The key to adaptability: unlocking the organization’s tacit knowledge

By Hubert Saint-Onge

Adaptability is often treated as a matter of speed: faster decisions, shorter planning cycles, more agile structures, and quicker deployment of technology. These capabilities matter, but they do not reach the deepest source of either adaptation or resistance. An organization does not respond to events directly. It responds to what its members collectively believe those events mean. Between a changing environment and an organizational response lies its tacit knowledge, an interpretive system made up of assumptions, mindsets, principles, values, and fundamental beliefs. In stable conditions, that system creates coherence and efficiency. In turbulence, it can become a prison.

The central proposition of this article is that sustained adaptability and organizational renewal are possible only when this deep interpretive structure is made visible, examined, and deliberately renewed. New strategies grafted onto old assumptions rarely transform an organization. They are absorbed, translated, and eventually neutralized by the very beliefs that made renewal necessary. The practical challenge is therefore not simply to persuade people to accept change. It is to create the conditions in which an organization can reconsider the logic by which it knows, chooses, and acts.

When Protection Becomes Maladaptation

Biology offers a useful, though necessarily careful, analogy. Animals possess defensive responses that evolved because they protected life in recurring conditions of danger. Freezing, fleeing, fighting, vigilance, avoidance, and stress activation can all be effective when the threat resembles the conditions in which those responses developed. Yet a response that was adaptive in one setting may become costly in another. Research on behavioural flexibility emphasizes that animals entering novel environments must explore unfamiliar spaces, test new resources, and revise behaviour amid uncertain risks. Survival depends not merely on possessing a defence, but on varying and recalibrating responses as conditions change. Populations with greater behavioural and physiological variation may consequently be better able to persist under environmental disruption.

The essential lesson is not that defence mechanisms always impede adaptation. Immediate defence can be indispensable. The danger arises when a once-useful response becomes rigid, automatic, and insensitive to new evidence. Protection then narrows attention, reduces exploration, and favours familiar action precisely when unfamiliar action is required. What preserves an organism in the short term may reduce its capacity to adjust over the long term.

Organizations display an analogous pattern. Their defences are not claws or camouflage; they are routines of interpretation and protection. Under threat, leaders centralize decisions, narrow priorities, suppress dissent, demand certainty, reward compliance, and intensify the methods that previously produced success. Teams avoid embarrassing information. Bad news is softened as it travels upward. Established categories are defended because identity, status, and competence are tied to them. These reactions can create a reassuring appearance of control, but they also diminish the variety of perspectives and experiments from which adaptation emerges.

The Invisible Operating System

Every organization has an invisible operating system. It answers questions that are seldom asked explicitly: What counts as credible knowledge? Who is entitled to speak? Is uncertainty a sign of weakness or an invitation to inquiry? Are customers partners in learning or targets to be managed? Is efficiency the supreme value? Is failure evidence of incompetence or information about a hypothesis? These assumptions shape attention before a formal decision is ever made. They determine what data are noticed, whose interpretation is trusted, which risks are discussable, and what alternatives are dismissed as unrealistic.

This deep structure can be understood in four related layers. Assumptions are taken-for-granted propositions about how the world works. Mindsets are recurring frames through which situations are perceived and interpreted. Principles are the standards used to guide choices when interests compete. Fundamental beliefs concern identity and purpose: who we are, what we owe others, and what must never be compromised. Together they form the organization’s tacit knowledge—its largely unspoken way of making reality intelligible.

Tacit knowledge is indispensable. Without it, every action would require exhaustive debate. Shared assumptions allow people to coordinate rapidly, interpret incomplete information, and act without continually reconstructing the organization’s world. The problem is not that organizations have a tacit operating system; they could not function without one. The problem is that success makes this system increasingly invisible. Repeated victories turn hypotheses into certainties. Practices become principles. Explanations harden into truths. Eventually, the organization no longer experiences its worldview as a choice. It experiences it as reality.

Turbulence exposes the resulting gap. Markets, technologies, institutions, and stakeholder expectations change faster than the assumptions used to interpret them. The organization may receive abundant information yet still fail to learn, because new signals are filtered through old categories. It becomes possible to know more while understanding less. The decisive constraint is no longer access to data but the capacity to revise the meaning assigned to data.

How Organizational Defences Block Learning

Organizational defences arise because genuine learning carries psychological and political costs. To question an assumption may also question a leader’s judgment, a profession’s expertise, a unit’s status, or the story by which the organization understands its past. The more fundamental the belief, the more threatening its examination can feel. Defensive routines therefore protect people from embarrassment, uncertainty, and loss. Yet, as the organizational learning tradition has shown, the same routines that reduce immediate discomfort can prevent people from discovering and correcting the causes of threat.

Several patterns recur. Organizations declare that candour is valued while penalizing those who challenge senior assumptions. They run consultations whose boundaries have already been fixed. They describe failures as execution problems rather than reconsidering the governing theory. They add innovation units while preserving budgeting, incentives, and approval processes built for predictability. They celebrate agility but demand forecasts that eliminate uncertainty. In each case, the espoused commitment to renewal is contradicted by a theory-in-use organized around protection and control.

These defences also produce a rigidity cycle. An external shock creates anxiety. Anxiety prompts tighter control and a search for certainty. Tighter control reduces dissent, experimentation, and peripheral sensing. The resulting loss of information leads to poorer decisions and delayed responses. Performance deteriorates, which intensifies anxiety and justifies still more control. What looks like discipline from inside the cycle appears as growing blindness from outside it.

Structural redesign alone cannot break this cycle. A new matrix, digital platform, innovation process, or strategy may alter visible arrangements while leaving the interpretive logic intact. If leaders continue to equate control with competence, certainty with credibility, and dissent with disloyalty, the new structure will reproduce the old behaviour. This is why so many transformations change vocabulary without changing experience. The deepest continuity lies beneath the formal design.

Giving new meaning to tacit knowledge

Organizational renewal begins when what has been tacit can become discussable. This is more demanding than communicating a new vision. Communication usually carries meaning from leaders to the organization. Renewal requires the organization to participate in creating meaning: naming assumptions, comparing interpretations, testing beliefs against evidence, and deciding which principles should endure. The aim is not to discard everything inherited. It is to distinguish enduring purpose from historically contingent practice. It’s about drawing distinctions between what remains true and what no longer provides effective guidance. 

The distinction matters. An organization may need to preserve a fundamental commitment to safety while revising the assumption that safety requires centralized authority. It may sustain a principle of stewardship while abandoning a business model that no longer serves it. It may retain its purpose while changing the identity through which that purpose has been expressed. Adaptability is therefore not rootlessness. It is the ability to renew the means, meanings, and self-understandings of the organization without losing the principles worthy of continuity.

Learning as the generative engine

This process requires double-loop learning. Single-loop learning asks whether action is producing the intended result and judiciously adjusts the action. Double-loop learning asks whether the goals, assumptions, principles and governing values behind the action remain valid. In times of unrelenting volatility, both loops are necessary. Organizations must improve execution, but they must also reconsider what they are executing, why it matters, and what view of reality it assumes.

Double-loop learning is a lot harder than making adjustments within the current “thinking” framework. It questions the foundational thinking shaping decisions and initiatives. 

A Practical Discipline for Unlocking Adaptability

1. Surface the governing assumptions

Instead of starting with more abstract questions, it is best to start by examining consequential decisions. What had to be true for this decision to make sense? What did we assume about customers, employees, competitors, technology, risk, and time? Whose knowledge counted, and whose did not? Reconstructing the logic behind actual choices reveals the organization’s theory-in-use more reliably.

2. Make having different points of view safe and useful

The idea is to have constructive discussions where people recognize the reality gaps created by continuous volatility and turbulence. When challenge is met with curiosity rather than retaliation, the organization learns that truth has greater status than face-saving. Meetings should deal skillfully with both advocacy and inquiry, invite dissent before consensus forms, and senior leaders should identify which assumptions would cause them to change their minds. It is through open discussions that people see differences, see how other well-meaning colleagues think, and start questioning their own. In the end, an effective discussion will create a newfound consensus. 

3. Increase interpretive variety

Adaptation is strengthened when organizations can generate multiple interpretations of the same signal. Include people at the edges of the system, where anomalies are usually encountered first. Bring customers, partners, technical specialists, and front-line employees into sense-making rather than using them only as sources of data. The purpose is not diversity for its own sake; it is to prevent one perspective from monopolizing reality. A clearer picture will emerge when bringing together both internal and external stakeholders. 

4. Turn beliefs into testable hypotheses

Once assumptions are clearly articulated, frame them as propositions that can be tested. Instead of asserting, “Our customers will never accept this,” ask what evidence would confirm or disconfirm the belief and design a bounded experiment. Small, reversible tests reduce the identity threat associated with being wrong. They replace debate over certainty with disciplined learning.

5. Align systems with the renewed principles

Reflection without organizational change eventually becomes idle talk. If inquiry is valued, performance reviews must reward learning as well as delivery. If local adaptation is desired, decision rights and resources must move closer to changing conditions. If collaboration is a principle, incentives must not reward unit optimization at the expense of the whole. Renewal becomes durable when structure, governance, metrics, and resource allocation embody the new operating assumptions.

6. Establish a recurring renewal rhythm

Assumption renewal cannot be reserved for crises or strategic retreats. Build a regular cadence around questions such as: What surprised us? Which belief is showing holes? What are we defending that no longer serves our purpose? Where is behaviour contradicting our stated principles? What must remain stable, and what must become negotiable? Over time, the capacity for collective reflection turns into an organizational capability rather than a one-time intervention.

Leadership as Stewardship of Adaptability

From this vantage point, leadership is less the possession of answers than the stewardship of the conditions under which better answers can emerge. Leaders have to apply balanced wisdom to hold the tension between continuity and renewal. They protect purpose while exposing assumptions. They create enough stability for people to examine what is unstable. They regulate the emotional temperature so that threat does not collapse inquiry into defence. Above all, they model the willingness to discover that their own success formula has become incomplete.

Calmness is crucial here, but calmness must not be confused with a lack of engagement or inaction. A calm leader helps the organization face reality without triggering panic or premature closure. Such a leader can say, “We do not yet know,” without surrendering responsibility; can invite challenge without losing authority; and can distinguish between a threat to an idea and a threat to the organization. This stance interrupts defensive escalation and preserves the cognitive space required for learning.

Renewal also requires moral clarity. Not every principle should be made fluid in the name of adaptability. Organizations need anchors—commitments concerning dignity, responsibility, safety, integrity, and purpose—against which proposed changes can be judged. The task is to make these anchors explicit enough that practices can change without the organization opting for a lack of disciplined action. Paradoxically, the renewal of clear principles can increase adaptability because they reduce dependence on fixed procedures.

Conclusion: From Defence to Renewal

Volatility does not of itself make organizations adaptable. More often, it activates the very defences that restrict their capacity to perceive and respond. Like biological systems, organizations rely on protective responses that once made sense. A successful future depends on whether those responses remain flexible enough to be revised when the environment changes. The decisive capability is therefore not change management in the conventional sense. It is the capacity to bring the organization’s invisible operating system into collective view and allow it to be questioned in light of emerging new realities.

Adaptability begins when assumptions can be named without humiliation, mindsets can be examined without defensiveness, principles can be clarified without becoming dogma, and fundamental beliefs can be renewed without destroying identity. At that point, the organization is no longer merely reacting to turbulence. It is learning how to recreate its relationship with a fast-changing world.

Organizations renew themselves when they become able to question what success once taught them to take for granted. The idea is to reinforce coherence while engendering the strength that comes from calibrated flexibility.