Adapt or Die: Adaptability Quotient (AQ)

Whether a startup has the potential to become a success very much depends on its founder(s). To assess the leadership of a startup most investors tend to assess their IQ (intellectual intelligence) while others prefer to test their EQ (emotional intelligence).

Natalie Fratto, VP Firmwide Strategy at Goldman Sachs, suggests a third option: testing one’s ability to adapt to rapidly changing circumstances, i.e., one’s Adaptability Quotient (AQ). While I’m not convinced AQ should always be regarded as the ‘single most important determinant’, as stated by Fratto, I’m willing to believe that one’s potential to adapt could be an important foreteller of one’s potential for success. And this applies not just for startups. An AQ strategy would allow us to measure, test and improve the adaptability potential of teams, organizations, and even governments.

In her TED talk, Natalie mentions three tricks to assess one’s AQ:

  • What-if Questions – “What would you do if a competitor offers a similar product half your cost price?”
  • Signs of Unlearning – Seek to learn what people presume they already know and are willing to override with new information, i.e., return to a zero mindset.
  • Infuse Exploration – Focusing on further exploiting existing product-market fits makes you blind for what’s around the corner. Previous success becomes the enemy of one’s adaptability potential.

Adapt or Die

According to Nathalie, we all have the ability to learn to adapt to change. However, not everyone seems to be willing to leave behind the comfort of business-as-usual. Afterall, history teaches us that (large) companies have a tendency to ignore change (Kodak, Blockbuster, etc.)

Zero-based Thinking

Unlearning, as mentioned by Fratto, has similarities with zero-based thinking. Zero-based Thinking asks: “Knowing what you know now, what would you do differently, start, or eliminate in your life (or business)?” This principal comes from Brian Tracy, CEO of Brian Tracy International. Ask this question to help address your issues about business strategy, employees, new business ventures, existing relationships, and existing customer groups.

Albert Einstein was teaching at Princeton University and had just administered an exam to an advanced class of physics students. On the way back to his office, the teaching assistant carrying the exams asked him, “Dr. Einstein, wasn’t this the same exam you gave to this same class last year?”Dr. Einstein responded, “Yes, it was.” The teaching assistant then asked, “But Dr. Einstein, how could you give the same exam to the same class two years in a row?” Einstein replied, “The answers have changed.”

The zero-based organization lets companies design the organization from a clean sheet, shifting talent toward work that contributes to the distinctive capabilities, operating model, and outcomes needed to fuel growth. It challenges a company’s strategic ambition, choices, and distinctive capabilities without the biases of the past.

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