Harnessing Adversity to Win in Uncertain Times

A working session rather than a talk, run by the creator of Adversity Quotient with commercial leaders from chemicals, biotech, medical products, IT distribution, and power generation. Participants other than the guest are described by role and industry, under the Chatham House Rule.

The short version

• AQ is a hardwired pattern of response to adversity, set in youth and stable for life — and, unlike most such patterns, it can be permanently rewired at any age.
• There are five ways people meet adversity: avoiding, surviving, coping, managing, harnessing. Asked how often their people harness it, most in the room said five percent or less.
• High-AQ people outperform, out-produce, set bigger goals, complete more of them, report better health, and take a third of the sick days.
• Asked to choose between the perfect résumé with a weak AQ and an exceptional AQ missing some pieces, 98% of half a million people surveyed took the AQ.
• Asked how many ordinary employees they would trade for one with exceptional AQ, the global average is 7.2. Among leaders it is 8.4.

The weather forecast

Stoltz opened with a conversation he had had twelve hours earlier with Harvard Business Review in China, where the framing was a move from a VUCA world — volatile, uncertain, chaotic — to a BANI one: brittle, anxious, nonlinear, incomprehensible. Then he asked the room to forecast their own market on five axes.

• Faster or slower?
• Easier or tougher?
• More predictable or more uncertain?
• More stress or less?
• More demanding or less?

He got there by a shorter route than most speakers take. Asked to name their single biggest challenge in one word, the room typed focus, execution, executive buy-in, communication, motivating people, time allocation, data availability, leading people to change. His point: your competitors’ list looks the same. Which makes the differentiator not the adversity but the response to it.

The adversity continuum

Five levels, measured across more than five million people in 137 countries. The question is not what someone does eventually — it is their first instinctive move the moment adversity strikes.

1. 1

   Avoiding

   Call in sick, say yes and mean no, leave the email unanswered, delay it, find a reason to be elsewhere. Organizations are inventive about this.

2. 2

   Surviving

   At the end of the day you are still here. Coming out the other side can be a miracle — and life still asks the same question immediately afterward: okay, now what?

3. 3

   Coping

   Keeping your head above water, physically, mentally, emotionally. It is the most common word in psychology when the subject is adversity — coping with aging, with loss, with pain — and it is the level most people live at.

4. 4

   Managing

   Taking a specific adversity and doing something with it. This is what executive education teaches, at MBA level and above, and it costs real energy, effort, and time.

5. 5

   Harnessing

   Something different in kind. You convert the adversity into fuel that propels you somewhere you would not have arrived at without it. Asked which companies had done this, the room named Apple, Netflix, Microsoft, Amazon, Spotify, and Tesla.

Stoltz told a story about the last of those. He was at a media event two months before Steve Jobs died, and a journalist shouted across the room asking what the biggest blessing of his life had been. Jobs answered without hesitation: adversity. Asked why, he said that without it his name would be unknown and Apple would not be Apple.

What moving up the continuum would do

Asked what would change in their businesses if their people responded a level or two higher, the room answered in its own terms.

• Sales, productivity, effectiveness — and, less obviously, trust. What people judge is not how you show up when things are fine, but how you show up when something goes wrong.
• Better discussions, better outcomes, more innovation, and more inspiring conversations with employees.
• It begins at recruitment. The right people in the right place with the right competence and attitude matters more than the system around them.
• Effective leadership starts from expecting problems and training your people to take them head on rather than around.
• A shift in energy, ambition, and mindset — what one participant called a winning culture.

Stoltz set that against a number he was given the first time he taught at Harvard Business School. He put the success rate of transformations at around thirty percent; the dean corrected him to twenty. Four out of five fall short, despite the best consultants and the best minds an enterprise can assemble.

Where AQ came from

As an undergraduate he asked an adviser — a former special forces officer — how you know who wins. The reply was to ask it differently. He tried again: who fails and who prevails? He was told that would be his first research project. Forty years later he is still on it.

The search ran through twenty-seven scientific disciplines and 3,500+ peer-reviewed studies across 110 universities and 137 countries, and kept returning to one word: adversity. If there is such a thing as an IQ, he reasoned, there ought to be a way to measure how a person responds to difficulty — and, more usefully, to strengthen it. The first version was validated with the Educational Testing Service in Princeton, which found it more valid and reliable than the college entrance exams it was tested against. The instrument is now on its eleventh generation.

What AQ predicts

• Performance. In Stoltz’s data the gap between high and low AQ runs to 166% of sales volume in telecom, 88% or more in life insurance, and 250–320% in real estate.
• Productivity, capacity, and measurable energy.
• Health — gastrointestinal, musculoskeletal, cardiovascular, neurological — and, in the largest Harvard study of its kind, lifespan.
• Innovation. An award-winning study at Rensselaer found high-AQ entrepreneurs produce measurably more of it.
• Goals. High-AQ people set bigger ones and finish a higher percentage of them.
• Emotional well-being. More natural optimism, better reported luck and quality of life, and more happiness.
• Absence. Low-AQ people take triple the sick days and are ill twice as often.

The number of adversities people report facing in a day has moved too. When the research began asking roughly thirty-five years ago, and requiring people to write them down, the global average was three. The latest analysis puts it near thirty-six — and for the first time, women are reporting more than men.

The two questions that land hardest

Given a hiring choice between the candidate with perfect skills and a weak AQ and the one with an exceptional AQ missing some pieces, 98% of half a million people surveyed worldwide take the AQ. Then the follow-up: think of the grittiest person you have worked with, and say how many ordinary employees you would trade for one of them. The global average is 7.2, and among leaders 8.4.

Whether you can change it

• It is age-agnostic. Unlike language or music, there is no difference in the level of AQ improvement between people in their sixties and people in their twenties.
• Typical improvement through a full program runs 11–23%, enough to move someone well up the curve. Assessment plus video coaching alone has produced 3–12%.
• One specialty materials manufacturer raised average AQ by twenty percent and its global health, safety, and environment metrics by sixty-one percent, pre and post, inside six months.
• It sits underneath EQ rather than beside it. What matters is not how well someone reads a room when things are calm, but whether they can still do it in the moment of truth — which takes a sufficiently high AQ to reach.
• It runs the other way from attitude training. An authentically positive outlook tends to follow from how someone answers adversity, rather than being installed from the outside.

How it gets into an organization

Sometimes at the top and outward. More often it starts inside one function where the difference will show quickly — sales, commercial excellence, marketing — with a pre-assessment, equipping sessions, and a reassessment later run against the KPIs the business already tracks. Once the evidence exists it tends to spread on its own.

Asked how to introduce it to organizations already exhausted by change initiatives, Stoltz made the case that this one is different in kind: a higher AQ immunizes people against anxiety, depression, and pessimism, and changes the lens through which they see each subsequent change. It is less another initiative than the thing that determines how the others land.