By Nick Jankel

Professional Global Keynote Speaker, Transformation & Innovation Catalyst, Leadership Theorist & Practitioner, 6 x Dyslexic Author, 3 x TV Coach, Co-Creator of Bio-Transformation®

Mindsets Matter

A few years ago I witnessed, live and direct, a very experienced and smart C-Suite leader, in one of the most successful companies in Silicon Valley, make the kind of profound leadership error that can costs organizations their long-term survival—and individuals their jobs.

The way the situation played out was such a perfect example of how the wrong—but seemingly so right—leadership mindset, can negatively impact strategy, innovation, and business transformation that it prompted me to clarify years of thinking about how mindsets affect everything.

From this stimulus was born the idea of the Transformation Mindset. Its opposite is the Legacy Mindset. It is this that causes the smartest and most successful leaders to fail, time and time again: just ask the CEOs of Kodak, AOL, Yahoo, Uber, and Deliveroo.

Professor Sydney Finkelstein, a business professor at Dartmouth, studied over 50 organizations that declined into irrelevance. In Why Smart Executives Fail,  he states that “failures are caused by flawed executive mindsets that throw off a company’s perception of reality, and delusional attitudes that keep this accurate reality in place.”

In other words, pretty much every organizational crisis, breakdown, and bankruptcy is caused by senior leaders unwittingly perpetuating a Legacy Mindset. This Mindset thinks that doing pretty much what we did in the past (same business model assumptions, same processes, same leadership style) harder, better, and faster is enough to ensure we make it.

Mindsets matter. In fast- and dramatically changing environments, our mindsets as leaders—how we sense, feel, think, and then act—is our main driver of competitive advantage and the only factor in our (almost) complete control. As every organization has access to similar technology and production capabilities, we can’t rely on ‘stuff’—even the very latest machine learning algorithms—to defend our business for long.

We can’t control what our competitors do and we can’t control our customers. We cannot use legacy power to control markets when empowered and activated citizens demand more.  We cannot control a pandemic from shutting down markets. We can’t control fires and flooding. The only thing we can control—though ‘master’ is a more accurate word—is our mindset.

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We can craft, consciously, our mindset. We can choose to evolve, develop, and mature it so we can reinvent ourselves not just once but many times, as change speeds up. Most of us know what a growth mindset looks like. Carol Dweck, the psychology professor at Stanford who originated the term, describes a growth mindset as the “believe [that] our talents can be developed through hard work, good strategies, and input from others”.

This is a foundational step forward but it is no match for the fast and furious fluxes and fluctuations of the VUCA world: volatile not stable; uncertain not predictable; complex not simple; and ambitious not clear. 

The Transformation Mindset

The Transformation Mindset takes the growth mindset to the next level—and beyond. It is a concept I have been working on for over two decades experience on the frontlines of disruption. As well as knowing that our capabilities are far from fixed, we also know that we each must, and psychologically can, constantly adapt and evolve ourselves—and our organizations—to fit the relentlessly- and ruthlessly-changing world.

Therefore, a leader with a Transformation Mindset experiences the digital, disrupted, and damaged world as a constant invitation to lead the transformative change of outdated products, processes, and people. Given the reality that planetary-level turmoils is just getting started, the next decade or so will be the make or break of many organizations; and their senior leaders. This is why Yale professors predict that so many Fortune 500s will be gone by 2030.

With a Transformation Mindset, we attend and attune our entire being to engage fully in the dramatic changes in our external environment. We own these changes with our entire mind and body, taking them within to metabolize them into value-creating insights and ideas. This allows us to drive continuous transformation when adaptation and agility are needed; and to land continuous improvements through getting stuff done when this is a better fit for the moment.

Rather than expect to meet just one or two business challenges that require business transformation and transformative innovation in our lifetimes, we expect to meet one or two such “Transformational Challenges” every year—perhaps every quarter. This is because the pace of change outside our enterprises is so fast—in every single area, not just technological change but also in regulation, ecological crises, generational shifts, and more—meaning we have to constantly adapt and evolve to ensure we survive, let alone thrive.

By preventing us locking into defensive positions of assuming we are right because we are smart and were successful in the past—driven by our innate biological responses to confusion, change, chaos, and complexity—the Transformation Mindset allows us to sense-make and decision-make effectively in VUCA environments. It allows us to effectively adapt our teams, projects, and organization with purpose and power to evolutionary pressures, forging the future of our industry; whilst efficiently delivering results in the present using well-optimized models from the past.

The Brain In Creativity & Transformation

However, biologically speaking a Transformation Mindset is not down to intelligence alone. Until recently, most people believed that what sets human beings apart from other species is our intelligence. Intelligence has been generally understood as an ability to focus on tasks without distraction; solve problems using existing knowledge; make useful and rational predictions about the world; and take action to mitigate risks and deliver goals based on those predictions. It has long been assumed that the prefrontal cortex is the seat of human reason.

But recent studies with jazz musicians and rappers have discovered that the prefrontal cortex—long assumed to be the seat of human reason—is actually less aroused when we are creative. In other words, when we are innovating new solutions to new problems thrown up by the VUCA world, we are less in control, less focused, and less conventionally smart! 

It turns out that our neural networks have evolved to allow for two fundamentally different ways of sensing the world, processing information about it, and coming up with ideas about what to do next. One brain network, the Executive Control network, allows us to complete tasks successfully with convergent thinking (best practice).

The other, the Default Mode Network, allows us to create new solutions to emerging problems driven by evolutionary pressures with divergent thinking (what we call ‘next practice’).

All of us were born with both of these brain networks. Therefore, everything we need to transform anything lies within us.  A third brain network, the Salience Network, switches us between modes depending on levels of threat, stress, and uncertainty.

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The Two Modes Of the Transformation Mindset

Working from the emerging science of our two brain networks but adding in decades of experience working with leaders,  we have developed a brain-based methodology called Bio-Transformation Theory and Practice. In it, we suggest that every leader can access two distinct modes that deliver different evolutionary advantages and problem-solving methods. Each mode is a good fit for specific types of problems; has a different neural architecture underpinning it; and a different set of subjective experiences that help us discern which mode we, and our co-workers/customers/consumers, are in.

The task-oriented and focused mode we call “Control & Protect Mode”. It attempts to control the inherent chaos of life; predict what best to do next to survive; and to protect us from threats to our existence. In Control & Protect Mode, we are highly focused and get stuff done; drive toward certainty rapidly; leverage technical expertise to solve problems quickly; measure success by metrics; and are both rigorous and are risk-averse. In Control & Protect Mode we love to make continuous improvements to Business as Usual in order to deliver predictable outcomes (such as steady margins and career progression).

What we call “Create & Connect Mode”, on the other hand, allows us to connect with other people (customers, employees, users, investors) to develop the fresh insights we need to then innovate value-creating innovations that resolve novel problems thrown up by the digital, disrupted, and damaged world. In Create & Connect Mode, we are curious, creative, and empathic.

We are more interested in asking better questions than producing right answers; we are ready to pause and reflect on complex problems rather than rush to solve them; we are able to cultivate safe psychological spaces for diverse opinions to be shared and for the co-creation of ideas that we couldn’t come up with alone; we are happy to (respectfully) challenge the assumptions of our market; and prioritize possibility and agility over certainty and stability.

In environments that are stable, simple, predictable, and clear, Control & Protect Mode is a very effective problem-solving approach: it prevents us from having to exert the enormous emotional and cognitive effort needed to come up with fresh insights and create new ideas consciously.

Yet in environments that are rapidly changing, like the VUCA reality we all must deal with, Control & Protect Mode is not a great fit. Linear and task-oriented, it attempts to apply existing power and best practice—derived from technical expertise, experience, and training all from the past and so often outdated—to emergent challenges that nobody has ever solved before. 

In such situations, we must use Create & Connect Mode instead. This allows us to metabolize evolutionary pressures into exponentially value-creating innovations. Then we need Control & Protect Mode to deliver them to time, budget, and quality.

In fact, the complex process of imagining and then executing exponentially high-value ideas involves a complex harmony between Creative and Control Modes. As Dr. Roger Beaty, from Penn State, puts it, “creative people are better able to co-activate brain networks that usually work separately.” Therefore, at the core of a Transformation Mindset, is our capacity to switch between two equally valid and valuable modes of problem-solving.

These complementary approaches act as an antagonist pair (much like our biceps/triceps work to give us fine motor control, dexterity, and strength with our arms). If we recalibrate our mindset to be transformational we have access to both these approaches for great sense-making, decision-making, and form-making in the VUCA world.

Transformational Leadership: Using The Right Mode For The Moment

A leader with a strong yet fluid Transformation Mindset knows which mode—Control & Protect Mode or Create & Connect Mode—to use to match the moment. But just as importantly, they also know how to switch between the modes. This is much trickier than it seems as the neuroscience data suggest that our emotional and bodily states determine, to a large degree, which mode we are in. 

This means we cannot cognitively just decide to be in Create & Connect Mode. We have to learn how to regulate and transform our emotions and bodily sensations in order to switch modes fluidly and without resistance. In other words, if we want to be able to dance with complexity and chaos with radical levels of behavioral agility we have to have an unshakeable sense of stability within.

This is what embodied wisdom is all about. Developing an adaptive and innovative Transformation Mindset relies on us being able to feel rooted in our bodies, connected to ourselves and others, and anchored in a sense of meaning and self-mastery. 

Therefore The Transformation Mindset requires an unprecedented level of embodied wisdom—and so is the greatest unlock of transformational leadership. Our cognitive smarts are both broadened and tempered by ever-deepening embodied wisdom, which ensures we can confidently and consciously lead our people, organization, and system towards a regenerative future.

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