Shifting Mindsets
Growth vs. Performance Cultures
Let’s face it: regardless of industry, the current market means operating in fierce competition and complex technology. Businesses are dealing with unprecedented challenges, leading them to expect more from employees than ever before. The overwhelming and often unrealistic performance goals are compromising employees’ capacity, leading to a counter effect.
C-Suite leaders historically have focused on creating a high performance culture, using fear-based tactics to drive results. In a Harvard Business Review article, Tony Schwatz counterintuitively suggests that "building a culture focused on performance may not be the best, healthiest, or most sustainable way to fuel results. Instead, it may be more effective to focus on creating a culture of growth.”
Many successful leaders understand that focusing on performance above anything else leads to worse individual, team, and organizational results. The aim of a performance-driven culture is to increase revenue as quickly as possible with minimum investment.
Cultures driven by this principle usually focus on minimizing resource and personnel costs, maximizing working hours, and doing away with anything that does not contribute directly to actual production. There’s a lack of attention paid to individual growth and emphasis on collective financial results being achieved. This is not to say that a growth culture does not care about performance. The big difference between a performance culture and a growth culture lies in the approach used to achieve this performance.
What is a Growth Culture?
First, it’s important to understand what company culture actually is. It’s difficult to pinpoint a singular definition because it is not just about policies, principles or traditions. Forbes defines culture as ‘the shared norms, values, attitudes, and practices that form the collective identity of your company.”
According to a recent study by Quantum Workplace, employees understood and felt their organization’s culture most through:
Company missions and values
Recognition and celebrations
The company’s approach to employee performance
Employees want to feel valued for their contributions and supported to reach their full potential. A growth culture, according to Investopedia, is one that “emphasizes holistic development of employees, creating an environment that values long-term viability and overall success.” Organizations that empower their people by providing them with the resources they need to succeed, encourage collaboration, and focus on continual learning are more likely to sustainably thrive and produce exceptional results (Forbes).
In a performance-based culture, there is a focus on identifying winners and losers, with the winners getting more attention. The ‘losers,’ on the other hand, are left to fall by the wayside and eventually get weeded out. Companies with a growth mindset don’t just focus on metrics like end results or bottom line performance. They believe that skills and abilities can always be improved. These companies instead focus on regular feedback, highlighting areas where employees could grow and implement development or coaching plans. They consistently measure employee engagement by understanding how their employees feel, how company changes may be affecting their behavior, and overall job satisfaction.
In a groundbreaking study by Robert Kegan and Lisa Lahey, professors at Harvard Graduate School of Education, it was found that the amount of energy employees expend at work attempting to hide their inadequacies from colleagues is the single biggest cause of wasted resources in nearly every company today. When mistakes are seen not as vulnerabilities but as prime opportunities for growth, ‘the level of performance and production skyrockets, with retention and satisfaction increasing as well.’
How to Develop a Growth Culture?
It’s clear that developing a growth culture within a company reigns far superior than a strictly performance-based one. The next question becomes: How does a company create and sustain a growth culture?
Through extensive research, Tony Schwartz of the Harvard Business Review outlined four key individual and organizational components essential to building a growth culture.
1. Safe Environment
In order to grow, employees must feel safe and willing to acknowledge their shortcomings in order to move past them. According to a study by Google known as "Project Aristotle," which analyzed factors contributing to effective teams, psychological safety was identified as the most crucial element. Teams with high psychological safety felt comfortable taking calculated risks, sharing ideas, and expressing their concerns without fear of reprisal. The study found that employees in such environments were more likely to experiment, collaborate, and contribute to innovative solutions, ultimately leading to higher team performance and success.
2. Focus on Continuous Learning
For a culture to have a growth mindset, there needs to be continuous learning and development by encouraging values like curiosity, critical thinking, and transparency versus qualities like self-protection, certainty and judgment. These companies not only encourage continuous learning, but additionally provide the tools and resources employees need to develop, creating the ideal breeding ground for creativity and innovation, leading to improved performance. A report by Deloitte reveals that 68% of employees prefer to learn at work, and organizations that actively support learning outperform their peers. Further, 94% of employees would stay at a company longer if it invested in their learning and development. Continuous learning proves to increase both employee satisfaction and retention.
3. Space for Experimentation
Organizations that provide a space for experimentation and learning from failures foster a culture of innovation and continuous improvement. One notable example is Google's approach. Google encourages its employees to spend 20% of their time on side projects or experiments, leading to the creation of products like Gmail and Google News. This practice has contributed significantly to Google's reputation as an innovation-driven company.
Additionally, a report by McKinsey on "The People Power of Transformations" emphasizes the importance of creating an environment where employees feel safe to experiment, learn from failures, and adapt. Companies embracing a culture of experimentation are better positioned to navigate change and drive innovation. Growth-oriented companies don’t hold onto outdated ways of doing things. They understand the importance of providing space for experimentation.
4. Consistent Feedback
Leadership teams that provide ongoing feedback and coaching to their employees better equip them to understand their strengths and areas for improvement. Ensuring that the feedback is given in a hierarchy-free manner is essential for development at an organizational level, giving employees at all levels the opportunity to turn their shortcomings into opportunities. According to a survey by PwC, employees in innovative companies receive feedback more frequently. There is a direct correlation between continuous feedback and success, as it empowers employees to share ideas and contribute to organizational development.
Think about young children taking their first steps in the world. They venture away from their mother to discover their surroundings, but frequently glance back or periodically return to feel reassured before further exploration. As adults, we share a similar need. When we experience constant challenges, devoid of adequate reassurance, we eventually become overwhelmed and discouraged from further ventures. This is why a growth culture built on continuous learning and feedback, with space for experimentation, all within a safe environment is far superior for organizational success.