Transformational Performance-Based Leadership: Addressing Non-Routine Adaptive Challenges

A leader’s job is to create contexts that will allow followers to adopt new perspectives on the challenges they face, and therefore, new actions that lead to higher levels of performance. The observations offered by this author will be extremely valuable to any leader hoping to achieve this important goal.


With the exponential increase in the complexity of global business, managers and leaders must remain adept at addressing both routine and non-routine challenges.

Modern management theory and practice have all but conquered what it takes to address routine challenges successfully. Unfortunately, the strategies and thinking that are so successful for meeting routine, well-defined challenges do not seem to have the same predictable success rate when applied to non-routine, adaptive challenges. Some interventions work some of the time, but not all of the time and certainly not across industries or in all situations. At best, we are left to the cumulative efforts of several interventions that, when applied together, produce some incremental improvement (for example, incentive systems, inspirational talks, new policies, reorganizations).

Most management interventions are transactional in nature – they assume a standard cause-effect relationship. For example, one might think if they put in the right incentive system, give the right inspirational talk, publish the right policy, add the new IT system, etc., the effect will be an increase in performance (Erhard, Jensen, Barbados Group, 2010). These transactional interventions generally do the job if we have steady performance and we experience some hiccup, or are looking at making an incremental improvement. In such cases, employing a transactional intervention is the appropriate method to address routine challenges.

Most managers have not yet developed the same repertoire of strategies to deal with non-routine challenges – those that are adaptive in nature, for which there is no known solution and that require a new way of thinking (drawing on Heifetz & Sinder solution typology, 1988). Without an effective strategy to address these non-routine challenges, many managers are left to work harder, faster or on a greater scale to implement a transactional strategy.

When our transactional interventions fall short, we can generally explain why they fell short with some combination of circumstantial factors or factors that refer to the characteristics of the people carrying out the initiative (i.e., “buy-in”, conflicting personalities, resources, some version of “they” don’t get it; or if all else fails, “politics” etc.). Such explanations, while they may temporarily help us feel less responsible for falling short, do little to really improve the effectiveness of the organizations we lead (Erhard, Jensen, Barbados Group, 2010). This article will recommend several principles and strategies that will allow us to address non-routine challenges.


Managing away the extraordinary opportunity provided by non-routine challenges

Non-routine challenges present an opportunity to go beyond what we have known to be possible. In the midst of non-routine challenges, new solutions materialize, new territory is taken and breakthroughs of significant magnitude are waiting to be discovered. This kind of opportunity does not present itself inside of known challenges demanding nothing more than an application of already discovered, known solutions. A non-routine challenge is an opportunity to intervene in the current performance drift.

In a recent example, a large multi-national oil and gas company launched a development project in an extremely remote, unfamiliar location populated by combative tribes. The company began addressing challenges from a routine model, applying transactional solutions such as offering to construct “better made homes” that would last much longer than the village huts, in exchange for moving an entire village. In this case this transactional solution was not effective; this particular tribe was not interested in homes that lasted longer than several years. By initially addressing the challenges from a routine transactional model, larger opportunities were missed.  In this case, building strong relationships across the project as well as having the resolution of local issues support the local commitment to positively impact the larger social and economic issues were initially missed.

Fortunately, the company allowed themselves to shift their approach to the challenge to using a non-routine model, one that acknowledged the set of social science issues faced by the indigenous in-country population (e.g., moving villages, gaining permission from tribal leadership to move roads and more). In doing so, the company took time to open a dialogue and create relationships with much of the local indigenous population and their tribal leaders. They began to create a new future with the tribes, one that allowed for an unprecedented level of cooperation between certain tribes and the company. This success established a precedent for dealing with this type of issue and demonstrated to the entire industry that such a relationship with indigenous people was possible.

For most of us, non-routine challenges are typically seen as unmanageable, undoable, too abstract, too complex and a bit chaotic. Instead of being seen as an opportunity, they are often seen as a major problem for which we have no ready-made answer. As a result, we instinctively grab for anything we can latch onto. We create some semblance of linearity by cutting out some of the multi-dimensionality and we compartmentalize and reduce the size of the challenge until we can manage it. To use Abraham Maslow’s analogy, we turn whatever we can into a nail so we can use the tool we have – a hammer.

When we address a non-routine challenge using our available transactional tools, we fail to capture what is possible in terms of our overall performance had we stood in front of the overarching non-routine challenge. Non-routine challenges are not meant to be managed. Rather, they require a leader’s intervention, to be thought through in order to create new collaborations and alignments, to discover new adaptations, and to invent new commitments.

If we muddle through the complexity, new pathways for action will emerge and the non-routine challenge will eventually seem manageable. However, the key is to get to these pathways for action strategically, rather than by carving out a piece with which we feel comfortable and applying an already existing solution. As in the example above, when the oil and gas company was willing to stand before the entire non-routine challenge, the pathways for action were very different than those they would have normally taken. They did eventually take specific actions such as opening a dialogue with the tribal leaders. However, they arrived at these actions by starting with a much broader strategic direction of setting world-class standards on social management.

The question is not whether or not we should get to manageable pathways. It’s rather one of when we ought to do so. If we do so immediately, without first allowing ourselves to stand in front of the full challenge – in all its complexity — then we are not treating a non-routine challenge the way it demands to be treated. We are not reaping what is really possible from successfully addressing the challenge.


Transformational leadership principles for non-routine challenges

The principles associated with successfully addressing non-routine challenges are transformational in nature rather than transactional, and are designed to break through our conventional thinking and everyday common sense we bring to what we deal with on a daily basis.

1. How the challenge occurs for us

Despite our tendency to rely on some combination of a person’s mental/physical traits and states and the external circumstances to explain performance, in fact, the source of performance much more simple. The source of any kind of performance is quite simply a product of action taken or not taken (Erhard, Jensen, Barbados Group, 2010).  And, a person’s actions are always correlated with (are a match for) the way in which what they are dealing with occurs or shows up for them (Erhard, Jensen, Barbados Group, 2010, Zaffron & Logan, 2009).

In other words, the transformational model asserts that it is not the performance challenge, the specific circumstances or the intervention strategy itself that makes the difference when confronted by a non-routine challenge. What does make the difference, however, is the way in which the performance challenge, specific circumstances, or the intervention strategy is perceived by (occurs for) a person.

Regardless of your traits, states, skills, knowledge, physical ability or circumstances, your perception of a situation as threatening will align your actions with that perceived threat (i.e., to protect yourself, proceed cautiously, or avoid the situation all together, etc.). If, on the other hand, you see the situation as an opportunity for yourself; your actions will be perfectly correlated with the perceived opportunity (i.e., introducing yourself to relevant people, making connections, making offers, ensuring you get all the relevant information, etc.) (Erhard et al, 2010). However, we tend to not live our lives this way. We actually think that what we are responding to is the situation at hand and that how we perceive things while interesting, is not always that relevant. In fact, it is the only thing that matters! The only thing we are responding to is how that situation idiosyncratically occurs for us (Erhard, Jensen, Granger, 2011). If the objective facts of the situation are not the primary determinant of our behavior, but rather how those objective facts occur for us (how we perceive those facts), we may have much more power in meeting challenging situations than we give ourselves credit for.

A leader’s first job when confronted by a non-routine challenge then is to identify how the challenge they are dealing with occurs for them and the people they lead. This is what will ultimately be shaping their actions and thereby performance.

2. Context shapes how the challenge occurs for us

If it were true that we all saw the world in the same way, exactly as it is, this concept of “how the situation occurs to me” would not matter much. Unfortunately, while we live our lives as if we perceive the world exactly as it is – that what we see and what we hear are exactly as they are in reality – in fact, everything we perceive is colored and shaped by the context for whatever we are dealing with.

By context we do not mean the circumstances of the environment, situational variables or conditions. Rather, we mean the perceptual lens a person brings to a particular situation, a lens that colors and shapes how the facts at hand or the situation shows up or occurs for a person. Everything in our world, everything that enters our perception does so in some context or other, and therefore, what we see takes on the shape and coloring of that context, “highlighting some aspects, dimming other aspects, and blanking out yet other aspects” (Jensen et al., 2011; Ford et al, 2008; Winograd & Flores, 1987).

Modifying an example Erhard, Jensen and the Barbados Group (2010) used to describe one’s worldview and frame of reference, let’s consider the Russian Matroyshka nesting dolls, where an outer figure opens up to reveal a smaller figure in the same shape as the outer, which opens up to reveal the next smaller figure inside and so on. Just as the opportunity set of possible shapes and sizes of each Russian nesting doll is limited by its larger figure, so do our opportunity sets of possible actions always fit within — and in fact take the shape of — the context we have for whatever we are dealing with.

We have a context for everything. Most of our contexts serve as more of a default context than anything that was intentionally created. For example, what immediately comes to mind when thinking about a family member? Or think of a coworker? What immediately comes to mind about that person? Whatever comes to mind can serve as a context (a default context) for how that person shows up (or occurs) for you. You don’t perceive that person as he or she actually is, rather you perceive that person through your context for that person.

And, just like the Russian nesting dolls, everything you hear about that person, or from that person, will be colored and shaped to fit neatly within the context you bring to that interaction. As a consequence, the possible ways of being and possible actions are constricted to fit within your context. Some actions will not even be considered as possible. Sadly, it might be actions that are not even considered that would create a breakthrough in your relationship.

We also have contexts for our industries, our profession, what it is to run a business, for the future of our enterprises and the like. For example, we encountered an organization that was acknowledged as world expert in a particular field that included processes, technology and the requisite management and leadership. This same organization was then thrown into a co-venture partnership with other lesser-recognized experts, where alignment was required. When this particular organization found itself failing, it was perplexed. When it attempted to implement a known solution to increase performance, it did not produce the desired effects. It didn’t know it at the time, but the organization was confronted by a non-routine challenge.

By standing in front of the complexity of the challenge, it began to realize that its default context for the co-venture was one of “we know better.” This “we know better” context constrained and shaped the way the other parties occurred for the organization, and thereby shaped its actions. The result was one of dictating to the other parties, assuming a non-questioning compliance, not allowing for any real discussion, not wanting any real involvement or partnership by others and definitely not allowing any questioning of their own methods and action.

The realization that the default context limited possibilities allowed for a new context to emerge: “We’re partners, like it or not”, and the “liking it or not” was really not of much interest to them as they realized it wasn’t important – they were partners, period. With a new context of “partners” shaping the way the co-venture occurred for the organization, new actions began to take shape, naturally, in a way that allowed for authentic dialogue, inclusiveness, providing information early on in the process to allow for others to give valuable feedback, and similar actions. Ultimately, what emerged within this new context was the realization that as leaders, it was their job to elicit buy-in from their partners, not to assume it.

This new way of seeing things produced new pathways for action. The organization achieved the buy-in it needed, and it is now meeting the venture’s critical deliverables and commitments on time.

A leader’s second job when confronted by a non-routine challenge is to identify the default context that is shaping how the challenge occurs for them, and then to create new contexts that expand the possibilities available to them for dealing with that challenge.


We can create contexts that leave us empowered and enabled

A default context limits and distorts how whatever we are dealing with shows up for us. As described in the example above, when the default context does not leave us with power and ability, we can create contexts that give us greater access to what we are dealing with, and that consequently leave us empowered and enabled. As a consequence, certain facts of the situation and certain possibilities for effective action become more apparent (Jensen et. al, 2011).

For the most part, routine challenges do not require a new context. In fact, what makes them routine is that we have seen them before and consequently know how to handle them, even if it does take intelligence and the careful use of resources. Making an established process more efficient by eliminating or improving steps in the process is an example of a routine challenge that does not really require a new context.

If, on the other hand, you must make what seems to be an impossible deadline and do so with enhanced quality and less resources, what you have is a non-routine challenge. This will require a new context to accomplish this task. Doing what you are already doing a little better will not successfully address the challenge.

What makes a challenge non-routine and adaptive is that it cannot be successfully met within the default context. As described in the example above, the successful result of having a strong co-venture partnership could not have been achieved within the default context of “we know better.” Realizing a future that is unpredictable requires new thinking and new actions that we would not otherwise have taken. It requires a re-contextualization of the situation one is dealing with, in which previously unseen opportunities are seen as possible and previously unrecognized resources become available. The new context of “we are partners” allowed for unseen opportunities for engaging with the other venture partners.

We are the authors of our own context. This is the case whether the context is a default context that is some combination of conclusions, interpretations and decisions we have made about past experiences and projected into future encounters, or a context we create to empower ourselves in fulfilling a commitment. The job of a leader is to create contexts that will allow for new perspectives on the challenges we are faced with, and therefore, new actions that lead to new levels of performance.

What makes human beings different than the rest of the animal kingdom is our capacity for language. Our language capacity allows us to literally invent the world we live in, to invent nuances in human intention, to create stories and imagine futures. This means we have actionable access (with language) to alter the world we live in. It is this capacity – to invent our world and then function in it – that both allows for and subverts our leadership effectiveness.

In another example, a group of mega account managers of a division in a global technology company invented themselves as “trusted advisors” instead of “salesmen of off the shelf products.” This re-contextualization of who they are allowed them to interact with their customers in a new way. For instance, they now shared expertise just to contribute to their customer’s thinking rather than attempting to sell them products at every turn. They found out more about the nature of their customer’s business, and consequently, increased their sales profits.


Reintegration: A relevant adaptive challenge of our time

A current non-routine, adaptive challenge that has major social implications is the challenge of reintegrating an armed service member returning from a hardship deployment. Currently, there are two models to address the challenge of an armed service member with a certain complexity of mental and physical ailments, and who is not successfully reintegrating. One is a medical model that is designed for mental and physical diagnosis, and the other is a coping model that is designed to manage one’s emotions. Coping models are transactional in their design, responding to reintegration issues with suggested skill sets such as communication skills, stress mitigation techniques, anger management and others.

Skills-based programs are unable to achieve their full impact due to the two underlying assumptions of ‘coping’: 1) reintegration issues are inevitable and can only be responded to, and 2) the strategy is one of survival in a world where returning armed service members feel alone and experience a general lack of purpose.

As is normal with transactional models, some of the interventions work some of the time. Again, what makes the difference is context. As we have written above, context shapes the way in which one experiences the world, others, and one’s self. For example, if my context is “I’m all alone,” I will not see the opportunities for love and connection extended to me by my friends and family. At the same time, I will see the evidence for being alone much more readily (I may explain their reaching out to me as “taking pity on me,” or “not genuine”). Even if I learn how to manage my anger better or use better active listening techniques, I am still left with the underlying experience of being alone. In the end, I suppress, avoid, pretend and survive my post-deployment life – that is, I cope. Similar contexts, such as “I’m different now” and “you would never understand,” further undermine skill-based training efforts.

As a firm, we have conducted a pilot study using the Transformational Performance Based Leadership model focused on shaping the armed service member’s context for life and living. The model recognizes that it is not circumstances that are decisive, but rather how one relates to those circumstances (what we have termed context). The transformative model provides a unique access to creating a context for the future that empowers the service member rather than solidifies his/her aloneness, for example. This leaves the service member with the power to be the decisive agent of change and no longer a victim of his or her circumstances.

A common context we encounter with this model is some variation on the theme of, “I’ll never fit back into society – I’ll never be normal and I’ll never again have a normal life.” When the service members recognize 1) how their context was created by them (by default), 2) the way in which their default context is limiting their life (in a self-fulfilling way) and 3) that they can alter their context, they immediately gain ownership of their life and of their reintegration. When a service member creates for him or herself, “Everyone, including me – is entitled to an extraordinary life,” a new world opens up.

The focus on context accesses and transforms the way one observes the world, and thereby has the power to provide the armed service member with an opportunity to create a meaningful and fulfilling experience of life in-garrison. Rather than skills that they must remember and apply, new actions by service members will be natural expressions, allowing for a long-term, sustainable effect. The effects of our pilot study have been substantial, with a statistical significance in areas such as general self-efficacy, post-traumatic growth, goal achievement and others. By teaching them the difference between the facts at hand and their context, one soldier said, “I used to go into uncontrollable rage. Now, before I get angry with people, I can step back and see what is really happening versus my interpretation.” Another said, “I see that my language creates my experience of life. I can have any life I want.”

Einstein said it best: “The problems that exist in the world today cannot be solved by the level of thinking that created them.” We believe that Einstein spoke of problems in the same way that we articulated a non-routine, adaptive challenge in this article.

Attempting to solve such non-routine challenges from a transactional mindset has us narrow in on a piece of the challenge that likely has an existing solution. While valuable in terms of at least having fixed something, we fool ourselves into thinking we have progressed in important ways and have lost the opportunity of realizing something of the magnitude available on the other side of the adaptive, non-routine challenge that was at hand.

Everything is not meant to be managed. Management has its place and so does leadership. A leader’s job is to distinguish the opportunity of a non-routine challenge and to address that challenge through a model that allows for a transformation in the very way the challenge shows up for us and the people we have the privilege of leading. This re-contextualization allows for new opportunities that were previously unseen to show themselves and for the new actions that naturally follow.

We believe the greater the challenge, the greater the opportunity. Here’s wishing you a really big, complex, non-routine challenge, and the wherewithal to stand in front of the whole of it and allow for the breakthroughs to emerge.



The author would like to thank Werner Erhard and Michael Jensen for the inspiration their work provided for this article.



Erhard, Werner, Jensen, Michael C. and the Barbados Group. 2010. A New Paradigm of Individual, Group and Organizational Performance. Harvard Business School NOM Unit Working Paper No. 11-006; Barbados Group Working Paper No. 09-02. Available at SSRN:

Erhard, Werner, Jensen, Michael C., Zaffron, Steve and Granger, Kari L., Course Materials for: Being a Leader and the Effective Exercise of Leadership – An Ontological Model (October 14, 2010). Harvard Business School NOM Working Paper No. 09-038; Simon School Working Paper No. 08-03; Barbados Group Working Paper No. 08-02. Available at SSRN:

Erhard, Werner, Jensen, Michael C. and Granger, Kari L., Creating Leaders: An Ontological Model (2011). The Handbook For Teaching Leadership, Scott Snook, Nitin Nohria, Rakesh Khurana, eds., Sage Publications, 2011.  Also: Harvard Business School NOM Unit Working Paper 11-037; Barbados Group Working Paper No. 10-10; Simon School Working Paper Series No. FR-10-30. Available at SSRN:

Heifetz, Ronald A. and Sinder, Riley M. 1998 Political Leadership: Managing the Public’s Problem Solving In The Power of Public Ideas, ed. Robert B. Reich. Harvard University Press.

Jensen, Michael C., Erhard, Werner and Granger, Kari L., Being a Leader and the Effective Exercise of Leadership: An Ontological Model (PDF File of PowerPoint Slides) Shorter Version (December 7, 2010). Barbados Group Working Paper No. 09-01; Harvard Business School NOM Unit Working Paper . Available at SSRN:

Winograd, Terry and Flores, Fernando (1987). Understanding Computers and Cognition: A New Foundation For Design. United States: Ablex Publishing Corporation.

Zaffron, Steve, and Dave Logan. 2009. The Three Laws of Performance: Rewritting the Future of Your Organization and Your Life. San Francisco: Jossey-Bass.

About the Author

Kari Granger is a performance consultant and leadership development specialist at Sunergos. She is a decorated military officer  and a Fellow at the Center for Character and Leadership Development….Read Kari Granger's full bio

About the Author

Doug Hanover is a principal and senior consultant at Sunergos. For more than two decades he has worked with global leaders and executives, helping them attain the necessary levels of leadership….
Read Doug Hanover's full bio

About the Author

Doug Hanover is a principal and senior consultant at Sunergos. For more than two decades he has worked with global leaders and executives, helping them attain the necessary levels of leadership….
Read Doug Hanover's full bio