What’s Your Leadership AQ?

I’m sure you’ve heard of the terms Emotional Quotient (EQ) and Intelligence Quotient (IQ); but few people have heard of Adaptability Quotient (AQ), especially as it relates to leadership. AQ is defined as "the ability to adjust course, product, service, and strategy in response to unanticipated changes in the market"—and indeed, the Harvard Business Review characterised it as “the new competitive advantage.” Specifically, leadership AQ examines how adaptive and responsive leaders are to change and how they navigate the ever-changing environment in which they find themselves.

What Low AQ Looks Like

There are many examples of companies that have failed to extol the virtues of an AQ mindset. They include Blackberry, Toys R Us, Blockbuster, and Kodak. These companies have failed to innovate and stay ahead of the rapid changes in technology, and so have fallen by the wayside. They believed and relied on the fact that their current success would be impenetrable and that consumers would remain loyal to them, but in the face of changing consumer demands they were left high and dry. Often this occurred as the companies failed to read the market and really, really understand what the customers desired.

For example, at one time Nokia, the parent of Blackberry, controlled 41% market share in the smartphone market. They believed they were invincible as their phones were more robust, when dropped from 5 feet, than Apple and Samsung. And indeed, whilst that may have been true, the durability of the phone was not what inspired customers to purchase it. It was the apps and functionality. Hence, Blackberry rapidly lost market share when Apple launched its rival, which had much better functionality and performance.

How Leaders Demonstrate High AQ

Companies with a high AQ are able to spot customer pain points and trends, and shift gears to create new opportunities that leverage the company’s core competencies and expertise. In part due to their agile and adaptable leadership style, they are able to create self-managing teams that collaborate together on projects.

Leaders with a high AQ focus on creating a culture where everyone takes responsibility for the businesses success—a place where everyone is engaged and seeking out the best options for the business to thrive and not merely survive. Leaders with a high AQ are masters at empowering their team members to be their best. They delegate decision-making to the front line team members who can make the difference, and they appreciate that in order to become more creative and innovative they have to “let go of the reins” and give team members the space and opportunity to experiment. After all, success only comes from trying new ideas, getting feedback, and recalibrating the experience until it delivers what the customer requires.

Consequently, leaders with a high AQ recognise that the current pyramid style, command-and-control leadership structures no longer work, because the hierarchical structures and fixed routines lack the diversity and flexibility required for rapid learning and change. They appreciate the need for self-managing teams and shared leadership that comes together to address a specific concern and then dissipates once the project is completed. Leaders with a high AQ are able to pivot and quickly and easily respond proactively to events happening around them. Indeed, by keeping the big picture in mind, they are able to see the potential challenges on the horizon and therefore implement adaptability strategies in advance of what is happening.

How do leaders with a high AQ stay ahead of the game?

They study the “underdogs,” the new market entrants, and quickly learn from them. They value outsider's perspectives and wisdom that challenges the existing status quo. They never rest on their laurels, but instead are always thinking about the best way to innovate whilst paying close attention to the rapidly changing  needs of their customers. Take the hotel industry: who would have ever thought the largest “owner” of hotels would never own any bricks and mortar buildings? The same is true of the taxi industry, where Uber came onto the scene to disrupt the traditional taxi service.

Whilst actually measuring AQ is at present virtually impossible, I think we can all agree that leaders that fail to embrace an adaptable leadership style may well become the dinosaurs of tomorrow.