What Is a Growth Mindset and How Can You Apply It in Business?

What is a growth mindset?

A growth mindset is the belief that intelligence and abilities can be developed over time. Instead of assuming a person’s skills are fixed, a growth mindset recognizes that we can improve with the right environment and encouragement.

Dweck’s research helped illustrate this concept. When studying different types of praise in school, Dweck and her team found that praising effort over intelligence is more effective. Highlighting hard work encourages students to embrace challenges, persist through setbacks, and develop a stronger belief in their ability to grow. [Read related article: How Informal Feedback Can Improve Employee Performance]

Many people believe intelligence and abilities are innate and unchangeable. However, by focusing on their strategies, people can learn to adapt and achieve better results.

Growth mindset vs. fixed mindset

A fixed mindset is the opposite of a growth mindset. It’s the belief that intelligence, talent and ability are static traits — you either have them or you don’t. People with a fixed mindset tend to avoid challenges, give up easily, and see effort as a sign of inadequacy rather than a path to growth.

Whether you have a growth mindset or a fixed mindset affects how you respond to setbacks. Someone with a fixed mindset believes their lack of ability caused their failure, which makes them more likely to give up; they believe they don’t have what it takes to succeed.

In contrast, someone with a growth mindset believes they can improve their skills. When faced with failure, they’re more likely to adjust their strategy and put in additional effort.

This table helps illustrate the differences between a growth and a fixed mindset:

How to have a growth mindset and apply it in business

In a 2008 speech at Stanford University, Dweck highlighted how the growth mindset concept can be applied to business leaders. She argued that a growth mindset is critical to team development, achieving strategic objectives, and motivating employees. 

Dweck said leaders with a fixed mindset tend to “place greater value on looking smart and are less likely to believe that they or others can change.” In contrast, leaders with a growth mindset “place a high value on learning, are open to feedback and are confident in their ability to cultivate their own and others’ abilities.”

Andrea De Jager-Jackson, founder of Limitless Growth Partners, a coaching and culture advisory firm, has seen this firsthand in her clients. “Leaders who role model a growth mindset reward learning and curiosity, not perfection,” De Jager-Jackson explained. “They experiment, speak up and take smart risks. In contrast, fixed-mindset leadership often leads to risk-aversion, protecting the status quo, which slows innovation, prevents agility, and [impacts] the organization’s ability to deliver against customer and consumer expectations.”

In an article for the Stanford alumni magazine, Dweck explained more ways that fixed and growth mindsets impact a business. We’ll highlight those insights and explore four key ways to foster a growth mindset in your business. 

1. Accept mistakes.

In the article, Dweck discussed the collapse of Enron and how the company’s culture was obsessed with talent and intelligence. This focus pressured employees to lie about and conceal company problems. No one wanted to admit to any type of failure because mistakes were seen as unacceptable. 

In contrast, businesses that adopt a growth mindset cultivate an environment where mistakes are viewed as opportunities to learn from failure. Instead of trying to hide mistakes, team members can openly acknowledge them and take steps to improve. 

Daniel Olexa, founder and leadership development coach at Transcendant Living LLC, explained that organizations with a growth mindset have the freedom to be curious and embrace the unknown. “They’re willing to take risks, knowing that perceived failure is actually just feedback for navigating forward,” Olexa noted. “They also recognize that if mistakes are not being made, new territory is not being explored.” 

In other words, a growth mindset in business means embracing “failure” as feedback. “What can you learn from a perceived setback? How can that help you move forward more effectively and efficiently?” Olexa added.

Paul Robson, a serial entrepreneur, investor and business consultant, believes that mistakes can lead to magic. “There’s a well-known phrase that states, ‘I’ve failed over and over, that’s why I succeed!’ Society has overlooked that mistakes are no different,” Robson said. “[To] get it right, it may take a few mistakes along the way.” 

Sally Zimney, author, business coach, and keynote speaker on mindset and confidence, emphasized that repetition and experience lead to competence — but with inexperience, mistakes are inevitable. “We have to learn those skills by doing, which is the harder path, but much more efficient. So, we often learn in public, learn through failure, and learn by first flopping — and then getting better, little by little,” Zimney noted. “The key is not avoiding the tough (sometimes embarrassing) challenges. The more you learn by doing, the faster you’ll improve.”

2. Focus on skill development.

Business leaders with a growth mindset are more likely to invest in employee training and establish professional development opportunities for their teams. This focus on skill development is far more likely to produce engaged, effective team members than just checking off boxes on a typical performance review or legacy performance management system.

In contrast, Dweck found that employees of fixed-mindset organizations were more worried about failure than those in growth-mindset organizations. This led to an influx of cheating, secrecy and cutting corners. These employees were also less committed and didn’t trust that their company had their backs.

Dweck and her team observed these ideas in action in organizations that adopted a growth mindset. For example, in these companies, supervisors were significantly more positive than those in fixed-mindset companies. They rated their employees as more collaborative and innovative.

Katie Manasse, director and executive coach at Sea and Sky Coaching and Consulting, emphasized the importance of not developing a fixed mindset about your team members, especially in fast-paced workplaces where the work always feels urgent. 

“If you, as a leader, have a growth mindset, you are more likely to foster this in your team,” Manasse explained. “Providing opportunities to develop skills gives team members healthy challenge and agency, and encourages honesty about what skills they feel they want to develop.”

3. Celebrate effort, not talent.

Recalling her experience with former English Premier League champions, the Blackburn Rovers, Dweck noticed that some young athletes avoided practice because participating was seen as a sign that they lacked natural ability. This reflected a British mindset that viewed star athletes as born, not made. So if you trained hard, that must mean you weren’t truly talented.

Dweck found that this mindset hindered the team’s development and recommended that the club prioritize continuous improvement over innate talent. 

This idea also translates to the business world. For example, instead of only placing high value on those who appear naturally gifted or produce immediate results with minimal effort, praise and value team members who consistently work hard to develop their skills.

In other words, shift your focus away from praising inherent talent and quick wins toward effort and persistence. This way, your organization will cultivate a growth mindset culture that fosters long-term success, not just short-term gains. 

Olexa pointed out that many high performers in sports — and in business — succeed because of discipline and dedication, not just natural ability. “Tell a young Michael Jordan or Steph Curry that they weren’t born with the skills to be a champion, and you would lose. Their training regimens, their intense practice schedules and their dedication to greatness are the epitome of champions being made, not born,” Olexa said. “This ‘British mindset’ does not allow for growth and ultimately defines both an employee’s potential, as well as the company’s, by what they’ve done before.”

Jonathan Logan of Greenlit Growth Strategies echoed the risk of overvaluing perceived talent at the expense of real potential. “Believing greatness is something you either have or don’t have creates a ceiling on potential,” Logan cautioned. “In business, like in sports, those who train with purpose will always outperform those who rely on natural ability alone.”

4. See challenges as learning opportunities.

Dweck’s research revealed that people with a growth mindset approached difficult tasks in a unique way. For example, she saw that elementary school children who viewed setbacks as temporary and useful performed better in the long term than those who saw them as a form of personal failure.

She cited one boy who enthusiastically approached difficult problems by saying, “I love a challenge.” He reframed setbacks as puzzles to solve rather than a sign of his inability. At such a young age, he clearly exhibited a growth mindset.

In the business world, this means normalizing the idea that a current inability to overcome obstacles is an opportunity to grow, not a sign of incompetence. Encourage your managers to discuss challenges openly in meetings, labeling these potential setbacks as valuable opportunities to experiment, innovate and gain an advantage over competitors.

De Jager-Jackson put it this way: “When challenges are framed as opportunities to grow rather than problems to avoid, employees shift from fear to creativity and ownership. It changes the internal dialogue from ‘I’m failing’ to ‘I’m learning.'”

The benefits of having a growth mindset in business

Here are a few distinct advantages you’ll gain when you apply a growth mindset to your business operations: 

• Better outcomes during challenges: Every business faces obstacles, including hiring challenges, expansion issues and accounting challenges. However, a company with a growth mindset views these difficulties as opportunities for growth and improvement.
• More innovative problem-solving: If you and your employees are stuck in a fixed mentality, it’s hard to think outside the box and find creative solutions. A growth mindset fosters a culture of experimentation and idea-sharing, helping your business stand out from the competition.
• Continuous learning: People with a growth mindset understand they’re never done growing. They seek out new learning opportunities for professional growth, which helps your company avoid complacency and stay competitive.
• Greater accountability: A company with a growth mindset encourages a culture of ownership. Employees take responsibility for both successes and setbacks, viewing everything as part of the learning process.

How leadership drives the growth mindset

Tee Gwena, a managing partner at Transora Partners — a firm that works with entrepreneurs seeking an exit strategy — emphasized that leaders who adopt a growth mindset are more likely to build valuable, scalable businesses. “They view each challenge that may arise as an opportunity to level up, a problem to solve that, once solved, can unlock the next level in the business’s lifecycle,” Gwena explained. “If it hadn’t been for that approach, they wouldn’t have built up a business others want to buy.”

Business owners and managers can incorporate a growth mindset into their leadership style by promoting continual learning, accepting mistakes and focusing on maximizing employees’ potential. 

Focusing on your team’s capacity for growth is essential to successfully implementing a growth mindset across your organization. To get started, consider these mindset and operational shifts:

• Promoting from within instead of seeking outsiders
• Recognizing every team member’s unique potential
• Valuing a passion for learning over someone’s credentials or past accomplishments 

This kind of focus on internal growth can give your business a major advantage over one that settles for maintaining its current talent level.

Introducing a growth mindset into your business

Changing a workplace culture from a fixed to a growth mindset can feel overwhelming, especially when you’re facing resistance to change or worries about being second-guessed. But when it’s done right, the payoff is well worth it. 

Consider the following tips to help you in this transition: 

• Ensure leadership team buy-in: Gwena emphasized that a growth mindset begins at the top, necessitating genuine buy-in from the leadership team. “If there’s buy-in at the top, everything else becomes much easier downstream,” Gwena explained. “Back that up by putting in place systems to ensure success and growth are publicly acknowledged and rewarded.”
• Show your team a promising future: Zimney noted that organizations must back up all the talk of learning possibilities and growth with actual rewards and opportunities. “As leaders, your job shifts from ‘This is who you are’ to ‘This is who you could be if you wanted,'” Zimney said.
• Reframe failure: For Olexa, the leading cause of “failure” is metrics. “While we’ll never hit a marker we don’t set, sometimes it takes longer to reach it than we anticipated,” Olexa explained. “Therefore, businesses should treat missed targets as signals, not verdicts. Use them to re-evaluate timelines, sharpen strategy or offer support, not to assign blame.”
• Welcome fresh perspectives: While hiring from within is a great way to demonstrate a growth mindset, Gwena noted that some longtime executives may balk at such a drastic change. In these cases, it may be time for new blood. “In some cases, introducing new members into a leadership team who have operated and grown larger businesses than the target is the best solution,” Gwena said. “Their energy and perspective often can be very contagious.”
• Make learning part of your daily routine: Logan believes the key to introducing a growth mindset is praising employees’ effort and improvement. “Share lessons learned in team meetings. Train leaders to coach instead of control,” Logan advised. “Most importantly, build a culture where ‘I don’t know yet’ is not a weakness but a starting point.”

Jamie Johnson contributed to this article.