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Adaptive Capacity: How Organizations Can Thrive in a Changing World (Eichholz, 2014)

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Juan Carlos Eichholz

"Adaptive Capacity is the Holy Grail for all organizations and societies that seek to thrive in a changing and challenging world. And this book points the way. It gives us all a new foundation... to meet the torrent of adaptive dangers and opportunities we face today and into the future..." - Ronald Heifetz, Founding Director, Center for Public Leadership, Harvard Kennedy School

"organizations... change over time, adapting to external conditions and needs through an evolutionary process that allows them to preserve what is essential, discard what is no longer required, and rearrange other aspects of themselves in order to better fulfill their goals."

"The sooner a company senses the tension created by new circumstances, the higher the likelihood of successfully facing the adaptive challenge posed by those circumstances."

JLJ - At a very high level, perhaps adaptive capacity is simply a trick that often works, when intelligently constructed with strategic foresight, especially in an uncertain, changing environment. A case-study-rich business-school-style book, full of the typical hero-worship of CEOs and successful companies, telling overtold story after story (...of soccer teams, which doesn't quite work for an American audience) of the corporate winners and losers of today as they struggle to maintain positions of dominance in an industry, or even survival in difficult times.

The successful companies - Eichholz seems to be saying - seem to have the ability to continuously reinvent themselves when necessary, to position themselves for success by offering not what has worked in the past, but what is deemed will work in the market of today, with an eye towards what might work tomorrow. Such an adaptive capacity strategy serves, in the opinion of author Eichholz, as the critical key not only to survive, but to thrive, in an uncertain changing world.

p.5 At the end of the book, you should be prepared to answer these four questions about your organization...

  • How much adaptive capacity does it have?
  • Is that adaptive capacity enough to meet the challenges it faces?
  • How can its adaptive capacity be increased?
  • What are the variables that may increase its adaptive capacity?

p.9 Charles Darwin... His theory can be summed up in his famous line: "It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change."

p.11 If there weren't a problem, adaptation wouldn't be necessary.

[JLJ - Show me a situation, or a predicament, without perfect knowledge, where adaptation of some kind is not necessary. It is necessary IMHO in virtually all situations in order to 'go on.' In business, you cannot simply go to the customer and take their money. The customer must select you, and select you again. This takes some scheming and some deep perception of value, from the customer's point of view.]

p.21 The central theme of this book is the importance of adaptive capacity for sustainable business success, but adaptation is not the only important task that executives must perform. Another type of work, which we call technical work, must be performed, and performed well.

p.27 The essence of a problem is the gap that exists between our aspirations - as defined by ourselves - and the current reality - as perceived by ourselves... It's precisely that tension that makes us move and potentially change.

p.28 a degree of responsiveness to tension is crucial for adaptation to take place.

p.29 Being responsive to those signals that challenge the current equilibrium will allow you to feel more tension and react sooner to the problem you are facing, in this way eventually adapting... We see, then, that tension and holding environment go hand in hand. Tension is the source of adaptive work, but when tension is not contained it can be destructive. When there is disequilibrium, there also needs to be a powerful holding environment to make it productive.

p.30 The sooner a company senses the tension created by new circumstances, the higher the likelihood of successfully facing the adaptive challenge posed by those circumstances... Having a greater responsiveness... is what allows an organization to respond to whatever change may represent a threat to the current equilibrium, letting the consequential tension be felt instead of disregarded or avoided.

p.31 Increasing the adaptive capacity, as mentioned, requires strengthening the holding environment, enhancing the responsiveness, or both.

p.43 Short-term results are important to keep you alive, especially when things are messy. But thinking in the long term, those results should serve as an investment in support of the deeper goal authorities need to focus on, namely the building of adaptive capacity. This calls for strengthening the holding environment and enhancing the organization's responsiveness, which will allow tension to be productive.

p.43 Authorities today must learn to mobilize their people to undertake the adaptive work that is necessary

p.65-66 The more adaptive an organization is, the better suited it will be to face the specific adaptive challenges that its own situation confronts it with... The biggest challenge, therefore, is to make the organization evolve in a way that will always make it more adaptive. If this is properly done, the organization will have a higher adaptive capacity than that required by the adaptive challenges it will confront.

p.77 We've said that everything starts from a problem. We've also said that organizations - and people - face problems differently, depending on how large their adaptive capacity is. The larger the adaptive capacity, the more rapidly and thoughtfully an organization (or an individual) will face problems, taking them as challenges that ought to mobilize people to do adaptive work. And the more adaptive work the organization performs, the more its adaptive capacity will increase. It's a virtuous cycle.

p.86 In the knowledge era, the question is how to mobilize people so that they can make use of as much of their potential as possible... the type of work required to be competitive... is less technical and more adaptive, which means that more learning and less repetition is required.

p.87-88 organizations... change over time, adapting to external conditions and needs through an evolutionary process that allows them to preserve what is essential, discard what is no longer required, and rearrange other aspects of themselves in order to better fulfill their goals. This evolution is a process of experimentation that looks for specific changes in what is expendable but potentially relevant, that tests variations and makes selections out of those variations based on their differing levels of success.

p.88 In biology, evolution is the result of a blind process of genetic variation, whereas organizational evolution is the result of a purposeful process of learning through experimentation... when organizations adapt and survive, it is because of the adaptive capacity they have developed through a deliberate act of leadership.

The big challenge for organizations, then, is how to develop a larger adaptive capacity.

p.94 As we've discussed, change is always triggered by a problem, which is the gap between aspirations and reality.

p.94-95 The first stage of an organizational change process, defining the challenge... As part of the definitions stage, it is important to create a narrative that explains why this change is necessary and how it touches every person within the organization

p.95 The second stage of an organizational change process is about deploying the solution.

p.96 Finally, the third stage of the organizational change process is about achieving sustainability.

p.98 The change process will need tension, which is the expression of the necessary disequilibrium. But if you don't want it to become destructive that tension needs to be contained. Thus it is important to make sure that the holding environment is strong enough for tension to be productive rather than destructive

p.99 You must never forget that the essence of adaptive work is learning, which by definition is about experimentation, that is, trial and error.

p.103 As we have seen, the adaptive dimension of a change process is crucial, and failure is almost always linked to having neglected this aspect of the process.

p.105 Adaptive change is about mobilizing people, not communicating ideas or facts to them.

[JLJ - ...technically mobilizing resources, which includes human resources - people]

p.111 increasing adaptive capacity should be a conscious process, addressed as part of specific business challenges the organization has to confront to continue thriving, or addressed as an organizational challenge on its own. Either way, defining the underlying adaptive challenge and designing a process to meet it are two key elements required to move forward.

p.122 there's a strong connection between having a purpose and being more adaptive... people with a purpose do not get trapped in the comfort or the difficulties of the status quo; when adaptive challenges arise, they will find their way to make a difference, challenging themselves to change and thrive as circumstances require. Organizations with purpose will do the same

p.138 The more a strategy is designed to take into account new events that appear down the road and new initiatives that may be pushed... the more adaptive the organization will be.

p.138-139 Within the dimension of strategy are five key variables you need to think about and measure in pursuing greater adaptive capacity:

  1. Awareness of changing circumstances that may affect the organization
  2. Reflection on these circumstances and on the response options available
  3. Involvement of a broad range of your people in developing and testing strategy ideas
  4. Continual experimentation with new strategic directions
  5. Simplicity, which makes strategy easy to communicate, understand, and follow

p.148 If the question "Why?" points us toward the ultimate reason for what we do, the question "Why not?" leads us to challenge conventional wisdom and find reasons for what we hesitate to do.

p.149 If there is no one empowered to ask "Why not?" it is likely there will be no further discussion. But if the question is asked and a real answer is required, the group will be forced to think... and perhaps decide that running an experiment to test the new idea might be worthwhile... Whatever the final decision may be in any specific case, asking "Why not?" forces a company to be more aware of what is going on, to reflect... to experiment with new ideas, and to arrive at simple strategic concepts that most people can understand and support.

p.174 As we've seen, adaptation is based on experimentation, which is nature's chief tool for permitting organisms to learn new ways to adapt and thrive.

p.184 It was Jack Welch who popularized the idea that organizations, in the end, are nothing more or less than the talent they are able to attract and mobilize

[JLJ - An organization is simply a scheme for accomplishing directed tasks, carefully arranged so that in the end, a profit or other end result is available to the owners/operators.]

p.188 Organizations evolve through facing their adaptive challenges rather than avoiding them.

p.200 adaptive capacity... Every organizational decision should be oriented toward increasing that capacity