Adaptive Leadership

Back in 2003, competition in the U.S. consumer electronics market was particularly fierce, with Wal-Mart, Target and Costco threatening to take market share from perennial leaders, Best Buy and Circuit City.

A Best Buy vice president, Julie Gilbert, recognized that her organization had missed an important opportunity to increase sales. Historically, it had focused on young, male customers, and it had ignored the significant influence that women had in the market.

Following this insight, Best Buy made its stores more appealing to female customers. It widened the aisles for baby strollers, softened the harsh lighting, and lowered the volume of the background music. Four years on, it had achieved a $4.4 billion increase in revenue from female customers – an 11 percent rise in its total revenue – much of which was credited to Gilbert's change in strategy.

Like Best Buy, all businesses must adapt to different environments, whether these come from changes in technology, customer expectations, laws and regulations, or employees' expectations. Leaders must find ways to adapt and take advantage of the opportunities that these changes bring.

So what's the best way to do this? One useful strategy is to take an adaptive leadership approach. In this article we'll explore what adaptive leadership is, and we'll think about how you can use it to manage unexpected challenges in your business environment.

Adaptive Leadership Definition

In his 1994 book, "Leadership Without Easy Answers," Ron Heifetz, a Harvard University professor, described adaptive leadership as a set of strategies and practices you can use to overcome obstacles, accomplish meaningful change, and adapt to challenging and complex environments [1].

Heifetz based his theory on evolutionary biology, and the observation that plants and animals adapt to changing conditions over time. They keep what is essential for their survival, while things that aren't necessary tend to fall away as the species evolves.

Similarly, adaptive leaders take the most useful knowledge, skills and values from past situations, and use them to benefit future ones.

According to Heifetz, the adaptive leadership process has three stages:

• Observing events and patterns.
• Interpreting and developing hypotheses.
• Designing interventions.

Terms reproduced from "Leadership Without Easy Answers" by Ronald A. Heifetz. © 1994 by the President and Fellows of Harvard College. Reproduced with permission of Cambridge Mass: The Belknap Press of Harvard University Press.

These steps are iterative, so once you've completed them all, you repeat the process and refine your observations, interpretations and interventions until you're satisfied with the solution.

Advantages of Adaptive Leadership

Organizations that adjust to changing circumstances do better financially than ones that don't, according to this study [2]. It claims that agile, flexible businesses continually demonstrate strong, sustainable performances and outperform their peers during volatile periods.

Similarly, leaders who adopt an adaptive approach alongside a transformational leadership style are often the best equipped to steer organizations through turbulent periods of change. They raise morale by generating solutions to issues with other team members, and then continually refine those ideas until they arrive at the best one. This iterative approach means that the final decision is typically the most effective one.

The process of coming up with multiple solutions builds a culture where people can have healthy debates with one another. It also empowers them to generate their own ideas, and to think independently.

Disadvantages of Adaptive Leadership

Adaptive leadership does have its drawbacks. The process of exploring new possibilities can bring a degree of uncertainty, and this can create friction among team members. Leaders may resent their ideas being challenged, and block others' suggestions.

It's also not a leadership style that's suitable in all situations. For example, it's better applied to more unpredictable environments than stable ones. When an industry is mature, leaders may need to adopt a style that's more disruptive to innovate and push the business ahead.

Furthermore, adaptive leadership may not be appropriate when senior managers need to make important decisions quickly. It takes time to develop different processes and for people to adapt to new situations. Therefore, a more autocratic leadership approach may be suitable in this environment.

How to Become an Adaptive Leader

The Boston Consulting Group's Strategy Institute outlines four dimensions that you must succeed at to become an adaptive leader:

1. Navigate the business environment.
2. Lead with empathy.
3. Learn through self-correction.
4. Create win-win solutions.

Reproduced from "Adaptive Leadership" by The Boston Consulting Group's Perspectives Series.

Let's examine each dimension, and identify the skills you'll need for each one.

1. Navigating the Business Environment

Adaptive leaders must embrace uncertainty and adopt new approaches to perform well in changeable environments. To succeed in this dimension, you should:

• Seek input from team members at all levels of the organization. People in junior roles are more likely to be critical of processes and ask challenging questions than those further up the hierarchy.
• Share the leadership role. No one person is the best leader in all situations. Therefore, you should allocate leadership responsibility to those who are most suited to making particular decisions to achieve the best result for your organization.
• Question the world around you. Constantly explore risks and test your assumptions by creating hypothetical "what if" scenarios.
• Remain objective. Heifetz used the concept of "getting on the balcony" as opposed to "being on the dance floor" to refer to the perspective you need. This means spotting trends and patterns rather than focusing on the minutiae of day-to-day activity.

2. Leading With Empathy

Adaptive leaders create a shared sense of purpose, and manage through influence rather than command and control. To succeed in this dimension, you should:

• See the world from others' perspectives. The Four Frame Approach and ORAPAPA can teach you to manage challenging situations by viewing them from different perspectives.
• Develop rapport with your team. Before you can influence others, you need to make a personal connection with them. To do so, you'll need to understand their beliefs, values and concerns. You can strengthen your bond with your team members by improving your emotional intelligence.
• Create a shared sense of purpose. What is the larger purpose that you're working toward? You can motivate your team by presenting a clear vision of your organization and its mission. These should align with your team members' values, to give greater meaning to their work.
• Reward accomplishment. Recognize team members' accomplishments. Rewards needn't be financial; for example, you might give people interesting projects, or additional responsibility, depending on what motivates them. By rewarding them, you build their loyalty and commitment to the organization and to your goals.

3. Learning Through Self-Correction

Adaptive leaders encourage – indeed, insist on – experimentation. Of course, sometimes ideas fail, but that's how organizations learn. To succeed in this dimension, you should:

• Build trust. For team members to share their ideas, they need to feel comfortable. Our article, Building Trust Inside Your Team, helps you create cohesion within your group. You can also build team members' confidence to speak up and engage in a healthy debate.
• Encourage creativity. The more ideas your people generate, the more likely it is that you'll arrive at an effective solution. To jump-start your team's creativity, encourage them to brainstorm and if certain team members dominate conversations, consider using techniques such as Round-Robin Brainstorming or Crawford's Slip-Writing Method to give everyone the chance to contribute.
• Foster a learning environment. As part of this process, you should encourage people to give diverse opinions and offer alternative solutions. They should understand that failure is an acceptable – and expected – part of solving a problem.
• Experiment and test ideas. Business experiments help you to test your ideas and gather more information before you commit significant resources to a large project. To conduct one, work with your team to create a hypothesis, design your experiment, carry it out, and analyze the results. Sometimes, you can iterate, based on what you've learned, until you arrive at the best possible solution.
• Manage uncertainty. Given the nature of a changing environment, people need to move out of their comfort zones. Our article, Managing Project Uncertainty, offers strategies you can use to reassure team members that unpredictable situations represent opportunities for development.

4. Creating Win-Win Solutions

Adaptive leaders focus on achieving success for both the organization and its external network of stakeholders. To succeed in this dimension, you should:

• Build acceptance. The faster your people adjust to change, the less disruption there will be. Our Change Management articles offer a number of tools and techniques that you can use to help change run smoothly, and to communicate organizational uncertainty effectively. Test your skills to pinpoint any areas that you need to develop further.
• Extend engagement outside your four walls. Your organization's success likely depends on the contribution and engagement of its external suppliers, vendors and customers. Allow them to participate in decision making and ask for their opinions regularly.
• Strengthen the company's reputation through social responsibility initiatives. Leaders must focus on more than the bottom line to succeed in the marketplace. By connecting with its community, an organization can help others while improving customer loyalty and its reputation as an employer of choice.