The Adaptability Gap

A piece of research from Deloitte caught our attention recently.

In its latest Human Capital Trends report, 70% of leaders said that speed and agility will be their organisation's primary source of competitive advantage over the next three years. Yet despite recognising its importance, only 7% believed their organisation was leading the way when it came to helping people continuously adapt.

We found that gap interesting.

It put numbers around a theme that seems to come up in a number of conversation we have with strategy leaders.

Over the past few months, we've spoken with dozens of Heads of Strategy, Chief Strategy Officers and transformation leaders through The Strategy Brief and our Strategy Circle community. Whilst the industries have varied, the challenges are similar.

These organisations know where they want to go. The challenge is, of course, getting there.

A recurring theme in our recent Strategy Circle discussions has been the tension between long-term transformation and short-term delivery. Strategy leaders describe calendars dominated by operational issues, resources tied up in existing commitments, and teams stretched across so many priorities that little capacity remains for anything new. The result is an organisation that understands the need for change but struggles to create the space required to make it happen.

This is where the conversation around agility can become misunderstood.

When people talk about agility, they tend to think about speed. Faster decisions. Faster delivery. Faster responses to market changes.

But speed is usually the outcome, not the capability. The real capability is adaptability.

Adaptability is what allows an organisation to absorb new information, challenge existing assumptions and redirect resources when circumstances change. It is what enables a business to respond when a competitor enters the market, a technology matures faster than expected, or a growth strategy fails to deliver the results originally anticipated.

In practice, this is remarkably difficult.

|Most large organisations were designed for a different era. Their structures, governance models and planning cycles were built to maximise consistency, efficiency and control. Those characteristics remain important, but they can also make adaptation harder. Every additional approval layer, steering committee and reporting process may improve oversight, but they can also increase the distance between recognising a problem and responding to it.

Several strategy leaders have described this challenge to us in different ways.

One spoke about the difficulty of reallocating resources away from established priorities, even when the rationale for change was obvious. Another described an organisation where almost every strategic initiative made sense in isolation, but collectively they exceeded the capacity of the business to deliver. Others pointed to governance structures that had gradually expanded over time, creating more coordination but slower decision-making.

This may explain why the role of the strategy function appears to be evolving. Historically, strategy teams were often responsible for analysis, planning and identifying future opportunities. Those responsibilities remain important, but increasingly the conversations we hear are focused on something else entirely. How do we create capacity? How do we prioritise effectively? How do we stop doing things that no longer matter? How do we make decisions faster? How do we maintain alignment while still allowing flexibility?

These questions are less focused on planning and more on adaptation.

This would suggest that organisations need to become exceptionally good at adjusting their strategies as conditions change. In an environment where technology, customer expectations and competitive dynamics continue to evolve, the ability to adapt may prove more valuable than the ability to predict.

That is what stood out to us in Deloitte's research. Most leaders already understand that adaptability matters. The challenge is that building it requires organisations to rethink some of the very systems that made them successful in the first place. And judging by the conversations taking place across the strategy community, that work is only just beginning.