Transforming Organizations With Adaptive Space [Free Book Chapter]


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The term “agility” has become something of a catch-all for many of the problems we see in organizations today. Despite this, often when we think of “agile” in a business context, I have doubts that many of us are thinking of our organizations (if you actually do, then you probably deserve a prize of some kind). The reasons that this negative perception continues to persist are numerous. Most organizations are still structured based on hierarchical command and control models that whilst process-heavy and stable, are fundamentally out of touch with the realities of modern markets and the socio-economic environment.

Despite the interest in enterprise agility of late, many transformation efforts face serious challenges and do little to change the organization beyond nominal improvements. To assist with these transformation efforts, Michael J. Arena‘s recently published book, Adaptive Space: How GM and Other Companies are Positively Disrupting Themselves and Transforming into Agile Organizations, provides a succinct overview of the emergence of what he calls “Adaptive Space” as an approach to contemporary business agility. The book was developed from a decade-long research partnership that sought to understand why some companies succeed in adapting while others did not. Arena describes Adaptive Space as:

“the relational and emotional freedom for people to freely explore, exchange, and debate ideas. It operates as a sort of freetrade zone for ideas, by tapping into the power of network dynamics, adaptive space creates connections that serve to discover, develop, and diffuse new ideas into and across an organization.”

[Download The First Chapter Of The Book]

So why are we all interested in agility?

In some sense, agility in the business world is simply an organizational preference for uncertainty. This idea seemingly goes against what many were brought up to understand – that uncertainty is bad, certainty and control is good. As such, many existing organizations have crafted detailed operational models that have streamlined processes and implemented advanced systems, analytics, and controls in order to deal with the uncertainties they face. Arena suggests this is a natural and intuitive reaction; though it may not be the right one in today’s environment. He says that in contrast, today’s agile organizations recognize both a need for strong internal entrepreneurial activity, and also to embrace the tensions generated by external pressures to adapt and produce.

There is a pervasive fear among many organizations about the disruptive competition that’s hidden behind the horizon, ready to scuttle operations. This is a fear because many companies can see where their competitors have an advantage, but don’t know how to react to that threat themselves. They’re essentially bringing knives to a gun fight. This is a recurrent story in the modern digital age – the up-and-coming agile organization pivots around the established, larger company with ease. It’s not because the people or ideas in either company are significantly better or worse, it’s that the distance between thought-to-action in both companies is quite different. The space between people is different, and therefore the space between the business and the market is different.

“Most organizations are designed to facilitate, motivate, or constrain an individual’s behavior toward driving its core purpose. This was a successful strategy when organizations were operating in relatively stable environments. However, in today’s dynamic environment, organizations need to be more liquid than static.”

How does Adaptive Space help organizations?

The main shift that adaptive space helps to facilitate, is that it provides a space for entrepreneurial mindsets to flourish. It allows for fast failure and correction, and provides a much needed space for dissent. These concepts aren’t new, but allowing for failure and dissent in theory and practice within an organization are very different things indeed. In today’s world of social media, Glassdoor, and LinkedIn, organizations must take transparency and openness seriously into consideration. It’s entirely plausible that great ideas will rise and flourish quicker in a space that allows them to develop, free from the pressures of bureaucracy, surveillance, and excessive hierarchy. By being open to contesting ideas, testing theories, and learning from failures – the adaptive organization positions itself to be far more resilient in the face of future dramatic changes.

One of the core concerns that many business leaders have with the push towards increased agility, is how to scale it effectively. Arena suggests that the answer is deceptively simple. Entrepreneurial ideas need to be tested fast, either failing fast or being implemented fast. The ‘agile’ base has to first come from the very top of the organization and be a part of the company DNA. Then, with the right people on board, things can begin to expand and scale. As opposed to an organization that would rely primarily on human capital (which is essentially static), an adaptive organization relies a lot social capital. While both types of capital are essential to run an effective organization, many companies have tended to emphasize the former over the latter. The reason the social element is critical, is that that social capital effectively leverages the combined knowledge and skills contained by human capital. Social connections are therefore an accelerator that increases the velocity of existing ideas as they move throughout the company.

With sufficient social connections, Arena suggests that Adaptive Space then “works by facilitating connections to enable information flow for the discovery, development, diffusion, and disruption needed for organizations to innovate and adapt.” For the modern HR organization, one of the keys therefore is to find skilled individuals with these adaptive characteristics who can facilitate organizational agility and transformation. This is a first step towards becoming more adaptive, and a great place to start in order to positively disrupt an organizations’s operations.

For a more in-depth and measured analysis, I highly recommend checking out Michael’s book if you have not already done so!

[Download The First Chapter]


The author will be speaking at The CHRO Virtual Summit Reloaded, a one day HR Leadership extravaganza brought to you by the enthusiastic team behind the 3rd HR Congress Brussels, taking place on November 27-28.

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