June 8, 2023
TPL Insights #174 – The Best Leadership News to Come Along in Decades is Yours for the Taking
By Rob Andrews with paraphrased content from Dr. Carol Dweck’s book Mindset
So here we are, in June 2023, amid uncertainty…again! This is beginning to feel like the new normal, isn’t it? Well, irrespective of the outside forces we face today and the headwinds we will encounter in the future, every company I know is trying to improve. Carol Dweck, Ph.D.’s landmark book Mindset is a must read for every senior leader who aspires to corporate greatness. Dr. Dweck is widely regarded as one of the world’s leading researchers in the fields of personality, social psychology, and developmental psychology.
In this blog post, I will give you three thoughts from Carol’s book you can put on your radar that will begin to make a difference in your company today.
The Old Obsession with Hiring the Best and Brightest Talent is Largely Misguided
In 2001 came the announcement that rocked corporate America. Enron, thought by many to be the poster child of talent and the company of the future, had gone under. According to Dweck, it wasn’t incompetence or corruption that led to Enron’s demise, it was mindset. Malcom Gladwell wrote in the New Yorker that Enron, as well as many other American corporations, had become obsessed with “talent.” McKinsey & Co. insisted that corporate success required a “talent mindset.” Just as there were naturals in sports, there were natural leaders in business.
Gladwell wrote: “This talent mindset is the new orthodoxy of American management. It created the blueprint for the Enron culture and sowed the seeds of its demise. Enron and others of its ilk recruited big talent with fancy degrees for which they paid big money, neither of which is bad in and of itself. But betting all your cards on talent creates a fatal flaw. It fosters a culture that worships talent, forcing people to look and act extraordinarily brilliant.” Gladwell concluded that when people live in an environment that esteems innate talent, they have grave difficulty when their image is threatened.
The obsession with talent is driven largely by a fixed mindset. In other words, you must hire superior talent capable of leading the organization to greatness based solely on their innate talent, intellect, and pedigrees. Dweck’s work reveals that companies led by fixed mindset managers rarely approach greatness, and, if they do, don’t stay there long. Lee Iacocca, Al Dunlap, and Steve Case operating from a fixed mindset, while experiencing some success, ultimately drove Chrysler, Scott Paper/Sunbeam, and AOL Time Warner into very large mountains.
Companies That Operate with a Growth Mindset Do Better, Much Better!
When you enter the world of growth-mindset leaders, the world brightens, expands, and becomes filled with energy and endless possibilities. These leaders seem to set big, hairy, audacious goals and meet or exceed them time after time. Jack Welch, Lou Gerstner, and Anne Mulcahy transformed GE, IBM, and Xerox respectively by rooting out fixed mindsets and fostering cultures of growth and teamwork. They started with their beliefs in human potential and development – both theirs and others. These leaders reject royalty, hierarchy, and elitism, in favor of an inclusive, learning filled, rollicking journey.
Jack Welch took GE from a valuation of $14 billion to $490 billion. The man who created the most valuable company in the world was hailed by Fortune to be “the most widely admired, studied, and imitated CEO of his time.” Like other growth-minded leaders who learned from mistakes, Jack was not quite as evolved in his early days. He wrote an entire chapter in his book Straight from the Gut entitled “Too Full of Myself” about a time when he was on an acquisition roll and bought Kidder, Peabody, a Wall Street investment banking firm with an Enron style culture that cost GE hundreds of millions of dollars before being sold to PaineWebber. It was in part due to Jack’s realization that he was a flawed human being, prone to mistakes and errors in judgment, as well as the grace and understanding he received from his early bosses, that he became a grower and nurturer of people, and a mentor to countless CEOs and senior corporate leaders.
Steve Bennett, the CEO of Intuit, wrote in an op-ed piece for the NY Times, “I learned about nurturing employees from my time at GE from Jack Welch. He’d go directly to front-line employees to figure out what was going on.” A huge part of Jack’s secret sauce was that he spent very little time in his corporate office. He never stopped visiting factories and hearing from the workers. These were the people he respected, learned from and, in turn, nurtured. Fortunately for Jack, every time his success went to his head, he received a wake-up call; and, because of his growth mindset, he admitted his mistakes, learned from his missteps, kept growing personally, and was relentless about growing and developing others.
What Jack learned was this: “True self-confidence is the courage to be open – to welcome change and new ideas regardless of their source. Real confidence is not reflected in a title, a degree, an expensive suit, a fancy car, or a series of acquisitions. It is reflected in your mindset: your readiness to grow”. Jack learned more and more from his experiences about the kind of manager he wanted to be: a growth-minded leader – a guide, not a judge. When Welch was a young engineer at GE, he caused a chemical explosion that blew the roof off the building in which he worked. Emotionally shaken, he drove 100 miles to his corporate headquarters to face the music. When he sat in front of his boss, instead of the tongue lashing he expected, he received understanding and support. He never forgot it. “Charlie’s response to my costly mistake made a huge impression on me…If we’re managing good people who are clearly eating themselves up over an error, our job is to help them through it.”
A Growth Mindset Can Be Taught, and Everyone Wins as a Result
The singular realization that a growth mindset can be taught, and that transformational leadership does not require extraordinary intellect, talent, or pedigree, is a powerful insight all by itself. Jim Collins set out to discover what moved some companies from good to great and caused them to stay there. The one absolute key was the type of leader who in every case led the company to greatness. These were not the larger-than-life, charismatic types who oozed ego and self-proclaimed talent. They were normal people who never stopped growing, constantly asked questions, interacted regularly with frontline employees and customers, and focused on growing people.
These self-effacing leaders developed the ability to confront the most brutal answers – that is, to look failure in the face, including their own, while keeping their eye on the prize, and maintaining faith they would succeed in the end. Every one of the leaders chronicled in Collins’ work who led their companies to greatness had developed a growth mindset and realized the value in human development. They eschew trying to prove they are better than others, they don’t place undue importance on pecking order, they don’t claim credit for others’ contributions, and they don’t undermine others to feel powerful.
In this piece, we only had time to summarize the essence of Jack Welch, one of the three most transformative CEOs of the 20th century. Be on the lookout for upcoming posts and webinars for the express purpose of teaching how to develop a high-performance mindset. I sincerely hope this material has been helpful.