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The Growing Need for Adaptive Leadership

By Peter Gaarn, Senior Consultant, The Piras Group

(Video Transcript is at the end of this article.)

What is Adaptive Leadership?

Adaptive leadership is the ability to continuously and rapidly recognize, make choices, and adapt to those decisions that you make. It has a lot to do with the capability of focusing and speed.

What has changed and why is Adaptive Leadership important now?

The need for Adaptive Leadership is growing and more urgent due to a number factors, let me just focus on 4 key ones to set some context:

  1. Organizations are still operating for the most part as 1st or 2nd generation social system designs with not much new, while technology is evolving exponentially, and the gap is now growing at a faster rate than ever seen before.
  2. In Thomas Freidman’s recent book entitled “Thank you for being late: an optimist’s guide to thriving in the age of accelerations”, he notes that technology is now significantly outpacing social adaption and the gap is growing exponentially.  The need to accelerate and close the gap between social/organizational adaption and technology is becoming an imperative.
  3. Most leaders tend to manage in an old paradigm of optimizing their organizations performance to meet market pressures for constant quarter results, while trying to innovate in environments that constantly value optimization over innovation.
  4. Lastly, Organizations no longer operate within their own sphere of influence based on their own vision and values, they are all now part of larger eco-systems of partners, customers/consumers, geographic communities, government agencies and influences (i.e., regulatory) that they must collaborate within, in-order to be successful.

The net, net is that while the world is rapidly changing with technology advancements happening at an exponential rate, and the business environment is growing more complex with eco-systems being the new unit of analysis, the social designs of organizations are stuck in a very old paradigm that is still in many ways hierarchical, slow to adapt and unable to keep up with the rate of technological change.

What are the key capabilities of Adaptive Leadership?

In the simplest of definitions, adaptive leadership is the ability to continuously and rapidly recognize, choose and adapt.  Let’s look at each aspect:


  • Adaptive Leaders first need to fully understand the context they are operating in and have the ability to continuously scan their environment to recognize shifts, changes and new emerging patterns. 
  • They must understand and operate within their eco-system and the technology trends that can potentially disrupt their strategies, partnerships and organizational performance. 
  • They must also stay in tune with their customer/consumer needs and ensure that they’re taking an outside in approach vs. an inside out perspective.
  • This scanning capability is no longer a once a year or more activity tied to refreshing strategic plans…it is a continuous process and requires constant attention to trends, forces and competitive moves happening on a daily basis.


  • Based on the constant stream of data, information and trends they are paying attention to the second capability adaptive leaders need are to make choices and decisions regarding strategy, investments, partnership to only name a few, that will help the enterprise and its eco-system partners stay ahead of the market with greater differentiation then it’s competitors
  • This means constantly adjusting current direction and strategy vs. waiting until the current strategic plan has been fully executed on its 1 to 3 year timeframe
  • And it goes beyond just playing defense…it means making choices that are offensive in nature, like being the disruptor in the market place and leading vs. following


  • Finally, and perhaps the most challenging of the three, is the ability of leaders to continuously and appropriately adapt to the external changes.  
  • In order to constantly learn and adapt, an organization must be designed or have the capacity for flexibility and adaptability.  As mentioned earlier, most organizations are still 1st or 2nd generation organizations with a strong reliance on hierarchy & command & control method of operation. 
  • What appears to be emerging is new organizational forms that are capable of 1) operating as flexible/adaptable networks that can easily reconfigure capabilities and resources to address customer needs or changing conditions, and 2) can operate with ambidexterity, which means being able to simultaneously optimize for efficiency & performance and innovate to either lead or stay in the game.
  • Becoming ambidextrous is so much harder than it sounds. Again, organizations today just by their nature are more hierarchical and rigid.  They are bound by policies, procedures and processes that operate and are always focused on optimizing performance, taking waste out of the system and continuously improving. 
  • Adaptable organizations can do both…. they can keep one eye on optimizing performance and the other eye on innovation to accelerate growth become a disruptive force in the marketplace
  • Adaptive leaders tend to have the capacity to manage optimization and innovation simultaneously and they are able to structure their organizations in ways that support this ambidextrous capability.  The leadership role becomes one of investing in and protecting the innovative side of the organization unencumbered by and separate from the optimizing forces within the organization so that incubation can successfully take hold and then be brought into the mainstream “optimized” organization to transform and renew it.  Without that separation and protection, typically the optimized organization will kill innovation not out of intention but because of its primary focus on efficiency, use of standard processes/procedures and perfected execution.
  • Lastly, in order to be adaptive in the larger network both within the organization and ecosystem of key strategic partners, the emotional intelligence of an adaptive leader is critical to truly engage, listen, trust and empower the full workforce within a system so that they have ownership and not only bring their “hands” to work but their hearts, minds and hands, contributing to the constant scanning (many minds are better then 1 or a few at the top) and adapting required to stay in the game.

Video Transcript

What is Adaptive Leadership?

Let me just start with maybe a simple definition of adaptive leadership and that is really the ability to continuously and to rapidly recognize, make choices and adapt to those decisions that you make. So, that’s really it in a nutshell and it really has a lot to do with the capability of focusing and speed.

What Has Changed?

One is that we’re still, for the most part, operating in first or second generation organizations. By that I mean as far back as you want to think about organizations and industry, we still operate pretty much like a hierarchical type of organization with a lot of structure. But, a lot is now changing and so technology is really driving innovation in ways that is being very disruptive: such as the whole digital environment that we’re in. The amount of information that is coming at people at a faster rate is just amazing.

I’ll give you a case in point around this. If you look at Thomas Friedman’s latest book, it’s called Thank You for Being Late – An Optimist’s Guide to Thriving in the Age of Accelerations <>. He makes a really important point in this book that if you look at the technology curve going on right now, it pretty much is like a straight line up: exponential growth at a fast rate. You could think of it as big data, AI, all the stuff – sensors, everything that’s being monitored. The collection of data that’s just really unbelievable. But then if you look at the adoption curve, it goes almost across, maybe a slight rise to it. So, these two curves, if you have one going up and one coming across, what Thomas Friedman says is somewhere up in this area is where we are today in terms of technology, but the growth is happening so fast and the lag between organizations and human systems and technology is growing. And it’s growing at an exponential rate. So, what that means is that we’re still stuck in old forms of organizations, reliant mostly on hierarchical structure to make things happen, and yet information is just everywhere. Look at any kind of social media tools today and everybody is networked and wired and information just flows freely and moving. And yet organizations operate in a different mode. So, that’s a key driver to what is changing in the environment.

Another factor that’s a little bit different is that traditional organizations, again most organizations today, really focus on optimizing their business. They don’t have the ability to truly be what we call ambidextrous. They work for that quarterly result, to really reduce cost, to really make the organization as efficient as it can, standard process and procedures, all of those things that make organizations function really well. They overlay on that innovation because they’re trying to get growth and they’re trying to get innovation, but traditional ways of managing that often don’t work because what happens is the optimizing part of the organization is like a big fly wheel. So, it is moving and it operates in a certain way with as much efficiency as it can and when innovation comes in, innovation needs freedom and space to actually create things, break rules, procure things differently, partner differently, all sorts of different ways of doing things. And so, there’s a need for managing in a more ambidextrous way and protecting innovation in that way. So, that’s another driver.

And then I think the third major point here is that organizations are now operating much more as ecosystems, where before you were driven more by your organization, by your vision, your values, of what you could control, what you could influence out in the world. You know, you’d have supply chains and other things that connect you to the world, but now the unit of analysis really that we’re looking at is ecosystems. And ecosystems have a plethora of partners, of different things that are going on, everything from government regulation – everything about that particular industry and all the players in that environment. And all the moves that are taking place. So, it’s a much more dynamic, larger kind of context that leaders have to hold and so many things are happening now on a daily basis that it’s really hard to stay up with that and in control of that.

So, if you step back from that, net-net the world is rapidly changing. Technology advances are happening at a faster rate, at an exponential rate. The business environment is growing much more complex around these ecosystems and really having to wrap your mind around that and how you’re going to play a game with a lot of partners and not just by yourself. And yet, we’re still operating in this first/second generation organization model that really cannot adapt to that kind of environment. So, that’s some of the major context pieces that I would say are really important to consider.

3 Key Capabilities


Let me just start with recognition. So, what adaptive leaders first need to do is fully understand, again, the context that they’re operating and have the ability to continuously scan their environment. They’re looking for trends. They’re looking for what are emerging patterns that are happening out there. What disruptions are being generated by competitors, or within that ecosystem. Sometimes it might be another industry that makes a change and it has an effect on your industry and it’s not a direct connection anymore, but everything starts to influence everything else because they’re all somehow connected and wired together.

The job of that leader is, given the amount of information that’s generated almost every day, that you really can’t just rely on yourself and your top leadership team to actually have all that intelligence which hierarchies tend to do. It’s just like we designed management information systems years ago. Now, you have to engage your whole organization in understanding what’s going on because we’re all wired in. Everybody is kind of plugged in learning things and touching different parts of the ecosystem or different parts of information sources and what they’re tracking and what they’re understanding.

How do you harness that from a recognition point of view and really understand again those emerging patterns and all of that stuff. And they’ve got to operate in this ecosystem to really understand all of those trends and where disruptions might come from.

All of that makes recognition important. Think of that as like constantly environmentally scanning and it’s no longer on a once a year, when you’re updating your strategic plan – it’s a daily activity. It may be those changes don’t happen significantly in day to day operations, but there are trends that are emerging or patterns that are emerging that will have influence. You’ve got to keep monitoring that and understand that.

The other aspect is really staying in tune with your customer or your consumers, those that you’re serving, to ensure that you’re taking more of an outside/in perspective than an inside/out perspective. We assume we know what the customer wants and needs and will satisfy them. The game today is really understanding more what their needs are and what are they asking for and articulating so that adjustments can be made and you can be successful in that. Those are the key things around recognition that are important.


Let me go to the second one which is around choice. Choice is really based on, again, this constant stream of data and information and trends and paying attention to all of that.

You know leaders need to make choices and decisions regarding their strategy, their investments, their partnerships, how they’re going to serve their customers, all of those things. You can make independent decisions, but in this ecosystem of partners and where the market is moving, you really have to figure that out.  And also constantly figure out how do we differentiate ourselves in that ecosystem so that we can be successful and also capture value, profit, the revenues that are required to stay healthy and grow your business and succeed.

Choice then means constantly adjusting your current direction and your strategy. It’s not waiting for a yearly, strategic plan update time to do that. Plans are much more dynamic at this time. You constantly need to be adapting to that.

And it also means not just playing defensively. A lot of businesses just try to play defense and they’re followers to what’s going on in industry. You need to also be starting to think much more about being offensive in the sense of where are the disruptions that we can create with what our product or our services are offering so that you can take that lead position and really advance yourself. And that is a lot where the balance of being more ambidextrous comes in because you have to keep performing and take the cost out of your organization to be as efficient and as effective as you can.

At the same time, you need to keep innovating and so you need to figure out how to do that capability which I think is much more in the adapt kind of side of the third aspect of being an adaptive leader.


So, let me go into that and just elaborate on that a little bit more. I think the adaption part is probably the most challenging of all three. And I wouldn’t take anything away from particularly the recognition part because that scanning is essential in making those critical decisions. But when you come into the adapting part, you need to have an organization that’s designed for capacities that are really flexible and adaptable.

When we think about hierarchical organizations what I see as a trend that’s happening more and more is that people are moving much more to networked types of organizations. Much more fluid where they can tap resources and structure themselves. And that doesn’t mean that hierarchy doesn’t play a role, but it’s not like it’s a command and control role anymore. It’s like relying on different parts of the organization to bring intelligence and to be able to deliver and execute on things and to combine resources and capabilities much more flexibly as the environment shifts or changes, dependent on what the customer or the consumer demands are, the needs are, that they’re trying to do.

Again, I mentioned earlier that organizations are mostly in this first/second generation of a social system design and they need to start to think much more advanced in terms of making their organizations much more fluid and flexible.

Let’s talk a little bit more about become ambidextrous. So, not only to be an adaptive network in many ways, of how you use resources, but again, how do you manage much more in an ambidextrous way. And this is a lot more challenging than it sounds. It’s really easy to say, “oh yeah, we’ll just innovate and we’ll optimize the organization and do both at the same time.” But in practical terms it’s really difficult.

When you try to have one organization doing both innovation and optimization, again the optimization side of the organization tends to be dominant because everything is really pretty clear in terms of how it operates, from a procurement point of view or from a process point of view. And that fly wheel gets very tuned, very fast, to be efficient and effective.

When you have innovation the adaptive leader really has to separate that out, almost like a standalone organization for the kinds of things that you’re really trying to do that’s a major breakthrough. How do you resource it, fund it, support it, allow it to breaks rules. It needs some protection from a leader to allow all of that to happen.

Then once that incubation process really takes hold, it’s how you bring it into the mainstream to even maybe cannibalize your business and your existing business, or to imbed it in there as part of the normal way of doing work in more the optimized way.

But that growth has to have some protection in the meantime and I can just tell you over the 35 years or so that I’ve been working with organizations, that’s a very challenging aspect to do. Most leaders believe that they can do both with the same organizations and everybody is innovating and everybody’s doing normal business and you just don’t see the results. I could cite failure after failure of watching that happen over time.

This is a skillset that really has to get evolved, to not only manage your organization differently, really tap into the information sources of pretty much everybody in the organization, in creative ways of how to do that, and then to separate out your innovation from your normal business of what you’re delivering to your customers.

An ambidextrous organization can do both and they can really continue to keep the growth side going while they’re keeping the cost side and the efficiency side down to continue to be profitable and successful. I think those are kind of the primary pieces around adaptation that I would highlight. I mean there’s more nuances and things that we could kind of talk to, but I think that’s really the critical forces of that.

So, the last point that I think I would like to make, when you think about recognition, choice and adaption in this adaptive leader, I’d say there’s a personal skillset that’s really important and becoming more and more important over time and that’s their emotional intelligence. You know it’s not just being a very smart leader on the business side and all of that. The emotional intelligence comes in much more now in terms of how to really create an environment for collaboration, for sharing of information, for having empathy for customers or consumers, or even partners in some cases, and understanding the full sense of the human side of things.

To create a network organization that’s flexible and adaptable and fluid and can adjust, you’ve got to create trust in an organization. You really truly have to have people fully engaged in the business and committed to that larger vision and what you’re trying to do and understand that those human resources are such a critical resource to everything that you learn, everything that’s going on in the ecosystem or in the marketplace and they’re all contributing to that. It’s no longer up to a heroic leader to just really take that on and to maybe have one unit that’s a business intelligence unit that tries to do all of that work. It’s just not realistic in the way the world is working today. So, that capability of a leader to have greater levels of emotional intelligence, fits well with this kind of adaptive leader focusing on recognition, choice and adaptability and incorporating their own personal skillsets into that mix to be successful.

Those are the main points about adaptive leadership. I think time will tell as to where organizations go, but we need to accelerate and stay up with technology in our organizational form and in our leadership capability.

These are some of the trends I’m seeing these days that are becoming more and more dominant. They’re taking hold and they’re starting to root and I think we’ll see more and more of that in the future.

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