing demands placed on teams and individuals in innovative organisations and adopting a dynamic approach to manage the creative process.
Prof. Law and his two co-researchers, Prof. Melody Jun Zhang of City University of Hong Kong and Prof. Zhang Yan of Peking University, have published their findings in their report, titled Paradoxical Leadership and Innovation in Work Teams: The Multilevel Mediating Role of Ambidexterity and Leader Vision as a Boundary Condition.
It offers useful business insights by looking closely at how such leaders effectively overcome paradoxical tensions at "ambidextrous" organisations – those companies that successfully manage not only innovative exploratory activities, such as discovering, experimenting and searching for alternatives, but also its traditional, exploitative business interests, such as refining, executing and recombining existing knowledge and abilities.
"This new research expands our understanding of how to enhance workplace innovation through leadership practices," Prof. Law says. "We were able to show how paradoxical leadership can promote both team and individual ambidexterity – particularly when the leader is able to communicate a strong and clear vision."
Up to 1,169 staff working in teams at 12 companies in northern China and 312 other team workers at different Western companies – focused mostly in innovative fields, such as the research and development of new products or services in the media, software, information and medical technology industries – took part in the research.
They answered questions in three studies, all carried out at three different times over a six-week period, which saw team members ranked on their innovative ability and team leaders on their paradoxical leadership skills.
To leverage on paradoxical leadership, the research shows that leaders should seek to treat all team members equally in a fair and impartial way, while considering the specific needs of individuals and, if necessary, sometimes make exceptions. The new study shows that paradoxical leadership can help to settle differences that arise while promoting innovative solutions.
Prof. Law says team leaders with a strong understanding of paradoxical leadership are able to grasp two conflicting ideas – such as maintaining control while allowing people the freedom to work independently – and then integrate them into their plans.
Team leaders and middle managers also play an important role in explaining a company's vision and direction to staff, so the way they communicate their ideas can have a significant influence on the effectiveness of their leadership.
The new research shows that the success of paradoxical management depends on leaders being able to communicate a clear forward-looking vision so that team members can understand "the big picture". Companies should help team leaders provide clear ideas to staff, so they do not lose sight of objectives, and fully understand the thinking behind paradoxical leadership.
"Our findings show paradoxical leadership is a driving force in helping both individuals and teams to address the contradictory demands involved in the innovation process," he says. "To achieve sustained success in today's volatile environments, we recommend leaders think paradoxically and act integratively."
Fostering Business Ambidexterity
Prof Law says the new research is valuable to businesses because it offers greater understanding about leadership in teams operating in complex and volatile business environments. It reveals not only what types of leadership behaviour promote innovation through enhancing the ambidexterity of individuals and teams – but also when they do so.
Managers, especially those leading work teams focused on providing new business solutions, should consider adopting paradoxical leadership principles and behaviours to foster greater business ambidexterity and innovation.
He says organisations should provide paradoxical leadership training to team leaders to help them to master a two-sided approach to resolve common paradoxes, such as ensuring flexibility while still enforcing clear work requirements and maintaining personal control of outputs while granting individuals the freedom to work independently without outside influence.
He says the research clearly shows that ambidexterity improves innovation – both among individuals and within teams – and will be of particularly use for companies built on innovative products and services, such as hi-tech enterprises and young start-ups, which may have a particularly strong need for ambidextrous work teams.
"Not all teams can provide high-quality innovative solutions, sometimes because they fail to move forward with their initial ideas, or try to implement things too quickly," Prof. Law says. "But if businesses want to be successful, they need to provide training that helps to encourage teams and individuals to put an equal emphasis on innovative exploratory activities and traditional, exploitative business interests, and nurture paradoxical leadership and ambidexterity within the company."
He says one limitation of the new research is that it asked leaders to rank team innovation across a range of different industries, rather than getting them to measure it objectively. Future research could consider incorporating specific ways to measure team innovation to increase the robustness of the findings.
Further studies could also consider and identify whether – and when – company ambidexterity is beneficial or undesirable for teams and individuals. It will also be worth examining the different forms of ambidexterity that exist in innovative teams, with some members tasked with developing novel ideas, for example, while others will focus on the feasibility and application of these new ideas, he says.
Reference:
Melody Jun Zhang, Yan Zhang and Kenneth S. Law, Paradoxical Leadership and Innovation in Work Teams: The Multilevel Mediating Role of Ambidexterity and Leader Vision as a Boundary Condition (June 16, 2021). Available at Academy of Management Journal: https://doi.org/10.5465/amj.2017.1265
This article was first published in the China Business Knowledge (CBK) website by CUHK Business School: https://bit.ly/3tcoeuo

About CUHK Business School

CUHK Business School comprises two schools – Accountancy and Hotel and Tourism Management – and four departments – Decision Sciences and Managerial Economics, Finance, Management and Marketing. Established in Hong Kong in 1963, it is the first business school to offer BBA, MBA and Executive MBA programmes in the region. Today, CUHK Business School offers 10 undergraduate programmes and 20 graduate programmes including MBA, EMBA, Master, MSc, MPhil and Ph.D. The School currently has more than 4,500 undergraduate and postgraduate students from 20+ countries/regions.
In the Financial Times Executive MBA ranking 2021, CUHK EMBA is ranked 19^th in the world. In FT's 2022 Global MBA Ranking, CUHK MBA is ranked 50^th. CUHK Business School has the largest number of business alumni (40,000+) among universities/business schools in Hong Kong – many of whom are key business leaders.
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