Analyst(s):Graham P. Waller, Elise Olding
A growth mindset can unlock innovation, agility and continuous learning. CIOs wishing to shift the IT culture to match digital-era demands should follow four steps derived from Gartner's research and a case study on Microsoft.
Enterprises cannot innovate at the speed and scale demanded by uncertain and changing markets without adapting leadership thinking and organizational culture. But mindsets and culture are hard to change and require a dedicated approach.
Culture change can easily become just a slogan unless CIOs explicitly define what the new culture will be. Additionally, specific change tactics must be put into practice that make the new culture part of employees' daily life.
CIOs cited culture and access to talent as top barriers to success in Gartner's last three annual CIO surveys. Without creating an effective continuous learning capability, talent shortages will perennially impede CIOs' success as all enterprises seek scarce digital-era skillsets.
CIOs building or expanding a digital business:
Assess critically whether today's culture will support tomorrow's business direction and create a new leadership narrative that infuses growth mindset practices. Start with viewing every employee as having potential, and examine how this changes your interactions, assignments and recognition.
Define three to five specific behavioral attributes that you and your leadership team will role model to support the growth mindset over the next year. Explicitly share these, hold everyone accountable and encourage 360-degree input from employees.
Embed the tenets of the growth mindset into hiring, performance reviews and the promotion process. Reinforce an interactive approach to performance reviews that focuses on employee learning and growth.
Enterprises cannot innovate as quickly and at the scale necessary to succeed in digital business disrupted markets without a change in mindsets (see "Reframing Your Mindset to Match Digital-Era Reality" ). But leadership thinking and broader culture are notoriously hard to change. A concept called "growth mindset," described in Carol Dweck's book "Mindset: The New Psychology of Success," addresses barriers to change by emphasizing a desire to learn over a reliance on innate and current knowledge (see Figure 1 and "Foster a Growth, Not a Fixed Mindset" ).
Embracing a growth mindset can enable individuals to thrive on challenge, persist and learn from setbacks, build on others' ideas and move forward despite uncertainty. Hence, the growth mindset is well-suited to the demands of digital business. CIOs can use the IT organization to model for the rest of the enterprise how to execute a culture change, such as by adopting growth mindset.
Adapted from Carol Dweck's book "Mindset"
Source: Gartner (August 2017)
Under CEO Satya Nadella, Microsoft has purposely invested in rebooting leadership and culture to better compete in the cloud-centric, digital-era market. Nadella and his leadership team decided to anchor the culture change they seek around Dweck's growth mindset concept.
Gartner interviewed Chief People Officer Kathleen Hogan, Corporate Vice President of Core Services Engineering Jacky Wright and General Manager, Talent, Learning and Insights Joe Whittinghill, to understand their experience in driving a new leadership mindset and culture change at scale across Microsoft. Although it's too early to draw definitive conclusions, Microsoft's early results illustrate the potential of growth mindset to digital business.
This research combines Microsoft's experience with Gartner's broader research to identify four steps CIOs can take to drive leadership mindset and culture change in their own organizations, regardless of size or industry.
Digital disruption often outpaces an enterprise's ability to respond using traditional leadership styles and culture, which can crave certainty too much or be too risk-averse. Hence today's thinking stifles innovation and slows decision making. The enterprise can't execute a new strategy well unless the organizational culture adapts to fit the new demands. In digital business, where enterprises may have to change direction sharply in the face of uncertainty, a growth mindset can create an adaptable, resilient culture (see "Foster a Growth, Not a Fixed Mindset" ). While many CIOs talk about being more innovative or increasing velocity, it can too often remain a vague dream. The growth mindset focuses on applying effort, learning and growing as the way forward. It can provide a tangible way to stimulate an enterprise's innovation. CIOs can champion an IT growth mindset leadership and culture change that strengthens the organization while positioning IT as an example of the type of DNA needed more broadly across the enterprise.
Nadella changed Microsoft's focus when he became CEO in 2014, resetting the mission of the company around empowering every person and every organization on the planet to achieve more. Markets which had centered on desktops and servers changed into a cloud-first and mobile-first world. Therefore, Microsoft would move from a company that sells software products for the Microsoft platform to one that provides services continuously to empower people on any platform.
To accomplish this shift, Hogan described how Microsoft needed to change from a know-it-all culture (experts who defined requirements then sold products to customers) to a learn-it-all culture (teams who learn from a global and diverse set of customers, constantly seeking new insights and paradigms). Nadella made this cultural transition a personal priority: "What I realize more than ever now is that my job is curation of our culture. If you don't focus on creating a culture that allows people to do their best work, then you've created nothing." 1
Nadella based his strategy for culture change on the growth mindset. Microsoft encapsulated Dweck's and Nadella's thinking in a set of principles: "Perhaps the most important driver of our success is culture. We fundamentally believe that we need a culture founded in a growth mindset." It starts with the beliefs that:
Everyone can grow and develop.
Potential is nurtured, not predetermined.
Anyone can change their mindset 2
Initially in an executive off-site with Nadella's direct reports, then later in a three-day off-site, Microsoft's top 150 leaders worked through a "culture cabinet" of 17 leaders. They applied the growth mindset culture aspirations to four additional culture attributes:
Customer-obsessed: We will learn about our customers and their businesses with a beginner's mind and then bring solutions that meet their needs. We will be insatiable in our desire to learn from the outside and bring it into Microsoft, while still innovating to surprise and delight our users.
Diverse and inclusive: The world is diverse. We will better serve everyone on the planet by representing everyone on the planet. We will be open to learning our own biases and changing our behaviors so we can tap into the collective power of everyone at Microsoft. We don't just value differences, we seek them out, we invite them in. And as a result, our ideas are better, our products are better and our customers are better served.
One Microsoft: We are a family of individuals united by a single, shared mission. It's our ability to work together that makes our dreams believable and, ultimately, achievable. We will build on the ideas of others and collaborate across boundaries to bring the best of Microsoft to our customers as one. We are proud to be part of team Microsoft.
Making a difference: Our culture attributes are all in service to our mission, and ultimately making a difference in the lives of our people, our shareholders, our customers and the world around us.
Critical to the growth mindset culture change success was mapping how it supports business strategy and achieves the mission via the culture attributes.
CIOs can apply these ideas about leadership and culture to the IT organization:
Define the IT organization's needed new cultural attributes whenever market forces necessitate a new business strategy or a new mission for IT that renders the existing culture an impediment to success. Design an IT culture change to ensure the pace of change inside the IT organization at least matches the external demands.
Determine whether the growth mindset along with other techniques such as diversity and inclusiveness will support the enterprise's strategic priorities and business goals. Be specific about how the growth mindset will address future challenges such as moving forward in the face of uncertainty or fostering cross-team collaboration.
Explain via a reframing narrative what you will retain from the old culture that will continue to serve you well, along with what new traits must be infused to meet future challenges. For example, outline a customer scenario or a transformative digital business vision, then compare how the organization would deal with it under the old and new cultures.
If the broader business is not yet ready, don't wait. Rather, position the IT culture change with the CEO and executive committee as an example of a future possible organizational capability. Seek opportunities to include business partners, such as with multidisciplinary product teams supporting digital assets or digital innovation labs. Ultimately, extend the new culture throughout the whole enterprise as it proves its value.
Employees will not adopt the new culture if management merely pays lip service to it. For the culture to take hold, leaders must create a comprehensive formal plan that allows plenty of time for the change to happen. Additionally, it needs to measure progress toward adoption, making themselves accountable for modeling behaviors. In a sizable organization, management must boil down the culture into a simple message that every employee can understand (see "Compose the From/To/Because Story to Convey a Behavior Change Journey" ). CIOs must also incorporate the new culture into the most fundamental activities, such as year-end reviews, hiring and promotions. Without serious, continual reinforcement from all management systems, people will soon revert to the old behaviors.
"It starts with leadership which flows really beautifully into culture," explained Whittinghill, "as we believe culture is an outcome of where we want to go and where we want to create the future." To deliver the new business strategy via the culture attributes (growth mindset, customer-obsessed, diverse and inclusive, one Microsoft and making a difference) leaders at all levels across the company were engaged to identify the type of competencies and skills needed to lead the company forward. They ended up with three key leadership principles:
Create clarity for employees, customers and partners as we work together.
Generate energy to inspire, to take on big bets, to innovate and to help solve problems.
Deliver success by building products people love, and by creating win-win outcomes where customers and partners feel we are working in a unified way.
The broader culture change posed a huge challenge for Microsoft, which has 110,000 employees (including 16,000 managers), in more than 100 countries. It is tackling the challenge systematically starting with employee engagement taking a diversity lens to be inclusive of everyone in Microsoft. Hogan explained: "We conducted internal surveys — where we asked, 'What do you love that you want to keep but what are things that you think if we evolved would help us be better?'"
Microsoft leaders conveyed the message about the new culture to workers in many ways.
Hogan explained, "We used to have a four-hour company meeting where the leaders would present to the employees. Well, Satya changed it to one week where we had hackathons, and we're tapping into the power of all of our people, and all these great ideas are coming at all levels in the company." Changing the course of the performance review process (see next section), starting an outside-in speaker series and having all employees take unconscious bias training were all symbolic changes.
The changes also permeate everyday activities such as making sure employees see you and your leadership team showing up in meetings exhibiting growth mindset where listening is key. "Small changes in behavior can make a huge difference," Hogan advised. "At the end of the meeting it's important to be inclusive and say, 'Hey, let's hear from everybody before we close out the meeting.'"
Leaders share various methods to help employees practice a growth mindset, such as: "Managers receive a special discussion guide [a 50-minute meeting-in-a-box and short video] to help facilitate a team diagnostic and drive a conversation on culture. Teams walk away from the meeting with actionable lessons such as '10 inclusive behaviors' and methods to exhibit these inclusive behaviors."
"Each quarter we focus on one of our cultural attributes, with an environmental campaign for all employees (see Figure 2). Posters and cups feature luminaries and thinkers from outside of Microsoft and inside of Microsoft who represent our culture." These artifacts generate great "water cooler" conversations and in a very casual, organic ways help people learn from each other in the moment. "We also offer a new Sway focused on each of the cultural attributes. The Sways are in a digital environment that delivers an immersive experience with visual, interactive storytelling to invite deep learning of a cultural attribute."
Source: Microsoft (2016)
Executives are accountable for modeling leadership principles and inspiring the broader organization. Wright outlined the comprehensive approach to training that addresses tough questions such as:
How do you build a collaborative culture?
What are the things you need to do as a leader to drive this new culture throughout the organization?
What is going on outside Microsoft that will impact how we lead?
Some leaders additionally adopt personal tactics to practicing a growth mindset. "At the leadership level," Wright said, "we have reverse mentoring, which is an attempt to help folks understand how to think differently. At the CIO operations team level, we each have a reverse mentor. At Microsoft it has really, really transformed how the IT leadership team thinks about technology, modern practices, what millennials want. Mostly, it's our early-in-career folks. They may come in and speak to what they're looking at on their mobile device, what are the sites they go to, everything from that to instant gratification, how we manage that."
CIOs can apply these ideas about leadership and culture to the IT organization:
Break down the leadership and culture change into small steps so that it's easy for people to grasp. Define three to five key behavioral attributes, why they are important, how they are demonstrated in day-to-day work and how they will be measured and motivated.
Allow plenty of time to train leaders and employees on key techniques such as the growth mindset. Use a variety of training methods (outside-in speakers, in-a-box short consumable modules that facilitate engagement and longer courses). Use techniques like reverse mentoring to train people to think differently. Regularly acknowledge progress and adjust plans.
Use a combination of big symbolic gestures (such as changing the way you conduct organizationwide meetings or emphasizing growth mindset attributes in the performance review process), as well as everyday tactics (such as how leaders show-up regular meetings) to stimulate change.
Bring everything you've got. Use every available means to consistently drive home the mindset changes you want to make. Ask for help from HR, corporate communications, marketing and other departments who excel at messaging.
In an organization, people do what managers notice and reward. Culture won't change unless management tracks how well people are picking up the new behaviors and rewards them for it. The behaviors themselves, such as "do it, try it, fix it" experimentation, learning from failure and increased collaboration, may appear unmeasurable. But leaders can measure the impact of those behaviors and must do so for culture change to succeed.
Microsoft changed the way it evaluated employees to explicitly encourage them to adopt a growth mindset. Employee measurement evolved from primarily individual performance to now being based on three equal criteria, which emphasize collaboration (see Figure 3):
Individual accomplishments that contribute to team, business or customer results
Contributions to the success of others
Results that build on the world, ideas or efforts of others
Performance reviews have additionally become more conversational. Of course, the employee is supposed to listen to feedback from managers and peers with an open mind and look to how they can continue to learn and grow. But managers also ask for the employee's opinion because they are expected to learn, too.
Source: Microsoft (2016)
Microsoft uses multiple approaches to understand how well employees are engaging the growth mindset and other culture attributes. The HR department runs both a Daily Pulse survey to gauge how much the new cultural principles are taking hold, as well as a quarterly analysis. The results shared with us were significant. Hogan said: "It started out with awareness. Are you even aware of what a growth mindset is? Are you aware that we've embedded our culture in a growth mindset? That's now in the 90s (percent). And now we've moved to, Do you see leaders and employees exhibit a growth mindset? Our leaders use this data to help pinpoint areas needing additional focus and support." While Microsoft is making progress implementing the growth mindset across leadership and culture, leaders are humble about the progress and recognize it's an ongoing journey.
In addition to direct feedback to leaders, Microsoft gives employees a chance to rate leaders on how well they practice the growth mindset. "We have our annual employee poll out right now," said Whittinghill, "and so we have a rating, it's called your leadership effectiveness index."
CIOs can apply these ideas about leadership and culture to the IT organization:
Work with HR to revise the performance metrics for the IT organization to include a substantial component reflecting the new behaviors. Be specific as to what the behaviors are and how they will be measured. All roles within the organization should have these metrics, even the operational support staff. New behaviors will not become a culture unless everyone adopts them. Be open to continuing to evaluate and iterate as there is no one-size-fits-all formula.
Coach employees how to offer feedback regarding the cultural health and extent to which desired growth mindset traits are exhibited within the teams that they operate. This may not be a skill that comes naturally, particularly in a culture where this has not been the norm. Provide simple team oriented assessment diagnostic tools that can generate dialogue and team-based action planning.
Avoid just having managers tell employees what they did right and what they did wrong. Instead, create surveys and other safe mechanisms for employees to provide feedback on their leaders' practice of the new culture. As CIO, be ready to take visible action on this input or risk having the growth mindset viewed as a management fad. 3
Many "critical" initiatives that management pushes down to the organization never stick. Culture change could become one of those if management doesn't make it part of workers' daily life (see "Use Individual Adoption Styles to Bust Through Organizational Change Resistance" ). The new behaviors need to be simple, memorable and embedded in daily work and processes. Repeated exposure over a long period will enable workers to internalize the new principles of the culture so that they become the automatic way things are done. At the same time, leaders must regularly practice a growth mindset themselves and reward others who do. Workers will only take the risk of trying it out if they see leaders using it. Over time, growth mindset becomes standard practice across the organization.
"We've been at this now for a year and a half," said Hogan, "and Satya continues to remind us, 'You can't freeze and unfreeze culture. It's constantly evolving. You have to constantly nurture it, and you have to constantly earn it.'" At Microsoft, growth mindset isn't just a good idea; it's a good idea for Microsoft . The emotional commitment to the idea started at the top. "Growth mindset is truly authentic to who Satya is," said Hogan, "and I think that's been really why it's accelerated. Because people see him in these town halls. They see how he responds. In mid-year review, he's asking for their opinion and listening."
Leaders convey the importance of the new culture through stories. Wright supplied an example: "We had a program where we invested quite a lot of money that we shut down because it wasn't going in the right direction. It was at a point of diminishing returns. And as a leadership team, we had to make an executive decision to stop the program. We communicated that across the organization because teams were impacted by the decision and they needed to understand why the decision was made. We on the IT leadership team had to admit that we made a mistake."
Hogan added: "One of the key examples of growth mindset was when we launched Tay [an artificial intelligence chatbot], and it didn't go as we expected. In fact, it was pretty terrible, and the team felt an immediate sense of failure. But what happened next was powerful. Satya's response to the team was, 'I'm with you. You guys took some big risks. I appreciate that. The key now is to learn, to look at what we missed and make sure we're better, stronger as result of that.'"
Leaders demonstrate a growth mindset in critical activities. "We've also made it a key component of our promotion process, so as you look at making corporate vice president, you have to not only talk about impact and your history of success or failure, but you can learn from that failure and use that to make us stronger. Potential corporate vice presidents (CVPs) participate in an interview, and as part of that, they submit a write-up on how they live the culture. Do they exhibit a growth mindset? Are they customer obsessed? Are they diverse and inclusive? It's really important that all of our leaders exhibit all of the elements of the culture."
Whittinghill explained how it works from the manager's perspective: "You look at the leadership principles, and say, 'I need to work on becoming stronger at generating energy' for example. And you say to your team, 'When I start to do X, you have permission to call me on that and say, "I just want to call out that you're not really generating positive energy right now."' It's about establishing a safe environment for feedback to occur."
The new culture guides decisions about IT personnel from hiring, measuring employee growth and contribution through to promotions. (Microsoft no longer has performance reviews.) 4 When asked if Microsoft is prepared to terminate someone Hogan said, "Our performance review process is a combination of impact and culture, where it isn't only about delivering success but how you do it."
CIOs can apply these ideas about leadership and culture to the IT organization:
Role-model the new cultural behaviors visibly, even when it makes you uncomfortable. Create a "psychological safety zone" that gives people the permission to stretch and make mistakes without harming their careers (see the TED talk by Astro Teller "The Unexpected Benefit of Celebrating Failure" ). Reward people through performance reviews and other means when they pursue bold, well-intentioned ideas in a risk-minimizing experimental process.
Dig into what happened and find lessons to improve following failures or setbacks. Institute rigorous postmortems (not the superficial debriefs ones that are usually done). Focus on what you have learned and specifics that can apply next time. Be disciplined not to skirt tough issues. Communicate authentically in a way that reinforces the desired growth mindset culture or these exercises will be relinquished to going through the motions.
Conduct practice sessions. Set up a scenario, and have small groups practice what would they do in the situation. How would they perform with a growth mindset? Then analyze what actions they chose and how can these be supported and instilled by each other.
Make sure workers see you and your managers show up different in meetings (for example, where you truly are listening or encouraging measured risk taking to promote learning). Give them permission and a safe zone to call you out should you slip or fall back to old mindsets and behaviors.
Many CIOs talk about the need to adapt leadership culture to better match the demands of digital business. But just telling people to become more innovative, speed up decision making or be more risk tolerant seldom leads to meaningful change. Instead, CIOs should commit to a systematic reboot of leadership traits and culture. A technique such as growth mindset can help people address intrinsic barriers to change (see Figure 1). CIOs can use growth mindset to ignite creativity, attract new talent while reinvigorating and motivating current employees.
Of course, any one technique such as growth mindset is not a panacea but a component of a broader culture change. One ongoing challenge identified by Hogan is the tension in balancing growth mindset with accountability. Given that every culture is different, this will be a challenge for successfully implementing a growth mindset. We will continue to track this area in our research.
Most enterprises facing digital disruption need this type of change, even when the broader business leadership team is not yet ready. CIOs should not wait passively. Rather, they should initiate such a change within IT, presenting it as a microcosm and learning exercise for the broader enterprise. CIOs should also seek opportunities to include business partners, such as with multidisciplinary product teams supporting digital assets or digital innovation labs. Hence, progressive CIOs can position IT as an exemplar of the future organizational DNA rather than being perceived as a function stuck in the past.
We based this document on secondary research into the growth mindset and the use of this concept at Microsoft, and on interviews in March and April 2017 with three Microsoft executives: Kathleen Hogan, chief people officer; Joe Whittinghill, general manager of talent, learning and insights; and Jacky Wright, CVP of core services engineering.
1 M. della Cava. "Microsoft's Satya Nadella Is Counting on Culture Shock to Drive Growth." USA Today. 20 February 2017.
2 "Empowering Our Employees." Microsoft. October 2016.
3 D. Rock. "Quiet Leadership: Six Steps to Transforming Performance at Work." Harper Business.
4 P. Cappelli, A. Tavis. "The Performance Management Revolution." The Harvard Business Review. October 2016.