Heart of the Art

Virtually all leaders believe that to stay competitive, their enterprises must learn and improve every day. But even companies revered for their dedication to continuous learning find it difficult to always practice what they preach.

Consider Toyota: Continuous improvement is one of the pillars of its famed business philosophy. After serious problems in late 2009 led Toyota to recall more than 9 million vehicles worldwide, its leaders confessed that their quest to become the world’s largest automobile producer had compromised their devotion to learning.

Why do companies struggle to become or remain “learning organizations”? Through research conducted over the past decade across a wide range of industries, we have drawn this conclusion: Biases cause people to focus too much on success, take action too quickly, try too hard to fit in, and depend too much on experts. In this article we discuss how these deeply ingrained human tendencies interfere with learning—and how they can be countered.

Leaders across organizations may say that learning comes from failure, but their actions show a preoccupation with success. This focus is not surprising, but it is often excessive and impedes learning by raising four challenges.

Failure can trigger a torrent of painful emotions—hurt, anger, shame, even depression. As a result, most of us try to avoid mistakes; when they do happen, we try to sweep them under the rug. This natural tendency is heightened in companies whose leaders have, often unconsciously, institutionalized a fear of failure. They structure projects so that no time or money is available for experimentation, and they award bonuses and promotions to those who deliver according to plan. But organizations don’t develop new capabilities—or take appropriate risks—unless managers tolerate failure and insist that it be openly discussed.

The psychologist Carol Dweck identified two basic mindsets with which people approach their lives: “fixed” and “growth.” People who have a fixed mindset believe that intelligence and talents are largely a matter of genetics; you either have them or you don’t. They aim to appear smart at all costs and see failure as something to be avoided, fearing it will make them seem incompetent. A fixed mindset limits the ability to learn because it makes individuals focus too much on performing well.

By contrast, people who have a growth mindset seek challenges and learning opportunities. They believe that no matter how good you are, you can always get better through effort and practice. They don’t see failure as a sign of inadequacy and are happy to take risks.

The Neural Implications of Different Mindsets

What happens inside our brains when we make mistakes? That depends on our ideas about learning and intelligence.

Individuals with a growth mindset, who believe that intelligence and talents can be enhanced through effort, regard mistakes as opportunities to learn and improve. By contrast, individuals with a fixed mindset,who believe that intelligence and talents are innate and unchangeable, think mistakes signal a lack of ability.

Jason S. Moser and his colleagues at Michigan State University examined the neural mechanisms underlying these differing reactions to mistakes. The picture below illustrates neural activity in people performing a task and making errors. Those with a fixed mindset display considerably less brain activity than those with a growth mindset, who actively process errors to learn from them.

When making hiring and promotion decisions, leaders often put too much emphasis on performance and not enough on the potential to learn. Over time, Egon Zehnder, a global executive search firm, had developed a sophisticated means of evaluating candidates that considered not only their past achievements but also their competencies. However, it found that in numerous instances, candidates who looked equally good on paper performed differently on the job. Why?

A partner at the firm, Karena Strella, and her team believed the answer was individuals’ potential for improvement. After a two-year project that drew on academic research and interviews, they identified four elements that make up potential: curiosity, insight, engagement, and determination. They developed interview questions to get at these elements, along with psychometric measures applied via questionnaires. This new model now plays a key role in the search firm’s assessments of job candidates. Egon Zehnder has found that high-potential candidates perform better than their peers with less potential, thanks to their openness to acquiring new skills and their thirst for learning.