The Transformative Leader's Inner CORE

“A transformational leader… challenges the status quo, mobilizing and empowering people to achieve a noble cause, that will have a profound, far-reaching impact.”

—Keith Krach, Chairman, DocuSign

“Most people never see the horizon. Some are lucky enough to see and admire it. Others shape it.”

—Paul G. Stoltz, PhD

The purpose of this blog post is to extract from the deep analysis of an exemplar of transformational change—in this case, a larger-than-life CEO—those CORE facets and lessons any and all of us can begin to apply to forge real change in an adversity-rich world.

Each morning, as dawn slowly brightens at Pismo Beach on the Pacific Coast, two groups emerge from the mist. One group huddles around their steaming cups of joe, commenting on the waves, while another group stoically dives in and surfs them, full on, in all their random fury. And it always starts with one, that wetsuit-clad warrior who attacks and conquers daunting forces, converting bone-crushing challenges into the most exhilarating rides.

I’ve had the tremendous honor of working with thousands of CEOs. Of them all, Keith Krach, Chairman of DocuSign, is a true wave warrior of transformation. He converts havoc into art. Not only does he empower people to ride what others can’t reach, he mobilizes them to create the epic waves, game-changing rides, and enduring thrills, that most can only hope to witness.

Measuring Krach

I’ve spent 39 years as a researcher and practitioner, decoding the Keith Krachs of the world, the truly transformational leaders. As much as Krach’s IQ and EQ (emotional intelligence) matter, it is his AQ (Adversity Quotient) that sets him apart. His AQ score comes in a whopping 192. Top 1 percent. (The average score for leaders is 146 out of a possible 200).

AQ is a measure of how a person responds to adversity. Top institutions like Harvard, MIT, and Carnegie Mellon have selected AQ for various applications—positioning it, at times—as the gold standard for assessing how people handle the tough stuff. My team and I have measured the AQs of more than a million people across nearly every sector and demographic, in 137 countries.

If we’ve discovered one thing, it’s that exceptional leaders—those who truly challenge the status quo and bring people together to unleash their greatness with enduring impact—have exceptional AQs.

Why is Adversity Quotient Key to Transformational Leadership?

Because transformation is rife with adversity. It’s about achieving profound, far-reaching impact in spite of all the ways the world conspires against you. Transformation is a steep, arduous ascent. It’s all about adversity, and what you do with it, to fuel your climb. It is no wonder Krach is quoted as saying, “When the world hands you a sack of sour lemons, the objective of the game is to make sweet lemonade.” Easy to say, tough to do…repeatedly and relentlessly.

The Building Blocks of a Transformational Leader

It’s understandable why Krach believes AQ drives transformation. Here’s why: Just like human DNA is made from four underlying building blocks, your AQ has four CORE Dimensions that can offer meaningful insights into your character. These CORE Dimensions—Control, Ownership, Reach, and Endurance—are best understood as the answers to four fundamental questions about how you perceive and respond to adversity.

C—Control—What factors can you potentially influence?

O—Ownership—Where and how can you step up to make the most immediate, positive difference?

R—Reach—What can you do to contain the downside, maximize the upside?

E—Endurance—How can you get past this adversity as quickly as possible?

Your overall AQ metric is the sum of four subscales, one for each of the CORE Dimensions.

The great news about AQ is that it’s not just a static measure. It’s not a tattoo. In fact, it’s something you can exercise and grow, use and hone. You can measurably and permanently improve your AQ by strengthening each of your CORE Dimensions.

Consider Keith Krach’s CORE scores, and how they form the building blocks of a great transformational leader.

C—Control

To what extent do you perceive you can influence whatever happens next?

Krach’s score: 50 out of a possible 50; Average is 38

CORE scores are distributed on a classic bell curve. Most people perceive some adversities as completely beyond their influence. Those who score the lowest tend to suffer chronic learned helplessness. In the face of setbacks, they feel nothing they do will matter, so why even try? But Keith Krach can’t imagine a situation where he can’t exert some level of control.

Krach’s reaction to the 9/11 attack back in 2001 is one example. At the time, Krach’s company was hosting a 1,000-person customer conference in New Orleans. Half of the attendees were from New York City. As details of the attacks were reported, it was clear that all air traffic would soon be grounded.

What to do? What control could you possibly exercise in this situation? Krach immediately saw that everyone, especially all those New Yorkers, needed to get home ASAP—with or without airplanes. He ended the conference and gave instructions to everyone to reassemble in the hotel ballroom in an hour. Meanwhile, he instructed his team to charter every available bus in the city (about 40), and set up lunch (and a bar) in the ballroom, along with tables organized by destination.

When shell-shocked attendees gathered, Krach revealed his plan to get everyone home. Buses were already lining up outside and New Yorkers would be departing first. Anybody who couldn’t travel on a bus would have room and food comped—no matter how long it took.

From a hotel ballroom in New Orleans, there was nothing Krach could do to control events unfolding in New York City, Washington D.C. and Shanksville, Pennsylvania. But he quickly saw what he could control, and took action. While others stood stunned, he got it done.

Those who respond better and faster win.

O—Ownership

How likely are you to step up to do anything to improve the situation?

Krach’s score: 50 out of a possible 50; Average is 41

Leaders adore this CORE dimension because it’s about accountability. Higher AQ leaders naturally step up. In fact, it’s nearly impossible to prevent them from doing so.

Krach’s willingness to take ownership is exemplified in his reaction to an interrupted effort to replace himself as CEO for a company he founded.

Looking forward to a break after leading his company through a 5-year, non-stop period of hyper-growth, Keith promoted his second in command to step into the role of CEO. But just three months later, it became clear this wasn’t going to work. Krach had been looking forward to taking some time to reconnect with his family, but it was obvious what needed to be done.

Within 24 hours of letting the “short-term CEO” go, Krach had to finesse a board meeting, an earnings call, and four TV interviews. He did, of course. But in Krach’s mind, there was never any doubt about his need to take ownership. The responsibility was his.

R—Reach

How far do you perceive this adversity will reach into other areas of life/work?

Krach’s score: 45 out of a possible 50; Average is 33

Even normal people (those who score in the middle of the AQ curve) have moments, especially when they’re tired and fed up, when one more adversity or frustration leads to an emotional oil spill. Suddenly, everything is ruined. Only those with exceptional AQs are able to consistently contain any and all adversities, not allowing them to be any bigger or worse than absolutely necessary.

There’s a secret power twist to Reach. It’s not just about containing the downside. It’s about maximizing the upside of adversity. When most are mired in the muck, true transformation gets unleashed.

Here’s a Krach example: One and a half years after he became chairman of DocuSign, he was preparing to step into a more hands-on role as CEO to accelerate growth. At the time, the company was in negotiations to acquire a competitor, EchoSign. Krach was hoping to take EchoSign off the board as he assumed his new role.

But despite heroic efforts, it was not to be. Down to just one final term, and unable to tell EchoSign that he was becoming the new CEO, Krach saw the deal fall apart as Adobe swooped in to buy EchoSign. His hopes were dashed, and his new job just got a lot harder. How to react?

As the new CEO, Krach immediately took steps to maximize the upside. He saw an opportunity to energize DocuSign against what was now a more powerful competitor. He put together an aggressive competitive knock-out program, began depositioning Adobe, and building partnerships with key Adobe competitors. DocuSign also shifted its marketing focus, letting Adobe shoulder the burden of legitimizing e-signature in the marketplace, focusing instead on cementing category leadership by turning “DocuSign” into a verb.

Krach used the new competitor to energize the company. He still says if you don’t have a strong competitor to mobilize against, you should go ahead and invent one.

E—Endurance

How far do you perceive it will last or endure?

Krach’s score: 47 out of a possible 50; Average is 34

Endurance plays huge in transformation. It’s one of Keith’s secret weapons. If you can’t get past the tough stuff, no matter how overwhelming, you can’t lead transformation.

Typically, harder challenges take longer to resolve. To those with lower AQs, major setbacks may be perceived as unalterable and permanent. Take climate change. There are those who throw up their hands and say, “We’re done. It’s too late.” But leaders with high endurance are undeterred by the enormity of the task. They work relentlessly to get past the worst of it, to a better world.

Krach’s endurance is exemplified in another CEO search—this time when he was looking for a successor to step into his CEO role at DocuSign. What the press called “the number one software CEO search in the world” turned out to be an 18-month process that included two misfires.

One well-publicized candidate withdrew two nights before the press conference to announce his new role. Several months later, another candidate backed out. Finally, after 18 months, a solid successor was found. For Krach and his team, this was an intense rollercoaster, but they stuck with it, making it all look like smooth sailing from the outside.

A Serial Transformational Leader to the CORE

Beyond IQ or EQ, thirty-nine years of science proves that at his CORE, Keith Krach is a genuine transformational leader. The transformations Krach has led in high tech, commerce, manufacturing, education, and philanthropy prove that AQ leadership skills are transferable across multiple sectors. He has exercised, grown, and honed those skills time and time again while facing adversity or as Krach puts it, “jumping in, water over your head.” He says, “It is scary fun and addicting.” Ask any wave warrior.

At this point in Krach’s life, after so many society-enriching successes, nothing would fulfill him more than to help emerging transformational leaders grow their COREs, so they can shape and brighten the horizon for us all.