Implement a Growth-Driven Business Mindset for 2021
After almost a year of pandemic-related upheaval, many business owners have taken their eye off the ball. An understandable offense given the stubborn severity of the COVID-19 pandemic. But businesses still need to market, consumers need to buy products, and there are repairs and capital improvements to be made. With the promise of vaccine availability on the horizon, it’s an ideal time to regroup for 2021. To have the best chance at success, companies need to adopt a growth-driven mindset, while continuing to focus on efficiency.
A growth mindset can be explained as a formula adding equal parts optimism and education, then promoting these beliefs throughout the organization. Although the goal is clear, it is obviously incompatible with the “circle the wagons” mindset dominating much of 2020. When businesses operate with a growth mindset, they seek challenges and embrace failure as a positive part of the learning and growth process.
Here are four ways to promote a growth mindset across an organization:
- Praise Growth and Performance
Everyone celebrates a good performance, like the salesperson who lands the big deal, but this is only half the equation. Be sure to praise employees who innovate, demonstrate the most improvement, and bounce back from failures with a vengeance. Identify personal growth and celebrate it!
- Reward Failure
This is counterintuitive, but punishing failure discourages innovation. Risk-taking is part of life, and failures help pave the path forward. Employees need to use their brains, but if they believe thinking will result in punishment or embarrassment, all will be content to hide in their cubes (or home offices, as the case may be). This culture will lead to dire business consequences.
- Be Open-Minded
Managers have been guilty of “judging books by their covers” since employees were invented. Don’t do it. Encourage everyone to contribute and you might be surprised who offers the next great idea. Morale will increase as well, and in today’s environment, boosting morale (without paying for it) is a huge win.
Listen and Be Tenacious
Part two of being open-minded is listening. Shutting down debate sends the same message as punishing failure. People learn over time to avoid pain, so if you discourage debate, you won’t get any. A room of nodding robots won’t bring you new customers or launch new products.
Pursue these four methods with tenacity in order to promote a company-wide growth mindset.
- But Don’t Forget Costs
Successful organizations often display a strong growth mindset and focus on creating efficiencies. Any company’s biggest expense is people, and people (like machinery) need ongoing maintenance. If employees are optimized, efficiency can also be optimized, reducing costs at a time when every dollar counts. Here are several areas where motivated employees will save companies money.
- Automating Processes: Mention automation to employees and the reaction is often a collective eye roll, but that is reflection of morale. Staff who feel recognized and rewarded will rise to this challenge, with the others seeing only a sure path to layoff. For 2021, the processes most ripe for automation are invoicing, billing, and collections. Most small businesses still rely on some manual processes for these functions. Automation will free up employees for more critical concerns like client service.
- Fraud Reduction: Automation reduces the opportunity to initiate fraud and makes it more detectable. Most fraud originates in the accounting department, and more than 90 percent of fraudsters have no criminal records. Employees who believe in the organization and in their ability to contribute will not steal from their employers.
- Cash Flow Management: Automating accounts receivable, accounts payable, and collections will enable more precise cash management and increase the availability of funds. Ensure that staff understand how automation benefits the organization. Promoting a growth mindset will help instill company-wide incentives to boost cash flow. Remember, more than 80 percent of business failures result from poor cash management.
Let the Managers Manage: If previously manual, tedious processes are automated, a number of important corporate benefits will result. Perhaps most critical is saved time—with these somewhat routine issues removed from their plates, executives can use their time to strategize on how to grow, more effective pricing, staff needs, new markets, and more. This—rather than figuring out how to get bills paid—is what executives should be doing.
By promoting a growth mindset, business leaders encourage employees to learn, improve, and contribute. It is surprisingly easy to see how a series of small improvements can quickly impact the bottom line. For example, take any company with a 90 percent margin, improve productivity by just 10 percent and profit doubles. This would be a great forecast for any company in 2021.
Written by Stephen King.
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