How to survive and thrive despite disruption
From the introduction of sweeping technological upgrades like AI and robotics to Gen Z’s entry into the workforce, businesses are no stranger to the idea that they need to quickly evolve or risk falling behind. But when COVID-19 hit, the disruption was seismic. Companies had to rethink everything from revenue goals to general operations seemingly overnight.
Some have been unable to or are struggling to keep pace with this unprecedented level of change. But others have met the challenge head on: Luxury fashion and beauty brands LVMH and L’Oreal quickly shifted production focus to hand sanitizer, Zara and others became mask manufacturers and many others completely virtualized their processes in a 24-hour time span.
This ability to quickly adapt is a fundamental trait for companies to remain competitive in an increasingly tumultuous environment—and that extends well beyond COVID-19. More changes are sure to come, and building and embracing a culture of adaptiveness is the key to ensuring companies are prepared for whatever lies ahead.
The Importance of Organizational Adaptiveness Today
Organizational adaptiveness is a company’s ability to embrace change rather than fear or avoid it. Adaptive organizations iterate to stay relevant—constantly evaluating what’s working, what’s not and then reacting accordingly.
But based on an analysis of Mercer’s Global Trends report, most companies today haven’t invested in this skill. Instead, many are only “surviving” because they’re measuring employees’ value simply based on existing knowledge (or their IQ). It’s these businesses that tend to be held back by their lack of innovation and engagement. Others, meanwhile, that measure employees’ value based on their capacity for emotional intelligence and empathy (or their EQ) are referred to as “changing companies.” These organizations are more likely to successfully navigate change and uncertainty—but given the accelerated rate of change today, an EQ-forward approach isn’t necessarily proactive enough to prevent companies from falling behind.
We’ve come to use the military term VUCA to describe our perpetually unstable business world—it’s volatile, uncertain, complex and ambiguous. Certainly, technology is the primary driver of this change. In all 10 advanced and emerging economies polled in a Pew Research Center study, for example, large majorities say that robots and computers will probably or definitely do much of the work currently done by humans in the next 50 years. But it’s not just advancements in AI that are upending the status quo. Members of Gen Z, which is projected to make up 36% of workers by the end of 2020, have different expectations of and attitudes regarding work, which will impact both engagement and performance.
In the face of these radical changes, companies will need to focus on employees’ AQ (adaptability quotient), which focuses on resilience and flexibility, to ensure they’re ready and able to evolve no matter the conditions.
How to Create a More Agile Workforce and Business
This attitude shift starts at the leadership level, with executives both setting an example and providing the necessary resources to build a more flexible, versatile work culture. That includes empowering employees to advocate for change by bringing new ideas to the table (and then actually implementing them) and providing regular opportunities for honest feedback to measure employee buy-in and anticipate potential conflicts. It’s also crucial to free up managers to coach and inspire their team members rather than burdening them with unnecessary administrative responsibilities.
To make these things a reality, adaptable companies prioritize continuous learning—focusing less on specific product output and more on innovation. They regularly provide employees with opportunities to hone both their industry-specific and leadership skills (often through online courses or conferences). They also foster an environment that encourages risk-taking and regular experimentation at every level. In doing so, failure becomes a less frightening outcome, and employees get more comfortable testing out new ideas and processes. When adaptable organizations do take larger, more notable missteps, they’re able to learn from their mistakes and alter policies for better future outcomes.
Winning With AQ
So far, COVID-19 has challenged companies to examine just how adaptable they are, and those who prioritize agility are thriving despite social distancing and an economic downturn. But this isn’t a one-time about-face. Every organization needs to adopt a new mindset moving forward and take steps now to help their workforces develop resilience, versatility and empathy in the face of unforeseen obstacles.
After all, inflexible companies don’t risk simply falling behind—they are disrupted out of existence. Forbes reported that “of the companies listed on the Fortune 500 in 1955, only 61 (or 12%) remained by 2014. Eighty-eight percent of the original set of companies either went bankrupt, merged or fell from grace due to decreased total revenues.” On top of which, “50 years ago, the life expectancy of a firm in the Fortune 500 was around 75 years. Today, it’s less than 15 years and declining.”
The businesses that will be around for the long haul are those that are nimble enough to grow and evolve alongside their employees, which is why it’s time for all of us to adapt.