“Small minds are concerned with the extraordinary, great minds with the ordinary”. - Blaise Pascal

There is a lot of hype around innovation these days, and rightly so; it is an important determinant of competitive advantage. However, in the constant rush to innovate, it is easy to overlook a more fundamental and probably more important attribute...adaptability.

It is a big statement to say adaptability is more important than innovation. The reason we believe this is because an organisation which focusses on effective processes and adapts them to changes in their market or environment will survive a crisis, however, companies which overly prioritise innovation relative to incremental process improvement may become fixated with change for its own sake. This can lead to them missing the signals of potentially business threatening developments. If you could have only one, you would pick adaptability over innovation.

Becoming an Adaptable Organisation

“Innovation should be allowed to flourish, unfettered by the constraints of day to day commitments. Adaptability has to happen within these constraints”.

Truly effective organisations are adept at both adaptation and innovation. One of the hallmarks of teams which achieve this is they recognise the differences between the two and separate them. When treated as the same thing, neither is achieved.

Innovation can be incremental, but it can also be radical or disruptive. It may involve creating entirely new products or processes and so it should be unfettered by the constraints of the existing operating model. Adaptation, on the other hand, happens within these constraints. It describes the way an organisation responds to a changing situation or context, or to an external event, while continuing to function.

Innovation can (and generally should) take place in an environment which is separate from day-to-day operations, in which extreme new opinions, ideas or products can be safely experimented with, whereas adaptation takes place in a live situation while continuing to operate and meet commitments.

Innovation is part art, part science and is achieved by bringing together cognitively diverse talent, giving it free rein in a stimulating, unconstrained environment and not letting preconceptions shape the process. Adaptation, on the other hand, is more scientific. It involves careful preparation, precise analysis and proper validation.

The first step to becoming an adaptable organisation is to identify underlying conditions which could threaten your business. This does not mean trying to predict specific events. Many planning projects fail because of trying to predict the unpredictable. We have seen two examples of this in the past few years: It is easy to say with hindsight that a global health scare was a known risk and businesses should have been better prepared, but this is missing the point. It wasn’t the pandemic which damaged businesses, it was the fact that customers could not engage with businesses and staff could not get to work. There are many reasons these conditions might have occurred; a major natural disaster, for example, could have had the same effect. Understanding the risks associated with isolation of people was what was needed, not predicting Covid-19, and this could easily have been identified as a core risk.

Similarly, many businesses have recently suffered from supply chain disruption and higher energy prices. The fact these have been exacerbated by the war in Ukraine is immaterial. It wasn’t necessary to predict a war, simply to identify higher energy prices as a major risk to business and have a contingency plan in place to deal with it.

Unfortunately, contingency plans cost money, and greed, complacency and confirmation bias make it easy to dispense with them. Many organisations are adept at explaining risks away and creating a narrative to support the status quo, rather than investing in simple counter-measures to protect themselves.

The second step to adaptability is to create a map which helps you read the landscape. Truly adaptable organisations spot the signs of change earlier and better than others. In this age of abundant data and cutting-edge technology this should be easier than ever, however, there is so much information available it is sometimes hard to see the wood for the trees. Mapping how data interactions are shifting can give a good indication of disruptive forces coming into play.

Figure out what data you have which can give an indication of when the operating environment is changing. This should include contextual factors such as economic, political or social events; transactional factors such as changing demands from customers, employees or other stakeholders; and behavioural factors, such as shifting communication patterns or changes in timescales. Effective scenario planning involves mapping how these factors interact. This allows you to spot unusual developments which can predict upheaval.

Step three is to understand how people react under uncertainty or pressure. This begins with self-awareness at personal and team levels. People’s behavioural preferences often change under pressure and recognising this, individually or as a group, can be a highly effective way of knowing when things aren’t right. Psychometric profiling is a great tool for increasing awareness of both individual and team behaviours.

MindAlpha provides scenario planning and psychometric profiling programmes which can help an organisation build a truly adaptable mindset. These will help your organisation read the signals of change and prepare individuals and teams to deal with the unexpected in a calmer more structured way.