During uncertain times a normal human reaction is to pull in the reins and wait out the situation. During the current pandemic with so many differing opinions as to how things will play out the strategy of hunkering down seems quite logical. But, if you want your company to emerge from this period stronger and more profitable, then build your growth mindset instead. Companies that rebound quickest from recession are those that plan and act with the now and the future in mind.
Fixed Mindset
The idea of a Fixed Mindset versus a Growth Mindset was advanced by noted psychologist Carol Dweck. A Fixed Mindset suggests that your abilities are predetermined and cannot be changed in any meaningful way. In the Fixed Mindset businesses feel threatened by certain situations. They see limitations caused by circumstances beyond their control. Waiting out the storm is seen as the wise choice, even if the ship is sinking. Always play it safe. Budget items such as advertising, which lead to sales and growth, are now expendable.
Growth Mindset
The Growth Mindset believes that our skills and abilities are not predetermined, they can always be improved. Each situation is a starting point, not the end. Businesses in Growth look to advance no matter the circumstances. Learning is valued. They find opportunities and prepare for growth so that when things do improve, they are positioned to capitalize.
Companies with a Growth Mindset have a number of common characteristics. Usually these attitudes and behaviors start from the top down. They all encourage learning. Continued learning leads to innovation. Instead of staying stagnant, growers pick up new ideas and are willing to try new things. With innovation comes risk. Growth companies will accept some risk, and the possibility of failure, to find new more efficient ways to operate.
Companies that emerge from challenging times and achieve the greatest success are usually those who have adopted a Growth attitude. They have put a plan in place to adapt to the current environment while imagining what the future will look like and building a business to succeed when that time arrives.
Recession Planning
A Harvard Business Review study found that the companies who did the best after the recessions of 80’s, 90’s and 2000’s had adopted a Growth Mindset. In fact, their studies show that only 9% of businesses monitored survived and actually grew coming out of a downturn, 80% failed to achieve their pre-recession levels within 3 years, and 17% failed altogether.
There were some common actions of the 9% who thrived. First, they did not cut staff but maintained or increased staff. It sent a message to employees and customers that the business was committed to success. In turn, this motivates the staff to be more productive. Instead of saving by cutting staff operations were streamlined. When prosperity returned they had the personnel to handle growth.
Second, they did not cut their marketing budgets. As competitors reduced or eliminated marketing, growth companies stayed the course, and increased their share-of-mind. They conveyed the message to consumers that they were market leaders, who would be around for a while. Instead of expensing their way to profit by cutting items like marketing these companies looked for efficiencies in other areas as a way to save money.
Finally, they invested in assets or business strategies that would sustain long-term growth. Some growth companies found ways to reduce the cost of their products or services. Others were able to increase output without additional personnel.
Build Your Growth Mindset
Any business that wants to meet goals and objectives, set new ones, and keep moving forward needs a Growth Mindset. Believing in your businesses’ ability to reinvent itself, reinvigorate and rise during uncertain times is an invaluable position. It allows the organization to determine when a new “normal” will return and what it will look like. A growth mindset will move your business forward and position your business, its brand, and its people for growth, profit, and success. How will you build your growth mindset?
