By Jessica Mudditt

Resilience is a critical attribute in the modern workplace, where uncertainty and change are a constant. A growth mindset is a key component of resilience because it means being able and willing to learn – and of course, to fail. Innovation thrives when a fear of failure does not take hold.

As mindset and strategy coach in accounting studies Yvonne Starkey explains, a person with a growth mindset believes that they can get better at just about anything with practice. They are open to receiving feedback on how they performed and will ask for help when they aren’t sure how to do something.

“They are focused on learning, rather than demonstrating excellence,” the chartered accountant from the South African Institute says.

By contrast, someone with a fixed mindset believes they possess innate talents and shortcomings. For better or worse, these attributes are fixed and cannot be altered. They are preoccupied with projecting a version of themselves that is capable and intelligent, and they will be hostile towards anyone who disagrees with their point of view, as it will be interpreted as criticism.

When being right gets in the way

According to surveys by one of the leading global authorities on growth mindsets, Stanford University psychologist Carol Dweck, approximately 40% of students possess a fixed mindset. She suggests the majority of adults exhibit at least some traits of a fixed mindset.

Starkey believes accountants are more likely to have a fixed mindset and that self-awareness about the mindset is low. In a profession where success usually rests on precision and accuracy, making a mistake can be costly – and can be a deterrent to cultivating a growth mindset.

“I’d say that more than 90% of accounting students I’ve lectured and worked with struggle with a fixed mindset,” she says.

The chief executive officer of business advisory firm The Outperformer, Brad Eisenhuth, emphasises there are no available studies on the prevalence of a fixed mindset in accounting and finance. He posits that accountants function in an environment that values accuracy and timelines and, by extension, this could foster a belief that capabilities are fixed.

“By way of example, we often see accountants conclude they can’t influence or sell new ideas or services,” he says. “Of course, this is not true, but they can become conditioned to believe that it is not easy or possible.”

However, Cormac Denton CA believes the profession has changed substantially, as have the kinds of people who are attracted to the profession. The head of finance at Reveal in Wellington has observed a huge generational shift since he entered the profession relatively recently as a millennial.

“Ten years ago, accountants’ work was process-driven, rather than critically thinking about a vision of the future and how our skill sets can help to execute it,” he says. “Today, the pipeline of accountants is amazing and many have a growth mindset. I see some of the awesome people who come through – they know how to code, or they’ve got their own startups going on.”

“Ten years ago, accountants’ work was process-driven… Today, the pipeline of accountants is amazing and many have a growth mindset.”

Why it matters

Developing a growth mindset is also a means of futureproofing a career in accounting and finance, in which new and emergent solutions need to be found to solve problems.

“A growth mindset underpins effectiveness in any role that deals with complexity, which is becoming more and more present in the accounting profession,” says Eisenhuth.

Queensland-based performance consultant Petris Lapis agrees, observing that accounting is undergoing rapid change, and the pace is likely only to speed up as automation and artificial intelligence (AI) play a greater role. New business models are also emerging.

“When you look at what futurists and the Central Economic Development Agency (CEDA) are saying about the future of accounting, it is on the cusp of massive change,” says Lapis. “It is predicted that AI will do much of the mundane work we have traditionally done and we will be left with the advice work and all the things that add value to clients.”

In today’s times, a fixed mindset can be a liability for an accountant, says Lapis. For example, someone with a growth mindset will be comfortable telling a client when they need to do more research to find a solution to a query, whereas someone with a fixed mindset may be reluctant to admit they don’t have all the answers.

“A fixed mindset is also traditionally associated with ethical breaches. Look at Enron for the perfect example of that happening,” she cautions, referring to the accounting scandal of 2001 when loopholes and fraudulent financial reporting were used to conceal billions of dollars in debt.

Starkey believes someone with a growth mindset will outperform those with a fixed mindset as their careers develop over time and business scenarios become more complex.

“[Someone with a fixed mindset] struggles to adapt to change because they want to be certain of their abilities and competence before they make a move,” she says. “They don’t like uncertainty. They want to know the answers and will avoid situations where there is no answer.”

Lean in to learning

Over the years, Denton has worked for organisations that are “hamstrung on doing things a certain way”. His advice to others who find themselves in a similar situation is simply to go ahead and start making changes. He quotes the saying: “It’s easier to ask forgiveness than it is to get permission”.

“Oftentimes within these organisations, people are just waiting for somebody to come along and fix things,” he says. “But often people wait for validation or approval before creating change.”

However, he does also stress the importance of taking people with you on the journey towards finding fresh solutions.

“Most people are change averse: it may create more work or different ways of working they can’t visualise,” he says. “Ask questions like: what could a future that looks great look like? What if we just trialled this idea? If this fails, what will we learn?”

Denton believes because accountants know more about their organisation than most other staff members, they are well placed to become the storyteller: both in terms of shaping the future and delivering on execution. In 2012, Denton worked for one of Canada’s fastest-growing companies but its financials were a mess and at face value there appeared to be a real risk of bankruptcy. While other accountants saw the role as too risky for their careers, Denton took on the challenge and used it as a learning opportunity.

“I used that company as the school of hard knocks and learned so much. Some people spend their careers chasing money. I have always chased the opportunity to learn,” he says.

And, in the end, his calculated risk paid off.

“We were like a hungry hippo, going around the world and consolidating a sector through mergers and acquisitions. We became over-leveraged,” he says.

The team then tried to bring in private equity firms to help reset the debt levels, without success. “The firms thought the company was going to fail. They saw a cheaper option topick up the pieces after we failed. Nothing breeds success like being hungry,” says Denton.

The company was bought out seven years later: “Not out of necessity or failure, but because we had operated it out of a tight spot and now it was a great operating company and market leader.”

Overcoming perfectionist tendencies

Eisenhuth believes one of the most effective ways to cultivate a growth mindset is by reflecting on your assumptions – both about your organisation and your skill set. It is likely some of these assumptions are untrue.

“Sometimes in accounting, we jump to conclusions about what is possible or the way things work,” he says. “There can be very prescriptive facts that are real, but there are also judgements based on unhelpful assumptions.”

Being open to feedback is useful in spotting opportunities to grow as professionals. As Dweck states: “Rather than striving always to prove one’s talent, strive to improve it. This requires a shift in mindset.”

Eisenhuth suggests moving away from focusing solely on outcomes and instead celebrating the progress made along the way. Often, this is something perfectionists overlook because they are forever chasing results.

“Accountants and finance people often seek out the ‘right answer’,” he says, “but in many cases, there is no right or wrong. Noticing your progress and seeing it as important – if not more important – is useful in cultivating a growth mindset.”

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How to manage a team using a growth mindset

Pictured: Petris Lapis

Performance consultant Petris Lapis has the following advice for managers who would like to use a growth mindset with their teams.

1. Create an environment where it is safe to make mistakes. “A growth mindset focuses on learning, not on being brilliant in the moment,” says Lapis. “People who make mistakes are learning. Your job is to create a team where it is safe to learn and take risks and, ultimately, become a team that outlearns the competition.”

2. Reward teamwork, rather than individual brilliance. “A fixed mindset is encouraged when the focus is on individuals, rather than on people working and learning together. Make the focus teamwork and you will start to change the mindset.”

3. Think hard about what you praise. “A growth mindset praises the process over the result. Praise the work effort that went into a job, rather than a perfect outcome.”

4. Make sure everyone is open to hearing opinions that differ from theirs. “One of the fastest ways to a fixed mindset organisation is groupthink, where everyone agrees – usually with the boss.”

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Two ways to develop a growth mindset

“My favourite and simplest tool is what I call reframing,” says Cormac Denton CA, head of finance at Reveal in Wellington. “The idea is to shift our instinctive response to uncertainty from negative to intrigued. We can rewire how we respond to situations. This takes active work, but it is effective and starts working faster than we may think.”

Surround yourself with growth-oriented people, says Brad Eisenhuth, chief executive officer of business advisory firm The Outperformer. “If you are demonstrating a fixed mindset (even if it’s primarily in certain fields or domains of your expertise), you will notice a tension between the perspectives of others and your own. You might resist their perspective in order to feel ‘right’. By working with others who push into the unknown, into growth, into new projects, we become more comfortable with the idea that it is OK to not know.”

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From CA Library