Soren Kaplan: Experiential Intelligence is your combination of mindsets, abilities, and know-how gained from your unique life experience. Just like memorizing facts doesn’t give you a high IQ, your experiential intelligence isn’t merely what you’ve learned over time. It’s how you perceive challenges, view opportunities, and tackle your goals.

There’s a slang term that touches the surface of how life experiences create intelligence: ‘street smarts.’ But the term street smarts is usually used to describe people who lack formal education yet are still able to survive in tough situations. The reality is that we all develop a form of street smarts starting early in life, and we use this intelligence to navigate both personal and professional challenges and opportunities over time.

But here’s the kicker. Sometimes the smarts we develop through our experiences help us, and sometimes they outsmart us later because, while certain strategies were once useful, they can end up undermining our success.

And that’s what motivated me to write this book. My childhood was less than ideal. My mother developed a mental illness when I was three. My father, who worked multiple jobs and was consumed by his spiritual pursuits, was rarely home. As my parents struggled to make ends meet, we bounced around from one home to another. By the time I was fifteen, I had moved sixteen times.

As paradoxical as it may sound, the same things that traumatized me early on also delivered unique gifts that I successfully use in the workplace today. Once I was able to view my life experiences in a new light, including all the things I “practiced” doing for many years, I became better able of seeing my hidden strengths. I realized I instinctively understood how to work with limited data, check assumptions, decipher unwritten rules, hedge bets, and quickly pivot in new directions – the same things I’ve used to run startups, help companies transform their organizational cultures, and provide leadership development to managers around the world.

Caprino: How do life experiences actually build “intelligence” and help develop our XQ? How is this form of intelligence instrumental?

Kaplan: The concept of experiential intelligence isn’t new. It was first introduced by Robert Sternberg, the past president of the American Psychological Association. I’ve further developed the concept using research from the fields of psychology, sociology, and even neurology related to how traumatic experience rewires our brains.

Today’s disruptive world requires that we recognize what leads to real success. It’s not just IQ. It’s not just emotional intelligence. It’s your mindsets, abilities, and practical know-how. You develop these things from your experiences. But we haven’t had a way to talk about how to recruit, hire, develop people, and leverage experience in a concrete way.

Success today is about navigating constant disruption. Experiential intelligence introduces the third leg of the intelligence stool in addition to IQ and emotional intelligence that’s been there all along but is now equally important to recognize as a critical success factor in life and business. To deal with our fast-changing world, we need to recognize the source of the mindsets, abilities, and know-how we all develop and can leverage to ensure we survive and thrive. These are the components of XQ.

Caprino: What steps can specifically help advance our XQ awareness and abilities and what impact might that have?

Kaplan: Experiential intelligence exists on three levels – know-how, abilities and mindsets. The most tangible is your know-how, which includes your practical knowledge and skills. The second level involves your abilities, which guide how you apply your knowledge and skills to use them in the most effective way possible. Abilities can include higher-order things like pattern recognition or managing uncertainty. Your mindsets are your attitudes and beliefs about yourself, other people, and the world, which can be conscious or subconscious.

Gaining greater self-awareness of your mindsets, abilities, and know-how plays a big part in developing your XQ. When you understand what led you to adopt certain mindsets, for example, you increase your ability to consciously change them, which can lead to growth in your abilities and know-how.

It’s pretty simple to begin uncovering your experiential intelligence. Ask yourself, “What are the most poignant experiences that shaped my life?” Consider both the positive and negative experiences. Then look at what these specific mindsets, abilities, know-how and experiences instilled in you or led you to develop. I call the result of this your “Experiential Intelligence snapshot.”

Caprino: In your book, you discuss ‘decoding’ our mindsets. Why is that important and how do we do it?

Kaplan: Your mindsets are your attitudes and beliefs, both what you’re aware of and the things that govern your behavior subconsciously. Examining your mindsets by studying how they were initially formed empowers you to reinvent the way you see yourself, others, and the world.

For example, if you hold the belief “I can’t afford to fail,” it’s unlikely you’ll become a successful entrepreneur because starting a new business typically involves risk. Your belief that failure isn’t an option can limit your other possibilities. Instead of going the entrepreneurial route, for example, you might instead play it safe and get a job working for someone else.

As a result, you miss opportunities to develop skills and develop greater confidence in yourself that you might have gained had you gone off on your own. It’s a self-perpetuating loop that can restrict possibilities at a deeply subconscious level.

To help with this process, I’ve created a tool called the Mindset Map. It traces back the experiences you had, the messages you received from them, and the beliefs you took on from these messages. It’s a simple tool but very powerful. In a few minutes, you can get a sense of the beliefs and attitudes you may have taken on without knowing it, including both self-limiting beliefs that get in your way, as well as self-expanding beliefs that you might want to leverage for even greater success.

Caprino: My latest book The Most Powerful You shares my recent research around what I call the 7 damaging power gaps that negatively impact a staggering 98% of professional women and 90% of men today, keeping them from reaching their highest and most rewarding potential in their work and careers. It shares how our childhood and past experiences often directly shape who we become, and will continue to define us unless we proactively address and in many cases, heal our trauma and pain from the past. From your experience and research, how do early life experiences like traumas create risks, obstacles, or attitudes that limit our personal and professional potential?

Kaplan: There’s a strong connection here. As we’re growing up and even into adulthood, we’re impacted by our experiences, both positive and negative. Traumatic experiences, whether big events or a series of smaller experiences, can leave a mark on us. The thoughts and feelings associated with the original experience and any connected neurological responses can stick around for a long time, sometimes decades. Trauma can also lead to self-destructive behavior, like addiction as a coping mechanism for avoiding painful feelings.

Developing your experiential intelligence involves working through both the big and little impacts of the past so that you gain greater awareness of what makes you tick, specifically the self-limiting beliefs and autopilot behaviors that might be getting in the way of your personal or professional goals.

But developing XQ goes beyond overcoming your past. It also includes identifying the specific strengths and assets you developed from your collective experiences that you can leverage in new ways once you’re aware of them.

Caprino: How can expanding experiential intelligence in business, i.e., for leadership, teams and organizational culture, make a positive impact?

Soren: Many organizations haven’t fully tapped into the depth of experiences that inherently exists across their people and teams. Business tends to think we need to separate personal from professional spheres of life, that somehow people can leave their personal selves at the office, or home office, door when they come to work. The reality is that we carry with us the entirety of ourselves wherever we go.

Leaders first need to recognize that the reality of life, including in business, is that everyone brings the whole of who they are with them wherever they go, including both their strengths as well as self-limiting beliefs. Until companies embrace this fact, they’ll never reach their full potential.

For example, we may need to help people overcome their limiting mindsets, or help them uncover their hidden assets derived from their full set of life experiences, not just their work experience.

Developing people’s experiential intelligence helps them become better leaders. Teams that harness their collective XQ achieve greater collaboration and innovation. Organizations that recognize XQ as a strategic imperative can more fully leverage their talent and transform their cultures by scaling the best practices and assets that exist across their people.

Caprino: Finally, how can we best assess and expand our experiential intelligence right now?

Kaplan: When you more fully understand the impact of the past on how you think, feel, and act, you increase self-awareness. This principle applies to individuals, teams, and organizations. By exploring your most poignant experiences with greater intention, you can discover hidden strengths that you can leverage to achieve your goals.

For more information, visit Soren Kaplan and Experiential Intelligence.

Kathy Caprino is a global career and leadership coach and trainer helping professionals expand their confidence and impact.