Kevin Chin is an Entrepreneurs' Organization (EO) member in Brisbane, and founder and CEO of Arowana & Co, a specialist investor and operator in the emerging company sector that focuses on scaling enterprises. Kevin has experienced the importance of resilience in business success and shares his thoughts on this emerging topic.
Social scientists and psychologists are increasingly acknowledging that EQ (emotional intelligence) is just as if not more important than IQ (intelligence quotient, a measure of cognitive intelligence) as far as success in business and life is concerned. As a result, when I mention EQ and IQ, people generally know what I am talking about.
However, when I use the term AQ, almost no one understands the reference. AQ stands for adversity quotient, or simply put, resilience. And, I believe it is more important than EQ and IQ, especially in business.
In my experience starting five different businesses?and going on to scale, grow and sell them?I've come to realize that resilience is the key common denominator in terms of growth and successful outcomes.
It's been said that we're living in the best possible time to be an entrepreneur. When talking with fellow entrepreneurs, however, we are unanimous in agreement that collective enterprise resilience ?AQ?is the key determinant of success and winning in the business realm. This is not to say that EQ and IQ are unimportant; I consider them as necessary but insufficient requirements. Without AQ, the success of your team will be finite. So, how do you ensure your organization achieves the highest possible level of AQ? Here are some practical tips:
Recruitment. Emphasize AQ testing rather than just EQ and IQ testing. It can be difficult to test AQ, as seeing how people think and behave under pressure is not easy to simulate in an interview context. However, it is possible to screen a resume for "fair-weather employees" through past behaviors such as changing jobs frequently or leaving a previous role because the business was facing difficult circumstances. Such hires must be avoided at all costs, as these individuals tend to be easily discouraged when confronted with even minimal adversity and you'll risk infecting and weakening your team's overall morale and culture. Conversely, candidates who stuck out a job in dire circumstances even though the business subsequently closed warrant closer consideration. Often, such people exhibit greater depth and breadth of work experience because they have been the last person standing and have worn many hats. A further indication of AQ can be gleaned from early life experiences of candidates who faced adversity and overcame or dealt with it.
Rewards. Typical incentive structures reward contribution primarily on an attribution basis. The risk with overly simplistic models is that they may fail to reward someone demonstrating high AQ because their project may not yet be yielding results or achieving profit. It's important to adopt an incentive model that is sophisticated enough to acknowledge those working on difficult assignments, where they are contributing and delivering results, even when the fruits of their labor are yet to be fully realized.
Recognition. Members of the team who demonstrate the highest AQ and deliver results, all other things being equal, should become leaders of the organization. Often, these team members will be the ones who are also the most productive and get things done as they are less prone to distraction or dissuasion by adverse circumstances surrounding them.
Ultimately, winners are not those who never fail, but those who never quit. It's crucial to understand that a winning team will collectively exhibit high AQ, above all else.