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Updated May 01, 2024

A Strategy for Applying the Growth Mindset Concept to Your Business

Apply the growth mindset to your business to encourage happy, motivated employees and a more successful organization.

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Jamie Johnson, Senior Analyst & Expert on Business Operations
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Psychologist Carol Dweck coined the term “growth mindset” to describe a way to change the educational process. Dweck and her team observed how some students were troubled by even the smallest setbacks while others were able to rebound from failure and keep going.

Although the growth mindset was designed to change the way kids are taught in schools, it can be leveraged in many different areas. For instance, adopting a growth mindset can make your business more successful. 

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 that 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 praising effort over intelligence is best. Praising someone for being smart encourages a fixed mindset while praising hard work focuses on effort and fosters a growth mindset. [Related article: How Informal Feedback Can Improve Employee Performance]

Many people believe intelligence and abilities are innate and unchangeable. However, by focusing on their strategies, they can learn to adjust and receive the results they want.

FYIDid you know
Soft skills such as emotional intelligence are often dismissed as talents you have or don’t have. However, most people can develop emotional intelligence skills if they put in the work and keep a growth mindset.

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 a fixed mindset:

Fixed mindset

Growth mindset

I’m either good at something or I’m not.

I can improve my skills over time.

Feedback is criticism.

Constructive feedback helps me grow.

There’s no reason to improve if I’m already good at something.

There’s always room for improvement.

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 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.” Meanwhile, leaders with a growth mindset “place a 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. 

Applying a growth mindset to your company culture will 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.

There are business implications of the growth vs. fixed mindset when it comes to performance management. Leaders who develop a growth mindset are 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.]

Organizations can have a fixed or growth mindset like an individual, which may also impact performance. In her study, Dweck found that employees in fixed-mindset companies were more worried about failure than those in growth-mindset organizations. This led to an influx of cheating, secrets and cutting corners. These employees were also less committed and didn’t trust that their company had their back.

Dweck and her research team noted a different approach in organizations that identified as having a growth mindset. For example, in these companies, supervisors were significantly more positive than those in fixed-mindset companies. They rated their employees as more collaborative and innovative.

Bottom LineBottom line
To create a strong company culture that prioritizes a growth mindset, be supportive of all your team members’ goals and performance progress so they’ll feel more comfortable asking questions, offering feedback to leadership and contributing to the team.

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.
TipBottom line
Implement a top-rated learning management system platform with career-enhancing courses as one way to keep your employees engaged and happy.

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.

Skye Schooley and Shirley Tan contributed to this article.

author image
Jamie Johnson, Senior Analyst & Expert on Business Operations
Jamie Johnson has spent more than five years providing invaluable financial guidance to business owners, leading them through the financial intricacies of entrepreneurship. From offering investment lessons to recommending funding options, business loans and insurance, Johnson distills complex financial matters into easily understandable and actionable advice, empowering entrepreneurs to make informed decisions for their companies. As a business owner herself, she continually tests and refines her business strategies and services. Johnson's expertise is evident in her contributions to various finance publications, including Rocket Mortgage, InvestorPlace, Insurify and Credit Karma. Moreover, she has showcased her command of other B2B topics, ranging from sales and payroll to marketing and social media, with insights featured in esteemed outlets such as the U.S. Chamber of Commerce, CNN, USA Today, U.S. News & World Report and Business Insider.
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