The Adaptability Quotient (AQ)

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Whether a startup has the potential to become a success very much depends on its founder(s). To assess the leadership of a startup most investors tend to assess their IQ (intellectual intelligence) while others prefer to test their EQ (emotional intelligence).

Natalie Fratto, VP Firmwide Strategy at Goldman Sachs, suggests a third option: testing one’s ability to adapt to rapidly changing circumstances, i.e., one’s Adaptability Quotient (AQ).

While we don’t believe that AQ should be regarded as the ‘single most important determinant’, as stated by Fratto, we agree that one’s potential to adapt (or readiness to change) could be an important foreteller of one’s potential for success. And this applies not just for startups. An AQ strategy would allow us to measure, test and improve the adaptability potential of teams, organizations, and even governments.

TED TALK

AQ ASSESSMENT

In her TED talk, Natalie mentions three tricks to assess one’s AQ:

  • What-if Questions – “What would you do if a competitor offers a similar product half your cost price?”
  • Signs of Unlearning – Seek to learn what people presume they already know and are willing to override with new information, i.e., return to a zero mindset.
  • Infuse Exploration – Focusing on further exploiting existing product-market fits makes you blind for what’s around the corner. Previous success becomes the enemy of one’s adaptability potential.
According to Nathalie, we all can learn to adapt to change. However, not everyone seems to be willing to leave behind the comfort of business-as-usual. After all, history teaches us that most companies tend to ignore change (Kodak, Blockbuster, IBM, etc.).

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