Children with a growth mindset rebound more quickly from failure and get higher grades. Athletes with a growth mindset (like Michael Jordan) have greater perseverance and achieve better performance. Organizations with a growth mindset show greater levels of trust and engagement and a stronger culture of innovation.

In today’s competitive, fast-changing, and disruptive market environment, fostering a company-wide growth mindset is critical to your company’s success. Companies like Microsoft and LinkedIn are investing to instill a growth mindset in order to stay at the forefront of their industry. Why? Research reveals that companies with a growth mindset achieve greater levels of trust, employee engagement, and a stronger culture of innovation.

Science Behind Growth Mindset vs. Fixed Mindset
World-renowned Stanford psychology professor Carol Dweck started her groundbreaking work on mindsets while studying children’s attitudes about failure. She noticed that some students rebounded, even thrived in the face of failure, while other students seemed devastated by even the smallest setbacks. Through her research and in her book, Mindset: The New Psychology of Success, she coined the terms “fixed mindset” and “growth mindset” to describe the underlying beliefs people have about learning, intelligence, and talent.

In a “fixed mindset”, people believe that their intelligence and talents are qualities they either have or don’t have (ie. they are born with or without). As a result, when faced with a challenge, individuals with a fixed mindset are more likely to give up because they believe there’s nothing they can do to overcome the challenge. In a “growth mindset”, people believe that their talents and intelligence are qualities they can learn. They are more open to feedback and believe that hard work, effort, and persistence will make them smarter and help them develop the talent and skills needed to overcome any setback. Result? They are more likely to take on new challenges, experience greater motivation, and achieve greater success over time.

Scientists measured the electrical activity in the brain as students confronted an error. Fixed-mindset students show very little activity. They avoid the error. Growth-mindset students engage deeply with the error – processing, learning, and correcting it.

Most importantly, Dr. Dweck’s research shows that it is possible to change a person’s mindset from fixed to growth with the right interventions. This has massively changed the way teachers motivate students to learn and improve, how coaches train their athletes to win, and now, how organizations can profit by cultivating a growth mindset.

Can an organization, like an individual, have a fixed or growth mindset? If so, what impact does this mindset have on the organization and it’s employees?

In a two-year study of several Fortune 1000 companies, Dr. Dweck and her team found that organizations also have a mindset. Companies with a fixed mindset fostered a “culture of genius” where “star” workers were highly valued. This type of organizational culture believes that employees either have it or they don’t when it comes to their skills and learning capabilities. On the other hand, growth mindset companies cultivate a “culture of development” based on the belief that employees can grow and develop new skills in an environment that values hard work, feedback, and continuous learning.

Outcome? Employees in growth mindset companies are 47 per cent likelier to say their colleagues are trustworthy. They are 34 per cent likelier to feel a strong sense of ownership and commitment to the company. Moreover, they are less worried about failing and more willing to take on innovative projects, with 65 per cent expressing stronger agreement that their company supports risk-taking.

So what can you do to develop a growth mindset organization?

Three Things To Do (to foster a growth mindset company)

1. Hire for Coachability, Work Ethic and Love of Learning
Fixed mindset companies hire for ‘star power’ emphasizing prestigious university degrees, brand name company experience, and proven talent. Growth mindset companies hire for people with a love for learning, who are open to feedback and criticism, and who value and embody a strong work ethic.

So how do you identify growth mindset candidates? Here are some interview questions you can use:

Going to the Next Level: “In order to get to [insert job position one-level up], what do you think you’d have to change?” Dr. Dweck used this question to help an MLB team identify growth mindset amongst prospective draftees. What they were looking for were people who acknowledged that they’d need to improve many of their skills, demonstrating an understanding that abilities can be developed and learned.

Dealing with Failure: Start by asking about a specific situation where they failed at an important task, like “Tell me about a time when you failed at an important project/task”. Tim Power, an ICF certified coach and founder of TalentPowered, recommends diving into the awareness, learning, and actions of the candidate after their experience with failure.

“Encourage the mindset of the candidate to shine through by asking “What did you become more aware of?” followed by “What did you learn from it?” says Power. “Lastly, don’t forget to confirm their learning resulted in a behavior change by asking “What have you done differently based on what you’ve learned?”

The goal is to see whether they take responsibility for their mistakes and what they gained from that failure. What you’re looking for is a readiness to learn, apply, and share credit.

2. Recognize Effort and Process—But Don’t Forget About Progress
When Dr. Dweck and her colleagues studied the effect recognition had on student mindset, they noticed that students praised for their intelligence and ability (e.g. “Great job! You’re so smart!”) avoided challenges later on in favour of likely success and cited performance (e.g. looking smart) as their primary goal. Comparatively, students praised for their effort and process (e.g. “I like the way you tried all kinds of strategies on that math problem until you finally got it.”) exhibited more challenge-seeking behaviour and cited learning goals as their primary motivator.

Likewise, recognition plays a vital role in fostering a growth mindset in the workplace. Rewarding for effort, strategy, focus, perseverance, and progress will result in greater motivation and resilience in the face of difficult challenges. Critical here is to avoid the misconception of recognizing for effort regardless of progress. Unproductive effort is never a good thing. This approach to recognition can be applied from the way you recognize team members on a day-to-day basis, to more formal processes such as your OKRs, performance management, and goal-setting.

3. Build a Feedback Culture
Growth mindset individuals value feedback as a way to boost self-development. Growth mindset companies thrive on feedback to enable continuous reflection, learning, and growth. So, building a strong feedback culture at the individual and company-wide level is a key factor in creating an environment that supports growth mindsets.

Individual-level: As the leader, it starts with you. You need to be a role model by openly asking for feedback about yourself. Listen to this feedback and learn from it. Next, encourage employees to ask for feedback from you. Be cognizant of the language you use in giving feedback. Focus on process, strategy, focus, perseverance, effort, and improvement vs. mistakes, inadequacies, and “lack ofs.”

Company-level: When asking for employee feedback about your company, there are certain factors you can measure that will tell you whether you’re building a growth mindset company. These factors include ‘Psychological Safety’ (the belief that you can take risks and make mistakes without feeling insecure or embarrassed), ‘Learning Development’, and ‘Feedback’.

Jane Chung is the CEO of Perked! (www.perked.co), a company powering #PeopleFirst leaders with data-driven insights into your organization’s high-performance culture. She is one part entrepreneur, two parts geek and three parts adventurer.