How to build organisations with a growth mindset

There has been much attention over the years on how the LEGO Group works with its super fans. The open innovation and crowdsourcing stem from a product that is not a toy but a creative medium. The mindset that underpins success is critical.

Unrecognised beliefs govern much of our lives

Gandhi's quote is a perfect illustration of the powerful impact beliefs have on our lives:

Your beliefs become your thoughts.
Your thoughts become your words.
Your words become your actions.
Your actions become your habits.
Your habits become your values.
Your values become your destiny.

Beliefs are part of Mindsets, which include habits and behaviour. They become magnified when we form organisations. Mindsets are powerful because we spend so little time observing or questioning them in ourselves or even in those around us. Most of the time we operate on autopilot, and mindsets affect the choices we make, far more than we realise.

Carol Dweck has identified two mindsets that radically shape our outlook and approach. The Fixed mindset believes we only a fixed amount of intelligence or talent for a given thing. Our fear of failure makes us reluctant to try new stuff.

The growth mindset believes intelligence or any skill is a muscle we can develop. We are more open to challenges because we want to get better, and we relish in practice. Dweck found that these mindsets show up in children as young as five. How we treat children at home and in school makes a big difference. And by the time we have grown up, we may have internalised these so fully we don't even realise.

Mindsets influence our attitude to power

One way the Fixed mindset manifests in an organisation is in how we understand power. Here power is like a currency. It is something you collect and hoard. Feedback and participation from communities is a threat.

The fixed mindset is also behind the belief that machines are efficient, and humanity is not. It is what gave birth to bureaucracy in the 19th century. It aims to remove all things human in favour of standardised, controlled processes to make human behaviour as predictable and machine-like as possible. And it was a solution in a world where work was physical. Our world now is volatile, uncertain, complex, at times, chaotic and above all, ambiguous. More grunt work will not help us, but creativity and knowledge might.

This fixed mindset is what stands between us and the type of innovation and change we need to master in the future. The average lifespan of big companies has come down from 61 years to 18 in the last 40 years. McKinsey predicts that by 2027, 75% of the companies listed on today's S&P500 will have disappeared.

Organisations with fixed mindsets are less resilient, inventive and inspiring. People inside them are chafing against the rigid bureaucracy and trying to adapt to the dynamic and disruptive environment around us. What we need are flexible, resilient and creative organisations with room for growth of people within them to grow the bottom line.

Growth Mindset and New Power

A growth mindset looks at power in a very different way. Here power is more like a current. Like water or electricity. It is about channelling it rather than controlling it. The power is in the surge, orchestrating the action of many.

Power is informal, self-organising and open to collaboration. The growth mindset believes good ideas come from anywhere and is resilient, adaptive and innovative. It thrives on values that unite and on solving the bigger problem.

We need a growth mindset. Not only to make innovation happen. But to create more human, purposeful and resilient organisations. So how do you embrace a growth mindset in your organisation? What are the obstacles and how do you overcome them?

Obstacle 1: The Inward looking nature of any company

Large companies need a continuous input of more and more management energy to remain in existence. You can trace it back to the second law of thermodynamics. All closed systems lose energy and thus need a continuous energy intake to subsist. In short, large companies spend more time managing themselves than their clients.

When you are in this situation, it is almost second nature to adopt an inward-looking vision. When the LEGO Group was heading for a crisis in the early 00s, an inward-looking vision was also part of the problem. To "become the biggest brand among families with children" was not useful. Being big is a vanity metric. It doesn't add any value to consumers.

What is your organisation's genuine value add? What would the world miss if you weren't here? We discovered ours by asking kids, fans, customers, employees what they would lose if LEGO weren't here. It wasn't the theme parks, clothes or video games. Instead, it was the LEGO Idea that people mentioned. The impact of playing with LEGO bricks on your creativity and imagination.

From that, we developed our mission to inspire and develop the builders of tomorrow. It is a true outside-in purpose, a job that is never finished. And it is not about us. Having a purpose like this enables us to stay true to our communities and to work with them to reach our mission.

Solution: adopt a noble purpose that is outside-in. Simon Sinek calls it the infinite game.

Obstacle 2: Trying to control your customers

Another challenge is dealing with the many stakeholders, consumers and customers. This graphic illustrates how people often deal with diversity.

It makes me smile because many companies also use the same approach with customers.

The answer is not controlling but a partnership. Seeing customers as partners in mutual value creation is a new kind of relationship. Relationships that give consumers more than products and companies more than money. And it is already happening. Consumers no longer only consume. They are active, engaged, playful and creative, also entrepreneurs and critics. And their impact has increased hundredfold. Connectivity shapes products into services, relationships into networks and communities into cultures.

One example of how the LEGO Group works with communities and learns from them is LEGO ideas. LEGO Ideas is a crowdsourcing platform where anyone can submit an idea for a set we should make. The platform helps us tap into different communities that have an interest in common. Communities who may not have thought they had LEGO in common too.

People suggest ideas and have to get 10000 votes for their design before we review it. That means that on any day, there are hundreds of social media campaigns all over the internet. Each is promoting LEGO and trying to get people to vote for these projects. A fantastic example of not only crowdsourced innovation but crowdsourced marketing.

Solution: Include everybody! More inspiration in Henry Timms and Jeremy Heimans' book #NewPower.

Obstacle 3: Old ways of doing things

Examples like LEGO ideas shows the power and creativity of our communities. To have a company that is open to creativity starts with being open to it inside the company.

Creativity is our genuine superpower. It is the ability to generate innovative and workable ideas. And be flexible and connect unrelated things in new ways and problem solve. Creativity determines personal, academic and professional success. More than any other skill or ability. But why?

It is because creativity is the driving force for adaptability and change. It both creates change and helps us adapt to change. This ability helps us reinvent ourselves, what we know, what we do, and who we are, over and over again. And it is a skill we can learn and continue to develop throughout our lives.

Organisations that have plenty of creativity can adapt and thrive at the speed of change. Moreover, nurturing it inside helps to deal with it outside the company.

Solution: Nurture Creativity within and beyond the company!

Obstacle 4: Lack of Support from Leadership

Many people talk about how difficult it is to create change. That everything would be fine if only the CEO would be on board. That suggests a more fundamental problem of how we look at leadership.

This way of thinking has its roots in the concept of the leader/follower. Followers are passive and only act when they receive orders from leaders. It is a complete anathema in a #NewPower, networked world:

  • First, the leader/follower way of operating is far too slow to react.

  • Second, It excludes the best ideas because thinking gets done by people further removed from the problem

  • Third, people continue to repeat what worked before (even if it is redundant!) rather than explore new ways of doing things. That means learning is slow, and the fixed mindset prevails.

So we need to change this if we are serious about a growth mindset and about evolving our organisations. In simple terms, the problem is the tendency to look at leadership as a role. Not an act. Not something you do, but something you only do when you have the title.

At the LEGO Group, we decided to change this. But to do it we couldn't do it as a top-down exercise. Instead, we tasked a diverse group of people from all over the organisation to tell us: What is leadership at the LEGO Group?

And they came back with the idea of the Leadership Playground. That leadership is not a role, but something you do. Everyone has leadership responsibility for the LEGO Group. It's about diversity and individuality. It starts with creating a safe space – like the playground is a safe space for children. And great leadership is simple. It energises all involved. Not only through big gestures but through words and behaviours. A simple statement summarises this way of thinking:

Create the space so that everybody feels energised every day

And to do that relies on three behaviours:

  • being Curious, which gives birth to creativity and inclusion

  • being Brave to do the thing we haven't tried before, to open ourselves up to the growth mindset, and

  • to Focus on prioritising, stick with what we agreed and get it done.

Solution: Inspire leadership at every level

Obstacle 5: Fear of Failure

The last obstacle for embracing the growth mindset is the fear of failure. The way to get around this is to reduce the stakes and open up to experimentation. Eric Ries, the author of The Lean Start-up, talks about prototyping and testing our hypotheses early and often. Yet somehow this thinking can end up in projects only. We think that we first need a project so we can do some experiments. This approach is backward.

We wanted to transform the organisation from a fear of failure (fixed mindset) to a growth mindset. To embrace experiments as a way of life starts with lowering the threshold for starting. Make experiments part of every working day. And make every person do several per person per day.

As part of the Leadership Playground, we introduced the idea of missions. They involve trying something, capturing the learning and iterating as individuals and in teams. Missions range across many topics. They can be as small as how we structure our working day, how we run meetings, how we try doing something different.

To create a lasting change, we also had to re-think how to introduce the Leadership Playground to the organisation. The usual top-down roll-out plan wouldn't do. We wanted to create a movement.

So we trained a person in every team in the company to be a playground builder. A facilitator who is not the boss, but a team member, who supports the journey of each team member as they take on missions and practice the three behaviours. This approach is about creating change in the #NewPower way, not by controlling, but by channelling the energy and creating a surge.

Solution: Embrace experiments as a way of life. More inspiration on testing for innovation in Eric Ries' book The Lean Startup.

Conclusion: Growth Mindset as the foundation for People Innovation

Having a growth mindset as an organisation breeds resilience, creativity and innovation. It helps to adapt to the new power world, working with an ecosystem and evolving in lock-step with it. It is the key to staying relevant in a disruptive world. I call it people innovation. To develop the architecture, leadership, learning, development and culture of companies to unlock innovation capability in all.

Microsoft's Satya Nadella has managed to shift Microsoft into a growth mindset. In the process, innovation has increased, and learning has replaced being a know-it-all. The organisation is now closer to founder Bill Gates' original vision than it has been for many years.

When you focus on a noble cause, that is 'outside-in' you inspire people within and beyond the company. Making leadership the responsibility of all builds not only empowerment but emancipation. Curiosity, bravery and focus bring about greater inclusion, creativity and experimentation.

These behaviours, in turn, connect leadership, innovation and value creation in the organisation. They sharpen external sensing, spotting trends and discovering changes in the industry landscape. It makes the company more responsive to consumers and their needs. And it becomes faster and more agile in responding. Companies that succeed look beyond winning in their industry or over their competitors. They play the infinite game. They continue to reinvent themselves, what they know, do, and who they are.

And we must all do it to stay relevant in a volatile, uncertain, complex, chaotic and ambiguous world. In such a world, thriving depends on the ability to evolve at speed. Speed in sensing the opportunity and adapting to it while remaining true to who you are and what you stand for.