What is the Adaptability Quotient?
The Adaptability Quotient or “AQ” measures a business’ ability to greet changes in the marketplace, consumer preferences, and technology. In the definitive treatise on the adaptability quotient, entitled Adapt or Die, the AQ is defined as “the ability to adjust course, product, service, and strategy in response to unanticipated changes in the market.”
Since the turn of the 21st century, a business’ adaptive capabilities have been “thrown into the spotlight,” though few have turned their attention to it. The Adaptability Quotient is ultimately a variable in the equation of success, but has been frequently overlooked on account of not being well-understood, articulated, or broadcast to a wide-enough audience of business leaders.
As technology becomes more sophisticated, old business models topple beneath the weight of:
- technological advancements that usurp the place they formerly held in the market
- heightening customer expectations for:
It has become increasingly important–a matter of corporate life or death–that a business be able to handily adapt, update, and rework their business model as the marketplace changes and their customers’ needs evolve with that market. The inability to keep pace with change ultimately separates the winners from the losers in the economic rat race.
We witnessed a low adaptability quotient in the death (or deflation) of brands like Toys “R” Us®, Blockbuster, Kodak®, and BlackBerry®. When consumers abandoned in-store purchases in favor of cyber-shopping sprees; when the convenience of streaming overtook the experience of wandering about a video store; when the functionality of smartphones overtook the static design of the keyboard-wielding BlackBerry, it was the adaptability of these companies that was put to the test.
Not their ability to market themselves. Not the quality of their customer service. Not the strength of its internal operations. No matter the degree of competency they displayed in those areas, it wouldn’t save them in a rapid-fire market that they were not adapting to.
Their inability to look at the way the market was changing, acknowledge that their legacy business model had been outmoded, gut “the old ways” and begin restructuring around new consumer demands and newly available technology is what killed such companies. They had to swallow their pride and say “we need to change everything we’ve been doing in order to survive.” They needed to survey their competitors and implement the best of their competitors’ ideas in their own business. That’s not ruthless; it’s just business. And if you go looking for it, you see it left and right. People taking the ideas of competitors and improving upon them until the dollars follow. Blockbuster could’ve easily leveraged its name recognition and relationship with film distributors to quickly launch a rival streaming service and answer the threat of Netflix. But they didn’t.
Why is the Adaptability Quotient (AQ) important?
As Forbes contributor Sam Page puts it: “Businesses must embrace change to remain relevant.”
While changes in the marketplace that could put you out of business may seem ominous, those changes are actually rife with opportunity and unexplored avenues to profit. Page writes, “smart business owners and managers shouldn’t be concerned [about disruptions in the market that could put you out of business]. Instead, they should embrace change and find creative ways to expand.” Boutique owners, why not find a way to sell your stock on Amazon or Etsy, for example? Restaurants, why not begin offering meal subscription services or your own branded version of UberEats-type apps?
The benefits of enthusiastic adaptation include:
- New revenue streams
- Ability to leverage one’s brand to compete against existing players.
- Reach new customers and target markets by expanding beyond your business’ traditional space, be that brick-and-mortar or your traditional online space
To learn more about the importance of the AQ and adaptability at large, download your free copy of Adapt or Die here.