Adaptability is increasingly becoming a business imperative as organizations face ongoing disruption tied to economic uncertainty, geopolitical tensions, technological change and shifting market conditions. That’s the central message of a new report from KPMG, which found many organizations are still reacting to disruption rather than building the enterprise-wide adaptability needed to respond proactively.
The firm’s inaugural Adaptability Pulse Survey, based on responses from 1,120 executives, argues that companies face an “execution gap,” where leaders recognize the need for transformation but struggle to scale change across the organization.
According to the report, many organizations continue making incremental adjustments even as disruption becomes more constant and interconnected. KPMG found that broad, enterprise-wide initiatives are nearly three times more likely to achieve most or all intended outcomes than smaller-scale changes.
“Every leader agrees that adaptability is critical, yet most companies treat it as a side project,” Rob Fisher, Advisory Vice Chair, KPMG U.S., said. “The truth is, if adaptability isn’t wired to every function, it’s not a strategy. Real transformation requires building muscle for execution everywhere. It demands commitment all at once.”
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The report also found that many organizations remain stuck in reactive mode despite recognizing the need for change. Companies scored only +12.5 out of a possible +100 on “net proactivity,” a metric measuring whether organizations are anticipating disruption or primarily responding after challenges emerge.
KPMG said proactive strategies are nearly 1.5 times more likely to deliver strong results than reactive approaches. The gap becomes even more pronounced when measuring execution outcomes. Ninety-two percent of proactive initiatives fulfilled most or all intended outcomes, compared with 62% of reactive initiatives.
Organizations combining proactive leadership with coordinated execution also significantly outperformed peers during disruption, achieving 4.4 times higher shareholder returns and three times higher revenue growth, according to the report.
The survey identified three major challenges limiting organizational adaptability.
First, companies are keeping change efforts too small. KPMG found organizations often rely on isolated initiatives or department-level adjustments that fail to scale across the enterprise, limiting the impact of transformation efforts.
Second, organizations continue operating in “firefighting” mode rather than building proactive strategies designed to anticipate disruption before it escalates.
Third, companies may be underutilizing external partnerships. While 66% of leaders said ecosystems and partnerships are among the top ways to address disruption pressures, KPMG found many organizations lack the strategy and decision-making structures needed to develop high-impact collaborations.
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