5 Rules to Build an Adaptable Organization

In today’s world, change isn’t coming—it’s already here. Building an adaptable organization is no longer optional—it’s essential for survival. Rapid technological advancements, shifting markets, and evolving customer expectations put organizations under constant pressure to adapt. Yet, 70% of transformation initiatives fail. Why? Not because leaders lack vision but because organizations are often built for stability, not adaptability.

So, how do you create an organization that doesn’t just survive change but thrives in it?

Adaptive Capacity

The answer lies in adaptive capacity: the ability to sense, respond to, and capitalize on change. This starts with rethinking how your organization works—and these five simple rules provide the foundation.

The Problem: Why Adaptability Fails

Organizations face three fundamental gaps that prevent them from thriving in uncertain environments:

1. Misalignment: Teams lack clarity on what truly matters. Strategic goals are unclear, decisions are delayed, and priorities constantly shift.
2. Cultural Resistance: Employees feel disconnected, mid-level managers resist change, and teams operate in silos. Without trust and engagement, even the best strategies crumble.
3. Resource Inefficiency: Organizations spread resources too thin, trying to tackle too many priorities. This creates bottlenecks, wastes effort, and kills momentum.

These gaps lead to friction, frustration, and stagnation—leaving organizations vulnerable when disruption strikes.

The Solution: Five Simple Rules for an Adaptable Organization

The good news? Adaptability isn’t about having the right tools or methods—it’s about building the right systems. These five simple rules create clarity, empower teams, and build resilience, enabling your organization to thrive in uncertainty.

1. Define and Share Clear Intent

The Rule is to ensure that everyone in the organization understands what you’re trying to achieve, why it matters, and how they can contribute. “You don’t really need a strategy; you just need to be agile” is a common misconception in modern organizations. As Stephen Bungay highlights in his article “5 Myths About Strategy”, while agility is crucial, it must operate within a strategic framework. Without clear direction, agility risks becoming an aimless activity.

When intent is unclear, teams hesitate, duplicate efforts, or work at cross-purposes. Clear intent provides a shared compass for decision-making and aligns efforts across the organization.

Case Study: An Internet Bank’s Transformation

At a leading internet bank preparing for its launch, strategic misalignment was causing delays and errors across teams. The leadership team refocused efforts by defining three critical priorities: automating integrations, ensuring consistency across account types, and meeting regulatory requirements. This clarity allowed the bank to meet its regulatory deadline and establish a first-mover advantage.

How to Apply This Rule:

• Create a Strategic Alignment Map that connects organizational goals to team-level work.
• Hold weekly or monthly alignment sessions to reinforce clarity and keep priorities current.

Outcome: Teams act confidently, knowing their work contributes to the bigger picture.

2. Focus Resource Where It Matters Most

The Rule is to prioritize ruthlessly, concentrating time, energy, and resources on initiatives with the most significant strategic impact.

When everything is a priority, nothing gets done. Spreading resources too thin creates inefficiency and burnout. Instead, you can focus on fewer high-impact initiatives that drive results.

Real-World Example: Auto Processing Center

An automobile processing center had a 12-year backlog of improvement initiatives, validated by external consultants but without clear prioritization. By analyzing capability gaps and linking them to strategic importance, the leadership team identified the most critical initiatives to tackle first. This focus reduced inefficiencies and led to better financial and operational performance—without increasing costs.

How to Apply This Rule:

• Use a Prioritization Grid to evaluate initiatives based on strategic importance and execution feasibility.
• Pause or defer relatively low-impact projects to free capacity for high-value work.

Outcome: Faster progress, fewer delays, and a more energized, focused organization.

3. Build Flow, Not Friction

The Rule: Design systems that minimize bottlenecks and enable work to move smoothly across the organization.

Friction—whether from unclear workflows, unnecessary approvals, or outdated processes—slows progress and frustrates teams. Adaptable organizations build flow, ensuring work moves seamlessly from idea to value delivery. Stop Starting and Start Finishing is a principle that emphasizes the importance of focusing on completing tasks rather than starting new ones, reducing bottlenecks, and improving throughput.

Illustration: The Sugar Packet Analogy

In transformations across organizations, teams are often overwhelmed by too much work in progress. You can use a sugar packet analogy to illustrate this. Imagine working on three tasks (yellow, pink, and blue sugar packets) simultaneously—starting and stopping tasks when switching between colors constantly. This creates bottlenecks, delays, and frustration. Instead, focus on finishing one type of task at a time while balancing demand and capacity. In practice, throughput improves by 40% or more in almost every case.

How to Apply This Rule:

• Map workflows to identify bottlenecks and areas of inefficiency.
• Orchestrate the flow of work to optimize for throughput – not productivity
• Adjust the structure of teams and capacity to align with the work to be done

Outcome: Work flows faster, teams collaborate better, and customer value is delivered more efficiently.

4. Enable Decisions at the Right Level

The Rule: Empower teams to make decisions within clear boundaries, reducing reliance on top-down control.

Centralized decision-making slows responses and creates bottlenecks. Enabling decisions at the right level builds trust, speed, and accountability in your system. As David Marquet explains in this video, achieving this requires balancing control, competence, and clarity—empowering teams to act confidently while staying aligned with organizational goals.

Case Study: Scaling Through Delegation

A consulting firm scaled its operations 10x by transitioning from top-down control to intent-based delegation. Leaders focused on ensuring team competence and clarity of outcomes rather than micromanaging activities. This shift increased speed and efficiency, reduced burnout, and created a more empowered workforce.

How to Apply This Rule:

• Create a Decision Rights Matrix to clarify who owns which decisions.
• Train mid-level managers to think systemically and align decisions with strategic goals.

Outcome: Decisions are made faster, with less friction and greater alignment.

5. Sense and Steer Continuously

The Rule is to build feedback loops into your systems to learn what works and what doesn’t in real-time.

Adaptability isn’t a one-time achievement; it’s a continuous process. By embedding feedback loops, you create a self-revealing system that constantly surfaces insights and opportunities for improvement.

Real-World Example: Pivoting During COVID-19

When COVID-19 hit, a consulting firm had to pivot from in-person to remote delivery overnight. Thanks to systems designed for sensing and steering, the organization quickly adapted its workflows and communication models. Not only did it maintain client relationships, but it also experienced growth during the first year of the pandemic.

How to Apply This Rule:

• Use regular retrospectives to evaluate progress and refine execution.
• Pilot small experiments to learn quickly before scaling solutions across the organization.

Outcome: Your organization becomes a learning engine, constantly improving and adapting to change.

Why These Rules Work to Build an Adaptable Organization

The Five Simple Rules aren’t about rigid playbooks but creating systems that foster clarity, focus, and adaptability. By applying these principles to craft an adaptable organization, you’ll:

• Align your teams around a shared purpose.
• Empower your people to act with confidence.
• Build a resilient organization that thrives in uncertainty.

Get Started Today

Building an adaptable organization doesn’t happen overnight—it’s a journey of leader-led continuous improvement. Organizational drift toward inefficiency, misalignment, or reactive behaviors occurs naturally. As a leader, your job is to counteract that drift by regularly assessing and elevating the key elements that drive adaptability.

Choose the area where gaps are most apparent. Your organization may need greater clarity, sharper focus, smoother workflows, empowered decision-making, or better feedback loops. Work with your leaders to craft a targeted action to improve. Over time, these rules build on each other, creating a system that becomes stronger, more adaptable, and more resilient with every step.

Intentional leadership is the key. By consistently identifying opportunities for improvement and addressing them, you can foster a culture of adaptability that thrives in complexity. Start today and see the impact unfold.

Remember: Adaptability isn’t about predicting the future. It’s about being ready for whatever comes next. With these Five Simple Rules, your organization will be prepared to survive change and thrive in it.