Growth mindsets have been popping up in classrooms, on sports fields and increasingly in workplaces since Stanford University psychology professor Carol Dweck introduced the concept in her 2006 book, Mindset: The New Psychology of Success.

Microsoft’s CEO Satya Nadella has extolled the virtues of a growth mindset and put it at the heart of the change he’s bringing to the tech giant’s corporate culture.

Microsoft’s annual hackathon is one example of a growth mindset in action. Employees with an idea, or a hack, are given a chance to form a team to develop a business plan and pitch it company-wide. Winners are given funding to develop their projects, and some move into leadership roles, even if previously they hadn’t been on a management career track.

CEO Satya Nadella takes part in the Ice Bucket Challenge at Microsoft's 2014 Hackathon
CEO Satya Nadella takes part in the Ice Bucket Challenge at Microsoft's 2014 Hackathon
Image: Scott Eklund/Red Box Pictures

So what is a growth mindset exactly, and why are companies trying to cultivate them?

People with growth mindsets believe they can develop their abilities through dedication, hard work, and learning from others and their mistakes. Brains and talent do have a role to play, but they’re just the starting point – the rest is up to them.

Those with fixed mindsets, by contrast, view talent as an innate gift: you either have it or you don’t. And they spend their time proving their abilities instead of working on them.

   Growth versus fixed mindset

People with growth mindsets achieve more than those with fixed mindsets, according to Dweck, who has been extending her work beyond individuals to organizations.

Research carried out by Dweck and three colleagues – Mary Murphy, Jennifer Chatman and Laura Kray – in collaboration with consulting firm Senn Delaney suggests that growth-mindset companies have more motivated employees and a more innovative, risk-taking culture.

Using a sample of employees at seven Fortune 1000 companies, their research looked at how a firm’s mindset influences workers’ levels of happiness, teamwork, innovation and ethical behaviour.

It also explored how it affects supervisors’ views of employees (they rated them as more innovative, collaborative and committed to learning, and were also more likely to say they had management potential).

The team found that employees in growth mindset firms had more trust in their company and a greater sense of ownership over their work.

They were also 34% more likely to feel a sense of commitment to the future of the company. In fact, employees of fixed mindset companies said they were more interested in leaving their company.

There was 65% stronger agreement from people working for growth mindset firms that their companies support risk-taking and 49% stronger agreement that they foster innovation.

“When entire companies embrace a growth mindset, their employees report feeling far more empowered and committed; they also receive far greater organizational support for collaboration and innovation,” writes Dweck in an article for the Harvard Business Review.

“In contrast, people at primarily fixed-mindset companies report more of only one thing: cheating and deception among employees, presumably to gain an advantage in the talent race.”