I read an article two weeks ago in the Financial Review which outlined the attributes common amongst some of Australia’s most successful entrepreneurs. Author John Stensholt discussed how Anthony Pratt (Visy), Geoff Harris (Flight Centre), Gerry Ryan (Jayco) and others share more than just astute commercial acumen and an insatiable hunger for success. They have all come back from failures, learnt from mistakes and seen the downside of business (recessions, changing political leaders driving reform that established businesses could not respond to, high-risk decisions that have not paid off and so on). In effect, these leaders were demonstrating a ‘growth mindset’ throughout their career. Coined by Carol Dweck of Stanford University, a growth mindset refers to attitudes and behaviours associated with appreciating that setbacks are part of changing course, that you can learn and do better next time, that it is important to try and if you fail, it is an opportunity to learn and grow. I also read an article in June 2017’s Harvard Business Review (HBR), in which a significant piece of research is summarised outlining what the most successful CEOs do and one of those things is seeking out stretch targets and goals (even if they may be uncomfortable for the individual) and coping with those setbacks in a constructive manner if things don’t work out. Thus, across these two articles, there is a common theme around coping with adversity being a fundamental component of effective C-level and organisational leadership.
However, in reviewing both Stensholt’s piece and the HBR article, there is also another important characteristic the Australian entrepreneurs and global CEOs have in common – these leaders have stuck to their expertise, they have learned how to be risk averse, they know their limits, they stick to what they are good at and they deliver reliably. The entrepreneurs in Stensholt’s article discussed how critical their adverse experiences were because they helped build a mindset that drove more conservative, less risky decisions in the future. Thus, there is an element of ‘safety’ to how they operate. As an example, in Stensholt’s article, it is noted that Anthony Pratt stubbornly, but successfully, refuses to invest in anything outside his core business, quoting “one of the things that I find when I invest outside my expertise is I get really nervous if I don’t understand that business.” Geoff Harris from Flight Centre discusses the importance of simultaneously considering your strategy on the market entry of a business as well as your cost-efficient exit from it. Thus, there is an element of what I would argue is a ‘fixed mindset’, likely honed through positive and negative experiences and by having a growth mindset in the first place to put yourself out there to those experiences.
Fixed thinking, traditionally defined, is associated with believing that intelligence or talent, are fixed traits. Therefore someone with more of a fixed mindset believes these innate talents will drive success and therefore there is no need to push oneself outside of a comfort zone to grow through new experiences. It could be argued that leaders like Pratt and Harris don’t have a fixed mindset in terms of Dweck’s traditional definition, however it appears that they certainly know what talents have gotten them to this point in their career, they know what they are good at, what they are not good at and therefore what types of business ventures that want to associate themselves with.
The concept of growth mindset has gained significant traction in industry, particularly when exploring how organisations define and measure leadership potential (with growth mindset being seen as a possible powerful predictor of leadership potential). In a leadership development context, courses and programs are now including learning objectives around building a growth mindset, developing skills in adaptive leadership and learning to become more agile to respond more constructively to setbacks. However, I think we also need to be exploring when a more fixed mindset, which might drive behaviours such as persistence and strict adherence to a course of action, may be valuable and predictive of success. We are certainly living in a volatile, uncertain, changing world and adaptability is key, but as a leader, there may be merit in including some form of stability and fixed thinking in leadership assessment/development and talent management contexts that use growth mindset as a core concept.
The ability for leaders to flex between growth and fixed mindsets when leading organisations, functions and teams is an interesting extension of the current definition of growth mindset and one that CLA is currently exploring in our approach to measuring leadership potential and developing leaders. Specifically, when does a fixed mindset work? When does a growth mindset work? Here are some of our initial thoughts at CLA:
- When working ‘on’ the business, it may be important to approach your thinking about the organisation with more of a fixed mindset. This may mean being very clear on the strengths of the organisation, its strategy, purpose and reason for being and staunchly sticking to them, without being overly adaptable to change and without pushing too much outside the comfort zone for fear of exposing vulnerabilities in the organisation and taking on too much risk.
- When working ‘in’ the business and focusing on what the business needs to do operationally to be successful, it may be best to adopt a growth mindset, with a little bit of fixed thinking. This means an ability to be open enough to know that you need to surround yourself with the best talent to be successful. Yet it also means knowing exactly what to look for to achieve your organisation’s goals, which means possibly being more fixed on your mindset and approach to talent identification.
- When working on yourself as a leader and developing professionally, it may be best to adopt a growth mindset. As Dweck defines it and as epitomised by Australia’s exceptionally successful business leaders, being open to learn through experiences (both good and bad) is critical and facing and constructively coping with adversity is at the core of smart decision-making i.e., demonstrating a growth mindset.
We look forward to sharing our evolving thoughts on this topic with you!