In the wake of the pandemic, a new measure of performance is coming into focus: the Adaptability Quotient (AQ).
Defined by The Ivey Academy as “the ability to determine what’s relevant, to forget obsolete knowledge, overcome challenges, and adjust to change in real time,” the Adaptability Quotient may be one of the most important benchmarks for businesses operating in the post-Covid-19 world. Now more than ever before, organizations need to be able to pivot on a dime.
Below, I’ll explain four reasons why adaptability is the most important skill for founders to develop in 2021 and beyond.
1. Adaptive firms are highly competitive
“The expiration date of employee skills is being shortened by technological advancements, so much so that a typical business competency is relevant for approximately 4.2 years, down from 30 years in 1984.”
The significant amount of churn in business skills today necessitates adaptation. Firms that refuse to adapt and continually embrace new skills and methods almost guarantee a rival will outperform them in 4 years.
2. Adaptive firms are innovative
According to the Ivey Academy, those with a high AQ actively demonstrate open-mindness. And openness, one of the Big Five Factors of personality, has been linked with innovation.
“. . .a growing number of adaptive competitors are using an array of new approaches and technologies . . . to generate, test, and replicate a larger number of innovative ideas faster, at lower cost, and with less risk than their rivals can.”
3. Adaptive firms are agile
By their nature, adaptive firms are more agile than their counterparts. They’re constantly aware of changes in their environment, and as such, are able to respond to them quickly.
“According to Project Management Institute’s Pulse of the Profession® In-Depth Report: Organisational Agility, highly agile organisations are twice as likely to have increased success with their new initiatives as their counterparts with low agility. Agility may also be linked to profitable growth. Research conducted at the Massachusetts Institute of Technology suggests that agile firms grow revenue 37 per cent faster and generate 30 per cent higher profits than non-agile companies.”
4. Adaptive firms are resilient
One of the adaptive firm’s biggest strengths is their ability to pivot, given that it makes them incredibly resilient to market forces. Many of the world’s most valuable companies only achieved success after moving into a different industry or product category.
“Adaptive companies give themselves and their shareholders multiple shots on goal. If DuPont had never moved past gunpowder or Berkshire Hathaway has [sic] stayed focused on textiles, neither would be what they are today.”
Adaptability Quotient is the New Gold Standard
Today, we are seeing business of all shapes and sizes embrace adaptability, be it restaurants getting into the consumer packaged goods space, retailers launching curbside delivery programs, or organizations shifting towards remote work. As the world’s most successful companies have demonstrated, adaptability isn’t merely about survival — it’s about being able to overcome whatever challenges come your way so you can dominate your marketplace.