What today's high-performing leaders do differently

For years, organisations have relied on the intelligence quotient (IQ) to measure cognitive ability and the emotional quotient (EQ) to assess interpersonal skills. Now, another measure is gaining attention: the adaptability quotient (AQ).

While it has not replaced traditional metrics, its significance is increasing as workplaces manage automation, globalisation and regulatory shifts. The World Economic Forum’s Future of Jobs Report 2025 highlights this trend.

Analytical thinking remains the most in-demand skill, with 70 per cent of employers listing it as essential, but closely following are resilience, flexibility and agility — all core elements of AQ.

According to organisational psychologist Kathryn McEwen, founder of Working with Resilience, AQ is gaining attention because the pace and complexity of change today are unprecedented.
“20 years ago, we would say ‘change is the only constant’, but now it is exponential and has been amplified by technology, AI and shifting ways of working,” she says.

“People are realising that what got them to their current level of success will not necessarily take them to the next stage. Adaptability has become a critical capability, enabling professionals to evolve and thrive in a very different work environment.”

So what distinguishes highly adaptable professionals from their colleagues, and how can people sharpen their judgement and skills to thrive amid constant change?

More than flexibility

Understanding AQ requires looking beyond flexibility, says Professor Catherine Althaus, founding director of the UNSW Academy of Adaptive Leadership. It is about developing the skills, mindset and resilience to meet the challenges we face.

“All too often people just reduce AQ to having a flexible mindset,” she says. “But, in practice it is much more. AQ is about confidently navigating complexity, combining curiosity with calm under pressure, being open to other people’s ideas and continuing to perform when challenges arise.”

On an organisational scale, Althaus describes it as “disappointing people at a rate they can tolerate”.

“Leaders driving change — whether that is restructuring, digitalisation, shifting strategy or lifting performance — are inevitably asking people to give something up,” she says. “Engaging in this work requires the ability to step with confidence into areas where you are going to be facing loss or inflicting loss on others.”

Why it matters

Finance professionals are often celebrated for their precision, analytical rigour and mastery of rule-based processes. These are invaluable skills when tackling challenges with known solutions, clear methodologies and predictable outcomes. In contrast, Althaus says, adaptive problems are systemic, complex and often ambiguous.

“In adaptive challenges, we often do not even know what the problem is, let alone how to solve it,” she explains. “For technical problems, you issue a command, allocate resources and get it done. Adaptive challenges require a different approach.”

One example of an adaptive challenge is cultural transformation. “You cannot just make an organisation’s culture better overnight. It is systemic, uncontrollable and complex — a true adaptive challenge where leadership matters and everyone is involved.”

AQ is about figuring out “what to do when we do not know what to do”. For finance professionals, this means leveraging analytical skills to diagnose complex, systemic challenges that resist straightforward solutions.

“Accountants have a crucial role to play in helping the system recognise what’s working well and what may need attention,” Althaus says.

Fostering AQ

Cultivating AQ starts with the individual, advises McEwen. She suggests beginning by understanding risk tolerance and fixed thinking patterns, such as denial or blame.

“The first step is recognising these patterns in yourself and moving toward flexible thinking, seeing the world in shades of grey instead of black and white. Developing adaptability is about becoming aware of these tendencies and consciously choosing to approach situations with curiosity and flexibility,” she says.

Creating an environment that fosters AQ requires several key factors.

First, psychological safety is essential. Employees must feel safe to take risks and experiment.

Second, organisations must create an environment with enough discomfort to stretch individuals and stimulate learning, but not so much that it overwhelms or disengages them, suggests Althaus.

“We call it the ‘productive zone of disequilibrium’,” she explains. “It is about creating just enough heat to engage and motivate people without overwhelming them. It is about reading yourself, your team and your organisation to find the ‘sweet spot’ where growth happens, then knowing when to cool things down.”

Third, structured reflection is vital. Setting aside deliberate time for debriefing, feedback and reflection ensures learning is embedded and informs future decisions.

“AQ absolutely shifts decision-making, but it also requires teams to create a reflective space with feedback loops to assess what worked and what did not. Rather than reacting immediately to every situation, this approach supports more thoughtful decision-making under pressure,” says McEwen.

The final factor is external awareness. Adaptable organisations maintain a strong external radar, encouraging teams to connect with professional networks, industry groups and peers.

“Ultimately, this is a group effort. We rely on each other to navigate these challenges effectively,” says Althaus. “Everyone is part of both the problem and the solution, which is both a comfort and a challenge.”