Nimble, Focused, Feisty. Sara Roberts
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is a buzzword and many organizations have enlisted innovation-expert leaders to “drive innovation in the organization” or developed venture-capital wings to seed innovative startups that might strike it rich someday. But that kind of innovation, while welcome, seems divorced or separate from the inherent operations of the company. It may be the worst form of window dressing—the high-tech equivalent of diversity initiatives that don’t truly address diversity needs.
Is 10 percent really enough if Google truly believes in the possibility that moon-shot innovations could change its business and transform markets? Well, Google, as I’ve said, is not averse to using money smartly. It has no desire to throw money wastefully against the wall like a handful of wet spaghetti to see what sticks. It believes that the “cost of experimentation and failure has dropped significantly”14 but also that smaller bets combined with deliberately limited resources forces ingenuity because “creativity loves constraints.”15
At the same time, however, the Google mindset, strongly reinforced by Page and Brin at every opportunity, is always to think big. And not just big, but BIG. Google people talk routinely about “10Xing” their jobs and projects—considering how the project, idea, or launch can produce not just incremental results but results that are ten times what is currently happening. Possibility first. Profitability follows. And in a way, this mindset inures Google to the risk of failure. Because the moon shots are not enormous bets, and because they are aligned with thinking big, there is always limited harm and some good to come out of them. As Page puts it, “If you are thinking big enough, it is very hard to fail completely. There is usually something very valuable left over.” And Google makes sure that everyone knows failure is not an executable offense; failure is to be rewarded and reinforced because it is the only way that gold can be discovered.
This way of thinking is drastically different from the way organizations have traditionally operated. For decades, big companies have had a sharp focus on the bottom line. They strive to maximize quarterly profits, bump up shareholder value, exploit earnings potential, and hit targets and bonuses. Profit maximization has become so entrenched in our way of thinking that we rarely question it, let alone strive to change it. This approach sets up a debilitating construct that can cripple a culture. After all, companies reward and promote those who deliver the best results—executors who can maximize earnings and cut costs—leading to a senior team with a financial-first focus.
In contrast, an orientation toward possibility, or what Carol Dweck, a professor of psychology at Stanford University, calls a “growth” mindset, leads to a very different kind of culture, one that embraces employee empowerment and customer focus. Cultures that embody a “fixed” mindset in which potential is seen as limited are more typical of traditional twentieth-century organizations.
In her research, Dweck and her colleagues asked a diverse set of employees at seven different Fortune 1000 companies whether they agreed with a number of questions. For example, “When it comes to being successful, this company seems to believe that people have a certain amount of talent, and they really can’t do much to change it.” High levels of agreement indicated the company had a relatively fixed mindset, while low levels indicated a growth mindset. Dweck and her team then sought to understand how the organizational mindset influenced employees’ beliefs and behaviors, things such as workers’ satisfaction, perceptions of the organizational culture, levels of collaboration, and innovation.
The results proved that the organizational mindset had a dramatic impact on employee perception. Employees at fixed-mindset companies often expressed less commitment to their companies, thought their companies didn’t “have their back,” and indicated that a handful of “star” workers were highly valued at the organization. These employees were less innovative and collaborative, worried more about failing, and often kept secrets and cut corners.
Growth-minded companies had a more optimistic outlook. Supervisors took a more positive view of their employees, rating them as being more innovative, collaborative, and committed to learning and growing. They saw more management potential in their employees.16
Employees at fixed-mindset companies often expressed less commitment to their companies, thought their companies didn’t “have their back,” and indicated that a handful of “star” workers were highly valued at the organization. These employees were less innovative and collaborative, worried more about failing, and often kept secrets and cut corners.
My point is that inculcating a strong organizational way of thinking around possibility (growth) over profitability (fixed) is critically important to organizational success. It not only affects your strategy and approach, but it actually determines the way your people view your company and one another.
Coming from a fixed view—that what we do as an organization leads to a certain range of profitability and must be pursued in order to drive incremental levels of growth—is exactly the wrong approach. NFF companies come from a different starting point. They ask, “What can I make that my customer/user really wants or needs?” By leveraging that growth orientation they create cultures that are positive, engaging, innovative, and supportive. And the money follows.
MINDSET #3: HUNGRY AND “OUTROSPECTIVE”
That imperative to focus on customers and users is actually the driver for the third mindset of NFF companies. Organizations with feisty cultures are “hungry and outrospective” by nature.
What does it mean to be outrospective? Well, I made up the word, but I think you can guess the definition. The perspective of an outrospective company is outwardly directed rather than inwardly focused. What’s outside your company worth looking at? Why, your customers and users, of course. Unlike your employees or, to some degree, your partners and suppliers, customers and users are largely free to buy your services or not. (Unless they’re locked into service agreements—hello, wireless carrier!) So it helps to know what they are interested in, or value, desire, like, don’t like, need, or don’t need.
The other thing that’s outside your company is the world. Interesting things happen there sometimes, occasionally having an impact on what you do and how successfully you do it.
Most companies are inwardly focused. This means that they are predominantly worried about meeting their own internal needs, not the needs of customers, and they are more curious about their own internal processes than they are about what’s going on in the world. How do we know this? Listen in on a meeting. Even if someone brings up a customer concern—let’s say the product doesn’t do everything the customer needs it to do—the response of the company is to filter that complaint through the capabilities the company already has in place, which can be incrementally improved upon as a way of “doing something” to solve that challenge. And if—minutes before the meeting—everyone just learned that the world has fallen apart or aliens have landed in spacecraft, the only relevant question that will get raised during the meeting is likely to be: How do we find a way to continue business as usual?
Often leaders of such companies talk about having a customer focus and an “inside-out” approach. But again, those companies view customers as a means of meeting the company’s needs, not the other way around. And having an inside-out approach means you’re starting from inside and are likely to view everything outside through a very particular (and often peculiar) lens. You gaze at what’s going on in the world and think, how can we get more efficient about our processes or how can we increase our margins?
This mode of thinking, very aligned with the notion of profitability over possibility, is not only inward looking, but it’s also upward looking and backward looking. It’s upward looking because changes to existing processes are likely to be decided by someone above you in the hierarchy. And it’s backward looking because the company is obsessed with an understanding of what it did well in the past, what got it to where it is today, and how to propagate or continue that success in a linear fashion going forward—not with what’s staring you in the face, what’s around the next corner, or what’s out there in some distant region of the world.
In other words, instead of being eager and curious about customers and the world, inward-focused companies have a tendency to be passive about the world, and to see customers in a fixed or