Making Your Culture Adaptive: A Key to Innovation and Growth

Across industries and geographies, senior leaders are facing a difficult paradox. They must deliver efficiency and predictability in the near term while simultaneously creating the conditions for innovation, experimentation, and new growth. The tension is real: cultures built solely on operational excellence often struggle to make space for exploratory thinking, intelligent risk-taking, and the accelerated learning cycles that disruptive markets demand. 

Research has shown that organizations with high cultural adaptivity outperform during periods of uncertainty. Yet for many company leaders, cultivating adaptivity can feel unclear or even at odds with expectations. They describe being pulled between two competing forces: the discipline of “make your numbers” on one side, and the urgent need to explore new avenues for growth on the other. 

This article draws on our extensive client work, as well as interviews with CEOs and senior People & Culture and Innovation & Technology executives across sectors in major Finland-based companies—most of which also operate globally. Together, these perspectives reveal what it really takes to build adaptive cultures—and why some efforts succeed while others stall. 

In our work with clients and in conversations with leaders, one theme is unmistakably clear: adaptive culture is a system, not a slogan. Organizations don’t become adaptive by declaring new ambition; they do it by aligning intent, behaviors, and mechanisms consistently.  

• This shift requires reinforcement across multiple layers: 
• Leadership backing, clear guardrails and role modeling 
• Talent with high ambiguity tolerance and growth mindset 
• Processes and organizational structures that enable seamless collaboration 
• Decision rights transparency 
• Daily habits that reward experimentation and learning velocity 
• Alignment between people, leadership approach, processes, and habits

Some organizations embrace dual-track innovation models—combining breakthrough bets in dedicated innovation units with everyday innovation in business units. That approach offers clear benefits, creating clarity and intentional resourcing. At the same time, there’s a great opportunity to amplify impact by shifting the cultural baseline and enable true adaptivity across the entire organization.  

Ultimately, cultural change requires inner work. Leaders recognize they set the tone from the top—and that adaptivity stalls when their own mental blocks lead to hesitation to experiment, take personal risks and openly learn from adversities. 

Addressing these mental blocks is the starting point, and sustaining change requires clarity on the specific behaviors that define adaptive cultures—and the mechanisms that support them. 

In adaptive cultures, three behaviors consistently differentiate organizations that adapt quickly and innovate at pace: experimenting with ideas, moving fast, and taking risks. These are grounded on the Egon Zehnder’s Culture Profile model, developed in collaboration with Professor Charles O’Reilly. Below, we break down what helps—and what hinders—each behavior.

• Behavior 1. Experimenting with ideas: Creating safe, structured spaces for testing and learning. 
• Behavior 2. Moving fast: Embedding urgency through cadence and clarity. 
• Behavior 3. Taking risks: Reframing failure as input and rewarding intelligent bets.

Creating safe, structured spaces for testing and learning across the organization.  

In adaptive cultures, experimentation is a disciplined, repeatable practice—not an ad hoc activity. 

What Works 

• Hackathons and sprints with an explicit “this is an experiment” framing 
• Low-threshold channels for idea submission, protecting emerging concepts long enough to sharpen them 
• “Boxing” the playing field: bounding ideas by time horizon and adjacency to the core business to increase relevance and reduce noise 

What Gets in the Way 

• Cognitive overload during reorganizations and other changes 
• Lack of clear criteria for selecting “novel and feasible” ideas 
• Cost anxiety triggered by words such as “innovation”  

Embedding urgency through cadence and clarity. 

Adaptive organizations treat speed as a function of clarity—not pressure. 

What Works 

• Quarterly goals and visible sprint plans that pull decision-making forward  
• Role-based decision rights keep committees out of routine calls  
• Cultural permission for “good enough” (80/20) that breaks perfectionism 
• Sponsorship from C-Suite leaders to avoid overly lengthy gate processes with no clear ownership 

What Gets in the Way 

• Escalation reflex combined with complex decision-making matrix. 
• Lack of empowerment in different parts of the organization. 

Reframing failure as input and rewarding intelligent bets. 

In adaptive cultures, risks are bounded, intentional, and connected to learning—not heroism. 

What Works 

• Clear boundaries: protect the core and pick fewer, and better, bets 
• Create slack in capacity planning and reward learning to make room for pilots 
• Entrepreneurial incentives for leaders including substantial upside mechanisms 

What Gets in the Way 

• Tight markets that compress risk appetite 
• Annual KPIs that push managers toward safe choices 
• No slack resources, leaving no room for pilots alongside Business As Usual (BAU)

Building an adaptive culture is a discipline. Our advisory work, the Culture Profile model, widely used at Egon Zehnder, and conversations with senior leaders all point to a key conclusion: adaptivity emerges when mindset, structures and behaviors reinforce one another. 

Leaders play the decisive role. They set the tone by experimenting visibly, making learning safe, and rewarding intelligent risk-taking. They create the conditions for speed by clarifying decision rights, funding small bets, and balancing short- and long-term signals. 

Organizations that excel in the years ahead won’t be the ones that simply optimize. They will be the ones that learn quickly, test boldly, and move with clarity. 

1. Model error empathy from the top — normalize intelligent failures and role-model growth mindset personally. 
2. Hire for courage and fresh thinking — bring in people who dare to take risks and encourage internal rotations to spark new ideas. 
3. Explain decision rights — clear and visible. 
4. Create safe-to-fail funding lanes — reserve time and budget for pilots. 
5. Push back on short-termism — challenge investors and boards to embrace higher ambition levels for the long term, including re-adjusting incentive systems accordingly. 
6. Reframe the narrative and show the way — create a bridge over market cycles, leading with adaptivity as an engine of long-term success and growth.