Why you need a growth mindset
In her book Changing the Way You Think to Fulfill Your Potential, Carol Dweck describes how people with a growth mindset believe that just about all human qualities, including intellectual abilities can be developed and cultivated through effort.
Not only are people with a growth mindset not discouraged by failure, they don't even think they're falling. They think they're learning.
So if you possess a growth mindset, you're likely to have an enquiring mind, are always seeking to learn and are likely asking many questions. You're not afraid to be wrong or seen as asking the "dumb" question. You love challenges, are more likely to take risks and you're happy to put in a lot of effort. You don't worry about failing because you believe that through failure comes learning.
A person with a fixed mindset believes that their qualities are carved in stone, and therefore feel like they need to prove themselves over and over again. They are concerned with looking smart and not looking dumb, and evaluate every situation accordingly: Will I succeed or fail? Will I look smart or dumb? Will I be accepted or rejected? Will I feel like a winner or a loser? Because they believe personal qualities are fixed and cannot be changed, they feel that if they failed it is because they are no good and nothing could change that. So they avoid situations where that might happen and stick to what they know. It makes it difficult to want to try new things, take risks or be challenged for fear of being exposed as a "fraud or failing.
When you understand the definition of the growth mindset and the fixed mindset, then it isn't difficult to understand the importance of having one over the other. It's never too late to change your mindset either - you can, that's what Dweck's book is all about.
So, why is it important for business? Businesses that encourage a growth mindset are better equipped to deal with the following:
Disruption - If it's true what they say about disruption, then being open to learning is key to keeping up to date with new trends that are likely to impact. Particularly so when disruption won't just come from within your own industry but could come from outside your industry. Airbnb and Uber are the most cited examples. You want people in your company that are prepared to try new and even outrageous things, and you need to have a culture that celebrates this courage, even if they fail.
Innovation - The counter to disruption and key to staying relevant is ongoing innovation. Where will you find the resources to innovate? What would be the innovation that will return the greatest dividends if you don't know what the most relevant trends are? Which ones will be difficult to implement and unprofitable? If you're not having those discussions within your company, not actively seeking new ideas, then it's unlikely your company is very innovative. A growth mindset encouraged by you means it becomes part of the company's DNA to continually seek new improvements. All ideas are genuinely welcome, and staff don't feel judged for voicing their thoughts. They don't have to be 'big bang' to make a difference; incremental improvements sustained over time can also have a big impact and mistakes are not so costly.
Culture and engagement - Retaining staff is paramount in these times of uncertainty, and when you have proven talent, investment in training is expensive but necessary and even more vital to keep people you've invested in. One of the top five reasons staff stay in a job is when they feel they're learning and being developed. High quality feedback and praise for effort, behaviours, and for taking risks is more likely to produce innovation and improve performance than just praising for results.
Longevity and sustainability - If you're serious about building a company that is future proof and exists long after your active management, or creating value that makes it attractive for acquisition, then a culture of a growth mindset adds exponentially to the value of your organisation and builds an expectation for the future success of any leadership team. That's because an organisation that has a growth mindset is never satisfied with the status quo and is always seeking to do things better.