Uncertainty requires organisations that can respond to new challenges. Adaptive leadership can help create a culture of learning while giving employees the confidence they need to embrace change.

In a business environment defined by constant change, an organisation’s ability to adapt is no longer simply an advantage. It has become a necessity.

Companies whose leaders encourage continuous learning and give employees the confidence to respond to unfamiliar situations are more likely to adapt successfully and sustain their performance over time.

Research by IESE professor Nuria Chinchilla and her co-authors, published in Current Psychology, points to three closely connected elements that can help organisations become more innovative: a learning-oriented organisation, adaptive leadership and employees who believe in their own ability to deal with change.

Learning organisations as engines of change

A learning-oriented organisation creates an environment in which information and knowledge can circulate freely.

Effective communication, the exchange of ideas and regular feedback allow employees to question established practices and explore new approaches. In such an environment, people become more confident about their ability to contribute to change.

That confidence matters because innovation rarely happens when employees simply follow existing procedures. People need to feel that they have both the knowledge and the freedom to think differently.

Learning therefore does more than improve individual skills. It can create the conditions in which innovation becomes part of the organisation’s culture.

Do your employees believe they can innovate?

An important factor is employees’ confidence in their own ability to cope with transformation.

The researchers describe this confidence as a bridge between organisational learning and innovation.

When employees believe they are capable of handling change, they are more likely to behave creatively and proactively. They become more willing to experiment, propose solutions and participate in the implementation of new ideas.

But this confidence does not simply appear by itself.

Organisations have to cultivate it through continuous learning, constructive feedback and support from leaders who understand how people respond to uncertainty.

The role of the adaptive leader

This is where adaptive leadership becomes particularly important.

An adaptive leader does more than issue instructions or define targets. Such leaders seek to inspire employees through motivation, encouragement and personal support.

They provide stability when circumstances are uncertain or ambiguous, while at the same time encouraging employees to consider unfamiliar ideas and new ways of working.

By creating an environment in which people feel supported rather than threatened by change, leaders can strengthen employees’ confidence in their own ability to make difficult decisions.

This combination of support and encouragement makes adaptive leadership an important component of successful organisational change.

Five ways to prepare an organisation for change

The research suggests several practical measures organisations can take.

First, encourage learning and debate. Employees should have opportunities to discuss ideas, exchange knowledge and challenge assumptions.

Second, organisations can consider employees’ self-confidence in situations of change during recruitment and selection. Technical ability alone does not determine how effectively someone will respond when familiar circumstances disappear.

Third, companies can provide seminars and training programmes that help employees understand the importance of believing in their own ability to change. Guidance and support can strengthen this confidence.

Fourth, organisations should not assume that adaptive leadership comes naturally. Leadership development should take place at every management level, helping managers learn how to guide teams through uncertainty.

Finally, leaders can make greater use of motivation, encouragement and recognition. Recognising achievements can strengthen a team’s confidence and make employees more willing to accept difficult new challenges.

Leadership creates the conditions for change

The central lesson is that organisational adaptability cannot be produced by management decree alone.

Innovation depends on people being willing to learn, experiment and make decisions under uncertain conditions. For that to happen, employees need both knowledge and confidence.

Leadership connects these elements.

An adaptive leader creates an environment in which learning is encouraged, employees feel supported and uncertainty is treated as something that can be managed rather than feared.

In organisations facing continuous technological, economic and social change, the ability to create that environment may become one of leadership’s most valuable capabilities.

Source: Based on “¿Quieres una empresa con capacidad de cambio? Apuesta por un liderazgo adaptativo”, published by IESE Business School on 4 February 2025, reporting research by Nuria Chinchilla and co-authors published in Current Psychology. The study surveyed 373 permanent employees in the pharmaceutical industry in Islamabad and Karachi, Pakistan.