From the Classroom: A Strategy for Applying the Growth Mindset Concept to Your Business

What is a growth mindset?

Someone with a growth mindset believes they can develop intelligence and abilities over time. Instead of assuming a person’s skills are fixed, a growth mindset assumes we can improve with the right environment and encouragement. 

For example, when studying different types of praise in school, Dweck and her research team found that it’s best to praise effort over intelligence. Praising someone for being smart encourages a fixed mindset, while praising hard work focuses on effort and encourages a growth mindset. [Related article: How Informal Feedback Can Improve Employee Performance]

Many people believe intelligence and abilities are innate and unchangeable. But when they focus on their strategies, they can learn to adjust and receive the results they want. 

Growth mindset vs. fixed mindset

Whether you have a growth mindset or a fixed mindset affects how you respond to setbacks. If Someone with a fixed mindset believes their lack of ability caused their failure. This makes them more likely to give up, believing they don’t have what it takes to succeed. 

In contrast, someone with a growth mindset believes they can improve their skill sets. When faced with failure, an individual with a growth mindset will likely adjust their strategy and work harder. 

This table illustrates the difference between a growth and fixed mindset:

The benefits of a growth mindset in business

It’s easy to see how the growth mindset concept benefits children, but you can also apply it to your business. Here are a few ways this idea can benefit your business: 

• It helps you thrive amid challenges. Every business faces challenges, including hiring challenges, expansion issues, and accounting challenges. A company with a growth mindset sees these challenges as opportunities to grow. [Learn more of the biggest challenges in starting a business and how to overcome them.]
• It creates a culture of innovation. If you and your employees are stuck in a fixed mentality, it will be hard to think outside of the box and find creative solutions. A growth mindset encourages an environment of new ideas, helping your business beat the competition and stand out in the market.
• It encourages ongoing learning. Someone with a growth mindset realizes they are never done growing and will seek out new learning opportunities for professional growth. This eagerness to learn ensures your company doesn’t become complacent or stagnant. 
• It encourages accountability. A company with a growth mindset will adopt a culture of accountability. Your employees will take responsibility for their wins and losses, realizing it’s all part of the path to progress. 

How to apply a growth mindset to business

In a 2008 speech at Stanford University, Dweck noted how the growth mindset concept could apply to a business leader. She argued that a growth mindset is critical to team development, achievement of strategic objectives and employee motivation.

Dweck said that leaders with a fixed mindset tend to “place greater value on looking smart and are less likely to believe that they or others can change.” On the other hand, leaders with a growth mindset “place high value on learning, are open to feedback, and are confident in their ability to cultivate their own and others’ abilities.” [Related article: How Offering Professional Development Opportunities Helps Your Small Business]

In an article for the Stanford alumni magazine, Dweck explained more ways that fixed and growth mindsets impact a business. Let’s explore two key ways to use a growth mindset in your business. 

1. Accept mistakes.

In the article, Dweck talked about the collapse of Enron and how the company culture was obsessed with talent and intelligence. This focus pressured employees to lie about and try to cover up company problems. No one wanted to admit to any type of failure, because mistakes were seen as unacceptable. 

When you apply a growth mindset to your company culture, you’ll create an atmosphere where everyone accepts mistakes as a path to learning. Instead of trying to hide mistakes, team members will admit to them and take steps to improve. As a leader, you should welcome the opportunity to learn from your failures – and encourage the same attitude in your team.

2. Focus on skill development.

The article also discussed the business implications of the growth vs. fixed mindset in terms of performance management. Jeffrey Pfeffer, professor of organizational behavior at the Stanford Graduate School of Business, stated that businesses spend “too much time in rank-and-yank mode, grading and evaluating people instead of developing their skills.” 

If leaders develop a growth mindset, they’ll be more willing to invest in programs and strategies designed to encourage new or enhanced skills. This investment is more likely to produce engaged, effective team members than just checking off boxes on a performance review. [Consider these tools to measure employee performance so you can provide ongoing feedback and support.]

A 2014 Harvard Business Review article focused on Dweck’s assessment of whether an organization can have a fixed or growth mindset like an individual. The initial research yielded some interesting findings.

“Employees at companies with a fixed mindset often said that just a small handful of ‘star’ workers were highly valued,” the HBR editors explained of Dweck’s study. “The employees who reported this were less committed than employees at growth-mindset companies and didn’t think the company had their back. They worried about failing, and so pursued fewer innovative projects. They regularly kept secrets, cut corners, and cheated to try to get ahead.”

Dweck and her research team noted a different approach in organizations identified as having a growth mindset. “Supervisors in growth-mindset companies expressed significantly more positive views about their employees than supervisors in fixed-mindset companies, rating them as more innovative, collaborative, and committed to learning and growing. They were more likely to say that their employees had management potential.”

How leadership drives the growth mindset

If an organization wants to pursue a growth mindset, it’s up to the leadership to drive this change. You and your team managers can incorporate a growth mindset into your leadership style by promoting continual learning, accepting mistakes, and focusing on maximizing employees’ potential. [Are you a giver, taker or matcher? Learn about the influence of different leadership styles.]

These strategies often mean hiring from within rather than seeking outsiders, seeing every team member’s potential, and valuing a passion for learning over credentials and previous accomplishments. A focus on your team’s capacity for growth could give your business significant advantages over one that settles for maintaining its current talent level.

Shirley Tan contributed to the writing and research in this article.