What does a company do when there is a problem, but the solution is not very clear, a problem that could have many solutions, depending on the situation and attitudes of the people involved/affected? These problems are called “adaptive challenges”. One person with authority or expertise only cannot successfully address them. They require a carefully selected team and someone in the team to lead them. Too many companies have tried to address these adaptive challenges through directives from someone in authority (the person with the title) with no success because of the attitudes, habits, behavior, values, loyalties, hidden alliances and procedures within each front-line group. Asking questions like these help: How do these challenges affect the group? What outcome would be best for it? How much does the group care? What resources can the group control? I looked into this after seeing a lecture on this topic and prepared material on it. Have a look at this presentation. I hope it gives some ideas to handle these complicated challenges.

1. Source: THE PRACTICE OF ADAPTIVE LEADERSHIP, Ronald Heifetz, Alexander Grashow, Marty Linsky, HBR, 2009
1Ron McFarland, Tokyo, Japan

2. 2Ron McFarland, Tokyo, Japan

3. Without expertise, the boss alone
can not solve an adaptive
challenge.
3
Kind of challenge Problem definition
Technical with full
expertise available
Technical and
adaptive (full
expertise not
available to solve)
Adaptive
challenges with
no expertise
available
Clearly defined and
know what to do
Clearly defined and
know what to do
Requires learning
to identify and
clarify the problem
Requires learning
to find solution as
how to do it is
unknown
Final Solution
Clearly defined
and know how to
do it
Requires learning
in process to
solution as how to
do it is unknown
Authority or
specialist on
problem
Authority and
stakeholders
Central positions to
address challenge
All stakeholders
(with something
to gain or lose)
Ron McFarland, Tokyo, Japan

4. Customers Shareholders
Employees
Suppliers
Community near
organization
Local, national
and foreign governments
Other
creditors
Senior
lenders
Family
members
The organization
4Ron McFarland, Tokyo, Japan

5. Authority to act Desire to act
Authority’s limited influence
Some problems can only be
solved through discussion.
5
Formal authority
Informal authority,
expert on issue
Adaptive
leadership
What people unofficially expect of
you (or you expect of others) because
of your reputation, trustworthiness,
experience, skills, expertise, etc.
Adaptive leader facilitates decision-
making on issues that have no
specialist or expert that all people can
rely on.
What you officially can be asked and
to do (or can ask others to do)
Ron McFarland, Tokyo, Japan

6. Answer each question, using a scale from 1 to 7, where 1=strongly disagree;
4=neutral; and 7=strongly agree, and then total your digital capacity score.
Member name: Score
Formal authority: Has a position to influence a proposal to an adaptive
challenge.
Informal authority: Has high respect, skills and expertise among all
stakeholders and others surrounding the adaptive challenge. He can
unofficially influence opinions.
Stakeholder: Key group representatives or individuals participating in
resolving an adaptive challenge. They are directly influenced by it.
TOTAL SCORE
Scoring: Over 16: Has very strong influence over all the stakeholders in selecting which
is the best solution to the adaptive problem; 7-16 has some degree of influence among
the stakeholders but must ask a lot of questions, get more information to be influential;
less than 7: is in a weak position to influence the outcome but can play some role.
6
A person with a great deal of formal authority, but little informal
authority, may have the ability to stop a viable solution. But he has
little ability to address the adaptive challenge and execute on his own.
Ron McFarland, Tokyo, Japan

7. Adaptive challenge
with no clear
answer develops.
It is addressed by
all people involved.
The best solution is
achieved.
People become
authorities on that
problem.
The problem
becomes technical
problem at that
time.
Situation changes
and the known
technical solution is
not correct.
If the situation does not
change, the technical
solution is fine until
there is a change.
“Are we all in
agreement?”
This is how
organizations
develop skills.
7Ron McFarland, Tokyo, Japan

8. Adaptive
Challenge
Incentives
in the
company
Company
atmosphere
Official
procedures
in the
company
Fun incentives
Active
environment
Does the
organization
have the right
environment?
8
Procedures
Ron McFarland, Tokyo, Japan

9. Organizational
Behavior
Folklore
•What are
people
talking
about?
Rituals
•What
acceptable
habits are
there?
Group
norms
•How do
groups
behave?
Meeting
protocols
•What are the
procedures of
meetings?
“Our history is
having loyal
customers.”
“Please read the agenda.”
9Ron McFarland, Tokyo, Japan

10. Situation or
problem occurs
Common habitual
response and
reaction
Don’t think,
just do.
These automatic responses have to be
reviewed for any adaptive challenge
10Ron McFarland, Tokyo, Japan

11. Field decision,
doing experiments
Management
decision
11Ron McFarland, Tokyo, Japan

12. Standardized
for efficiency
Customize
for customer
12Ron McFarland, Tokyo, Japan

13. Notice what
he is not
saying?
He is avoiding
the main
problem again!
How easy is it to be open with difficult
problems in your organization?
13
1. Write down
what was said in
a meeting.
“The sales
people are not
selling enough.”
“We have to get
our sales people
more active.”
There are no new
products. It is
avoided?
2. Write down
your response to
what was said.
3. Last, explore
what you think
was not said.
His customers like him.
What was said What was thought
He doesn’t find new customers.
Exercises to explore openness
Ron McFarland, Tokyo, Japan

14. 14Ron McFarland, Tokyo, Japan

15. STAKE IN
THE
CHALLENGE
• How will it
affect them?
DESIRED
OUTCOME
• What
outcome is
best for
them?
LEVEL OF
ENGAGEMENT
• How much
does he
care?
INFLUENCE
• What
resources
does he
control?
All have interest
in the outcome
STAKEHOLDER
& CHALLENGE
What are your
stakeholders thinking?
15Ron McFarland, Tokyo, Japan

16. STAKE
HOLDER
CHARACTER
VALUES
•Commitments
& beliefs that
guide him
LOYALTIES
•Obligations
outside of
direct group
(customers
and suppliers)
LOSSES AT
RISK
•Fear of loss if
things change
HIDDEN
ALLIANCES
•Shared
interests with
others behind
the scenes
Different colors and strengths
What is important to
your stakeholders?
16Ron McFarland, Tokyo, Japan

17. Do you have the courage to
address these difficult problems?
17
Hiding something
Ron McFarland, Tokyo, Japan

18. No major discussion
on action-plan
required
Many conflicting
opinions on how to
solve issue
Can be individually
addressed by
specialist(s)
Must be
systematically
addressed by
stakeholders
Known
problem
Problem must
be determined
You must move from left to right (red to green) to handle
adaptive challenges as suitable experts are not available.
Discussion
required
18Ron McFarland, Tokyo, Japan

19. Adaption challenge:
Your proposed change initiative:
Stakeholder
(individual or group)
Relations to
the issue?
Preferred
outcome?
Strongest
values?
Loyalties?
Potential
losses?
Stakeholders with interest in the outcome
19
You must know all the
stakeholder groups
well and have a feeling
for their concerns.
Ron McFarland, Tokyo, Japan

20. General
Meeting
Adaptive
Problem
Participants representing their groups
Representative-constituents
meetings
Prep-meetings on what to
achieve (what to give up) must
be conducted before the
general meeting.
Avoid constituents getting
in the way of progress?
Get all moving
in the same direction
Constituencies represented
20Ron McFarland, Tokyo, Japan

21. Informal
discussion
before public
meeting
• Small group
meetings in
hallway
discussing the
issues to be
presented.
Public
discussion at
meeting
• The public
conversation of the
subject to be address.
General information
presented.
Internal
thinking during
meeting
•What each
person is actually
thinking about
while the meeting
is going on.
Informal
discussion after
public meeting
•Discussions about the
public meeting
afterwards. What really
happened and what was
not said in the meeting.
Are the feelings in
these meetings
about the same or
extremely different?
21
What will happen?
This is what is happening.
Is it really happening?
Do you believe what was said?
Ron McFarland, Tokyo, Japan

22. 20%
30%
50%
Attention and discussion time
Past
Present
Future
Can we stay on
the subject of
the future?
People will try to avoid the important and difficult subjects by spending
all the time reflecting on the past and uncontrollable current issues.
How productive are your
meetings and how much
time do you spend on
controllable issues?
22Ron McFarland, Tokyo, Japan

23. Adaptive
criteria Description Rating (1 means “very low”;
10 means “very high”)
Unsaid issues
How long does it take for conversations to get from inside
people’s heads to the coffee machine and then to meeting
rooms? How quickly are crises identified and bad news
discussed? Are there structures, incentives, and support for
speaking the unspeakable?
1 2 3 4 5 6 7 8 9 10
Shared
responsibility
To what extent do people in the organization, especially those in
senior management, act for the whole organization, as opposed
to protecting their individual group?
1 2 3 4 5 6 7 8 9 10
Independent
judgment
To what extent are people, in the organization, valued for their
own judgment rather than their capacity to determine the boss’s
preferences? When someone takes a reasonable risk in service
for the whole, and it doesn’t work our, to what extent is that
seen as a learning opportunity rather than a personal failure?
1 2 3 4 5 6 7 8 9 10
Develop
leadership
To what extent do people know where they stand in the
organization and their potential for growth? Do they have an
agreed-on plan for how they are going develop? To what extent
are senior managers expected to identify and mentor their
successors?
1 2 3 4 5 6 7 8 9 10
Continuous
learning
Does the organization create time for individual and collective
reflection and learning from experience? To what extent does
the organization allocate time and other resources to get diverse
perspectives on how work could be done better?
1 2 3 4 5 6 7 8 9 10
23Ron McFarland, Tokyo, Japan

24. The need to reassess organizational structure and project planning
is often overlooked. For new adaptive challenges that greatly
differ from the ongoing operation, this is a major error and the
chance of failure increases greatly.
Put adaptive
solution into
action
Strategy
Organization
and plan
Execute planStrategy
Organization,
discussions and
plan
Change to address adaptive challenge
Ongoing operation (current activities)
24Ron McFarland, Tokyo, Japan

25. 1. New organization chart
2. New business cards
3. Detailed job descriptions to address adaptive challenge
4. Physically separated location away from ongoing operation
5. Make a Gantt chart of activities, assignments and schedule
Organization,
discussions
and plan
Adaptive challenge project
Strategy
Put adaptive
solution into
action
Build
project team
like a start-
up company
25Ron McFarland, Tokyo, Japan

26. Improve an
operation
or
process
Operations
&
processing
Outbound
items &
services
Marketing
&
sales
After
sales
support
Inbound
items &
services
(Processing) (Shipping) (Service)(Receiving) (Marketing)
26Ron McFarland, Tokyo, Japan

27. Operations & processing
shared staff
Dedicated team
Operations
&
processing
Outbound
items &
services
Marketing
&
sales
After
sales
support
Inbound
items &
services
Adaptive Change
Project Team
The dedicated team could be from internal employee transfers or hired from
the outside, dependent on the skills, desires and talent required and who is
available in the company. Usually, the project members should be represented
by both. All should be stakeholders in what is achieved.
27Ron McFarland, Tokyo, Japan

28. Shared staff Dedicated team
Adaptive
Challenge
Project Team
Ongoing
business
leader
Adaptive
challenge
leader
Challenge #1
Competition
with ongoing
business for
scarce resources
Challenge #2
Divided time,
energy and
attention of
shared staff
Challenge #3
Disharmony in
partnership
28
To make the new organization productive there
are some problems that must be addressed.
Ron McFarland, Tokyo, Japan

29. Ongoing
business
leader
Adaptive
challenge
leader
Challenge #1
Competition with
ongoing business for
scarce resources
Conflict resolution
1. Make a formal, documented allocation of funds for the challenge.
2. Make a formal, documented allocation of shared personnel’s time.
3. Confirm a balance between short-term (mostly ongoing related) and long-
term (mostly adaptive challenge project) gains.
4. If the use of resources for challenge impacts in any way on ongoing
business, the adaptive challenge project budget should cover the losses.
5. Leaders should discuss all contingency plans in advance of concern.
The conflict
1. If the needs of the adaptive challenge project grows, the leader might have to
promote the priority of the project.
2. He might have to request a higher budget.
3. On the other hand, the ongoing business leader might promote his own
ongoing, core business to increase direct profits.
¥
29Ron McFarland, Tokyo, Japan

30. Shared staff
Challenge #2
Divided time, energy and
attention of shared staff
The resolution
1. The value of the adaptive challenge project must be understood and believed in by members in the
ongoing business operation. This concept should be repeatedly promoted at the top level, mid-
management level and operational level.
2. All senior executives should be adaptive challenge project advocates when there is stress in time,
energy and attention.
3. Furthermore, the adaptive challenge project leader must be flexible when the ongoing business
becomes overloaded, as they are the profit-center of the organization that funds all projects.
4. At the departmental level, the ongoing operation could charge the adaptive challenge project for
excess work provided.
5. A special bonus could be given to shared staff that work over a certain amount.
The concern
1. The shared staff may consider the adaptive challenge project a distraction to his work.
2. The shared staff might be under short-term time pressure.
3. The shared staff might not consider the adaptive challenge important.
4. The shared staff might have stronger loyalties and formal ties to the ongoing business operation.
5. The shared staff might feel the adaptive challenge project will damage the ongoing business
operation (weaken brand, customer/supplier loyalties – cannibalize current business).
30Ron McFarland, Tokyo, Japan

31. Shared staff Dedicated team
Project Team
Challenge #3
Disharmony in
partnership
The resolution
1. Make the division of responsibility as clear as possible.
2. Reinforce common values for both groups.
3. Add more internal staff (less outside hires) on the project team to support cooperation,
as they have established relationships.
4. Locate key staff near the dedicated team for face-to-face interaction.
The concern
1. The differences are important to gain value, but it could cause rivalry.
2. Common conflict can involve perceived skill level of individuals.
3. Conflict could result if management gives too much praise to one side (either ongoing
business or adaptive challenge project).
4. Conflict could results from differing opinions on performance assessments.
5. Conflict on compensation could occur.
6. Conflict on decision authority could occur.
31Ron McFarland, Tokyo, Japan

32. Comfortlevelswhendiscussing
anuncomfortabletopic
Low
High
Time
Technical problem comfortably solved
by specialist in short period of time
Work avoidance by ignoring
the adaptive problem and
the problem remains
Adaptive challenge addressed,
possible solutions introduced
and action plan executed to
bring down discomfort
Uncomfortable, indecisive,
probing, exploring and discussing
zone….. the productivity zone.
Best
solution
decided
32
Technical problem with expertise available
Adaptive problem
Stress level too low and not addressing
the problem anymore.
The group must be stimulated.
Stress level too high leading to fighting
and attaching….not productive stress
level.
The group must be calmed down.
Ron McFarland, Tokyo, Japan

33. Discomfort
levels
Low
High
Time
INCREASING HEAT WHEN TOO LOW
•Draw attention to the tough questions
•Give people more responsibility by asking direct questions
•Bring conflict to surface
•Highlight avoiding responsibility,
•Highlight people blaming others
•Highlight people giving quick fix measures that will fail
DECREASING HEAT WHEN TOO HIGH
•Address easy problems first to get successes
•Explain every concern in a positive way
•Ask members to explain their counterpart’s concern
•Break down problem into easy tasks
•Postpone tough questions temporarily
•Slow down opinions and ask for confirmed data
•Provide breaks, tell joke, tell story or do physical
exercise to cool down the group Stress level too high
Stress level
too low
Cool
down
Heat
up
Stress too high
Most productive stress level
Stress level too low
In no way is
this easy, but
it must be
done to keep
things moving
forward.
33Ron McFarland, Tokyo, Japan

34. 34
In an urgent environment: “Here is what I
think is the solution. What do you think?”
In a non-urgent environment: “I would like
run an experiment and learn from it. Here
it is. What do you think?”
In an urgent situation, it is best to present
the change suggestion as the solution that
might require modification. Announcing it
as an experiment weakens a leader’s
clarity.
In a non-urgent situation, present the
change suggestion as an experiment for
learning and developing.
To make changes that address new,
challenging adaptive challenges, a
great deal of trial-and-error
experimenting is required. This leads
to learning and the best solution.
Ron McFarland, Tokyo, Japan

35. Task #1
Activity #1
Activity #2
Task #2
Activity #1
Activity #2
Task #3
Task #4
Activity #1
Activity #2
Activity #1
Activity #2
Adaptive
Challenge
Solution
(all agree)
Generally, the overall adaptive challenge is easy to decide on. The task and
activities become more difficult and discussion and agreement are required.
35Ron McFarland, Tokyo, Japan

36. Give suggestion and
ask for concerns
First,
modification
requested
Based on first
modification request
new suggestion
offered
Armed with previous
suggestions, new
modification
requested
Agreement on
what to do is
achieved
First suggestion for
action plan given
(budget, timing,
assignments)
Keep the discussion going
Note: The best group size is four to nine people with each fully representing sub-groups.
The best
ideas usually
come after
several
modifications
.
36
But sometimes you
must be very
patient to wait for
these suggestions
to be thought of.
Ron McFarland, Tokyo, Japan

37. Adaption challenge and suggested solution:
Who might be
your allies?
Why might
they be allies?
What is their main objective? (Support
you, the initiative itself or the
organization?
How can this ally best help you
successfully implement your
proposal?
1-Allies: Those
who will support
you outwardly
Supporters
37Ron McFarland, Tokyo, Japan

38. Adaption challenge and suggested solution:
Who might be
your opponents?
Why might they be
opponents? What do
they want to achieve?
What do they stand to lose
if your initiative succeeds?
How might you neutralize their
opposition or get them on your side?
2 – Opponents:
Those who will
fight your proposal Competitors
38Ron McFarland, Tokyo, Japan

39. Adaption challenge and suggested solution:
Who, with influence, are
most important to your
proposal’s success?
Why are they
important?
What signals are they giving
about how the organization
perceives your proposal?
What might you say or do to
secure their support during
proposal implementation?
3 – Influencers:
Those who can
influence others
Authorities with influence
39Ron McFarland, Tokyo, Japan

40. Adaption challenge and suggested solution:
Who will be
casualties of your
proposal?
What will
they lose?
What new skills would help them
survive the change and thrive
with your proposal?
Which casualties
will need to leave
the organization?
How could you
help them
elsewhere?
4 – Casualties:
Those that stand
to lose something
Those taking loses
40Ron McFarland, Tokyo, Japan

41. Adaption challenge and suggested solution:
Who will voice radical,
unmentionable,
undoable proposals?
What ideas are they bringing
forth that might be valuable
for your proposal?
How might you enable
their ideas to at least
have a hearing?
How can you protect them
from being marginalized or
silenced?
5 – Dissenters:
Those that offer
differing opinions
Different perspectives
41Ron McFarland, Tokyo, Japan

42. 42
Front line discussions
& representation
Regional discussions
& representation
National discussions
& representation
Global discussions
& representation
All discussion participants
will be directly influenced by
the decision, particularly at
the front line members.
The best group size is four to
nine people with each fully
representing sub-groups.
Front line
representative
Regional
representative
National
representative
Global
representative
Ron McFarland, Tokyo, Japan

43. Exploring, experimenting
discussing, and discovery
Exploring, experimenting
discussing, and discovery
Exploring, experimenting
discussing, and discovery
Exploring, experimenting
discussing, and discovery Exploring,
experimenting
discussing, and
discovery
Exploring, experimenting
discussing, and discovery
Issue #1
Issue #2
Issue #3
Issue #4
Issue #5
Final Issue
43Ron McFarland, Tokyo, Japan

44. It can be done if you have the
desire to address the issues?
44Ron McFarland, Tokyo, Japan

45. Source: THE PRACTICE OF ADAPTIVE LEADERSHIP, Ronald Heifetz, Alexander Grashow, Marty Linsky, HBR, 2009
Reaching agreement and putting
in a successful action-plan
45Ron McFarland, Tokyo, Japan