Organizational Mindsets (Growth vs Fixed)! – Which one is better?

Growth & Fixed mindsets create differences in the lives of people. Growth mindset people are generally successful in life vs Fixed mindset people are just getting the opposite result. Like individual mindsets, organizational mindsets matter a lot. If an organization is having a growth mindset culture then people in the organization will be happy, more productive and most of the time these organizations running in profits even in difficult times. Opposite to this, if the organization is having fixed mindset culture, then there will be a lack of harmony between departments, people in the organization will have personal agenda over the organization agenda and many times such companies struggle financially.

One of the classic explanations of organizational mindset is given by Carol Dweck in her book titled “Mindset: Changing The Way You think To Fulfil Your Potential”. This book is highly recommended by Satya Nadella (Chief Executive Officer of Microsoft)

Organizational Mindsets

When we talked about Lou Gerstner (former chairman of the board and chief executive officer of IBM) and Anne Mulcahy (former chairperson and CEO of Xerox Corporation), we saw the kind of company they wanted to create—and did create. These were companies that embraced the development of all employees and not the worship of a handful of anointed “geniuses.” This raised a question.

Clearly, the leader of an organization can hold a fixed or growth mindset, but can an organization as a whole have a mindset? Can it have a pervasive belief that talent is just fixed or, instead, a pervasive belief that talent can and should be developed in all employees? And, if so, what impact will this have on the organization and its employees?

Study of Fortune 500 & Fortune 1000

To find out, we studied a group of large corporations consisting of Fortune 500 and Fortune 1000 companies. An organization might embody a fixed mindset, conveying that employees either “have it” or they don’t: We called this a “culture of genius.” Or it might embody more of a growth mindset, conveying that people can grow and improve with effort, good strategies, and good mentoring: We call this a “culture of development.”

To determine a company’s mindset, we asked a diverse sample of employees at each organization how much they agreed with statements like these: When it comes to being successful, this company seems to believe that people have a certain amount of talent, and they can’t really do much to change it (fixed mindset). This company values natural intelligence and business talent more than any other characteristics (also a fixed mindset). This company genuinely values the personal development and growth of its employees (growth mindset).

Culture Difference

We then compiled the responses and they revealed something important: There was a strong consensus within each company about whether the company had fixed or growth mindset beliefs and values. We were now ready to examine the impact of the company’s mindset—on employees’ trust in the company, on their sense of empowerment and commitment, and on the level of collaboration, innovation, and ethical behaviour that was embraced in the organization.

What we found was fascinating. People who work in growth-mindset organizations have far more trust in their company and a much greater sense of empowerment, ownership, and commitment. For example, when employees were asked to rate statements such as “People are trustworthy in this organization,” those in growth-mindset companies expressed far higher agreement. Right in line with this, employees in growth-mindset companies also reported that they were much more committed to their company and more willing to go the extra mile for it: “I feel a strong sense of ownership and commitment to the future of this company.” Those who worked in fixed-mindset companies, however, expressed greater interest in leaving their company for another.

Response of Employees

It’s nice that employees in growth-mindset organizations feel trusting and committed, but what about agility and innovation? That’s something that organizations should and do care greatly about these days. Perhaps a company has to sacrifice some comfort and loyalty to be on the leading edge. Perhaps a belief in fixed talent motivates innovation.

It doesn’t look that way.

It’s actually the employees in the growth-mindset companies who say that their organization supports (reasonable) risk-taking, innovation, and creativity. For example, they agreed far more strongly with statements like this: “This company genuinely supports risk-taking and will support me even if I fail” and “People are encouraged to be innovative in this company—creativity is welcomed.”

Employees in the fixed-mindset companies not only say that their companies are less likely to support them in risk-taking and innovation, they are also far more likely to agree that their organizations are rife with cutthroat or unethical behaviour: “In this company there is a lot of cheating, taking shortcuts, and cutting corners” or “In this company, people often hide information and keep secrets.” It makes a lot of sense when you think about it. When organizations put the premium on natural talent, then everyone wants to be the superstar, everyone wants to shine brighter than the others, and people may be more likely to cheat or cut corners to do so.

Conclusion(Which one is better?)

So, employees in growth-mindset companies have more positive views of their organizations, but is that admiration reciprocated? Yes, it is. Supervisors in growth-mindset companies had significantly more positive views of their employees—and on dimensions, companies should care about. Supervisors in growth-mindset companies rated their employees as more collaborative and more committed to learning and growing. And as more innovative. And as having far greater management potential. These are all things that make a company more agile and more likely to stay in the vanguard.

I love this last finding: Supervisors in growth-mindset companies saw their team members as having far greater management potential than did supervisors in fixed-mindset companies. They saw future leaders in the making. I love the irony. The fixed-mindset companies presumably searched for the talent, hired the talent, and rewarded the talent—but now they were looking around and saying, “Where’s the talent?” The talent wasn’t flourishing.

Our findings tell us that it’s possible to weave a fixed or growth mindset into the very fabric of an organization to create a culture of genius or culture of development. Everybody knows that the business models of the past are no longer valid and those modern companies must constantly reinvent themselves to stay alive. Which companies (organizational mindsets) do you think to have a better chance of thriving in today’s world?

“It’s not that I’m so smart, it’s just that I stay with problems longer.” – Albert Einstein