Wharton professor Adam Grant explains the one mindset that every business owner should have to retain employees and increase revenue
- Refusing to adapt can become one of the biggest pitfalls for a business owner.
- Being stuck in your old ways can frustrate employees, impede sales, and stall company growth.
- The Wharton professor Adam Grant suggests business owners should "think like scientists."
Even some of the biggest companies that refuse to adapt will eventually fail, said Adam Grant, a Wharton professor and organizational psychologist. The key to a company's success is being able to rethink how things are done, which in turn improves employee morale and retention, he added.
One of his first consulting jobs was for the bookstore chain Borders. "I watched that company go out of business," he said during a talk about leadership at Goldman Sachs' 10,000 Small Businesses Summit on July 19. He added that the same patterns happened at BlackBerry, Blockbuster, Kodak, and Toys "R" Us.
"None of those leaders were bad at thinking, they were just too slow when it came to rethinking," Grant said. "They fell in love with the way they'd always done things, and they did not question their assumptions until it was too late."
Today, amid a record-high quit rate, employers must adapt to changing environments in order to both attract and retain talent. For example, some employees prefer remote work while others are looking for attractive benefits.
Grant shared how business owners can adapt to ensure this mental stagnation doesn't seep into your company's culture and impede growth.
Build a culture where scientific thinking is encouraged
Too many leaders think like a preacher, prosecutor, or politician, Grant said. In other words, when a manager is questioned, oftentimes they either convince others of their own views, attack someone else's views, or tune out opposing views, he explained.
Those leadership styles can become markers of a toxic culture at a company and keep it from growing. "What scares me about all three of these mindsets is that you've already concluded that you're right and other people are wrong," he said.
Instead, business leaders who think more like scientists make better decisions, he said. "You don't let your ideas become part of your identity, and you are as motivated to search for reasons why you might be wrong as you are to look for reasons why you must be right."
Test your ideas through experimentation
Once you accept the mindset of a scientist, put it into practice by running experiments that test your hypotheses. For example, if you are developing a new work-from-home policy, you may want to survey your employees to better understand their needs.
"If you are afraid to run experiments, then you are closing the door to learn," Grant said. "You will never try anything new. You will never adapt."
He referenced a study conducted in Italy that found new entrepreneurs who tested their products as experiments generated 40 times more revenue than the control group that did not use scientific thinking. "When you teach a small-business owner to think like a scientist, they become more than twice as likely to pivot when something doesn't go as planned," he said.
Conversely, the control group still preached that they were right even when their product failed.
Ask employees for honest feedback
Thinking like a scientist means considering multiple perspectives, Grant said. "You start to listen to the ideas that make you think harder instead of just the opinions that make you feel good," he said. "You also begin to surround yourself with people who challenge your thought process instead of just the ones who validate your conclusions."
Grant suggested making feedback a regular part of your company culture. Ask employees for their honest opinions — and show them you're willing to listen, no matter how brutal their input might be.
"You start to hear that a lot of your best practices were built for a world that does not exist anymore," he said. Instead of relying on those practices and old traditions, ask, "Are they effective for us in the business environment that we're in now?"
There may be times when stakeholders, cofounders, or staff push back against your efforts to change. The best way to combat their apprehension is to ask questions that will lead to better understanding of their concerns, Grant said.
"When you're in a scientist mode, you have the humility to know what you don't know and the curiosity to seek out new knowledge."
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