Adaptive Capacity—What You Need to Know, and Why

You’re probably familiar with the concept of adaptive capacity, even if you’ve never heard the term before. It’s the subject of Juan Carlos Eichholz’s book Adaptive Capacity: How Organizations Can Thrive in a Changing World.

Eichholz defines adaptive capacity in chapter one as the ability of an organization to engage in a reframing process involving a wide variety of factors such as “shareholders’ and employees’ mentalities and behaviors, values, loyalties, attitudes, competencies, and habits…it is closely tied to many other factors, including human emotions.” This process, if it is successful, leads to adaptive change, which is necessary to remain competitive in today’s business environment.

Eichholz offers an example of adaptive change in the prologue to his book. He recounts a story about the early days of Google, when it was just dawning on Microsoft that they might pose a threat to their software empire. Bill Gates became aware of Google’s potential to shake up the market by looking at job postings and realizing that Google was looking to hire the same sorts of experts that his own company frequently employed.

But Microsoft was unable to act quickly and drastically enough to stop the powerhouse of Google. As a result, Microsoft has failed to achieve the kind of foothold it had in the 1990s in the 2000s. This is due to its failure to make adaptive change.

The stakes are high when it comes to adaptive capacity and change. Markets, and especially technology, move very fast these days. If your organization doesn’t have the tools, systems and values in place to adapt quickly, you’re likely to find yourself surpassed by more flexible organizations.

I’ll be writing an ongoing series on adaptive capacity and how you can take steps to enhance your organization’s ability to engage in adaptive change, based on 5 factors:

  • Purpose
  • Strategy
  • Structure
  • Culture
  • Talent

I will discuss how each of these factors must be examined in order to maximize your organization’s adaptive capacity.

Understanding adaptive capacity is not an easy task. Eichholz likens an organization to a forest: the health and adaptability of a forest is a function of its individuals (the trees), but also of larger forces like weather patterns, the local ecosystem, environmental health, etc. It’s not just a matter of not missing the forest for the trees, as the old saying goes; it’s about understanding the complexity of the vast web of relationships that allow the forest to flourish and evolve.

A coach can provide you the tools you need to evaluate your organization’s adaptive capacity and to enact changes that will improve its ability to adjust to internal and external factors. I’d love to hear your thoughts on the matter. You can contact me at my website or on LinkedIn.

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