SME Leadership Development through Growth Mindset

The debate on whether leaders are born or made is always at play in many organizations as they strive to attract and retain the most talent. The underlying view of leadership informs how an organization; recruits talent, Develops its management training programs and develops its succession plans.

Globalization has increased competition in virtually all sectors of the economy; this coupled with the myriad of challenges faced by SMEs make survival quite a challenge. In this regard, SMEs can actually use human capital as a competitive advantage.

Studies have shown that managers perceive leadership potential in their subordinates in cases where the organization has inculcated a growth mindset culture. Growth mindset culture borrows heavily from behavioral theory of leadership. The behavioral theory proposes that people can become leaders through teaching, learning and observation. This is in contrast to The Trait theory that some people are predisposed to leadership because they posses intrinsic leadership qualities and traits.

The Growth Mindset culture spawns from the belief that talent should be developed in everyone in the organization, not viewed as an entitlement of a few people perceived to be talented.

I believe the recent announcement by accountancy firms KPMG and Deloitte to change its recruitment process to suit millennials is informed by the Growth mindset meaning that talent doesn’t necessarily have to come from graduates for certain institutions. It’s worth noting that the so called Millennial (People born between 1980 and 2000) will make up 75% of the global workforce by 2025.

This should be a wakeup call for SMEs and Education sector which must focus on building all round leaders who can adapt to different environments, enjoy challenges and are consistently learning.

To explore this question, let’s look at Microsoft, which is deliberately creating a growth-mindset culture and, in that context, rethinking its approach to development. As a result, previously unidentified — yet skilled — leaders are rising to levels they might not have in a traditional development model.

SMEs can nature talent based on growth mindset through encouraging learning and creativity by all its employees. This is how leaders will be made.

SMEs can offer its employees as many chances to step outside their day jobs and develop leadership skills not by attend seminars and workshops; but by fostering collaboration across department, functions and discipline in which idea generation is the key agenda. As soon as any employee gets a feasible business or social idea; staff members who share similar interests are encouraged to join the team and help refine the idea into an actual product though developing its business plan and developing an actual prototype. Due to scarce resources all teams could pitch the idea to top management with the wining getting funding to scale up their project.

Such a process would enable team members who were previously not in the leadership trajectory get into leadership roles.

Similarly, SME management could encourage and rewards risk taking by its employees while undertaking such projects. This will have an effect of spurring creativity further knowing that one will not be reprimanded. Part of the reasons SMEs have thrived is that they are able to take risk and make decisions quicker compared to their larger counterparts. Such an initiative would also ensure that they stay ahead of the pack both in terms of talent development and products innovation.

Finally SMEs may need to reevaluate the traditional approach to talent development in which a company identifies a pool of future leaders which basically is driven by the trait theory meaning that if you can identify people with inherent leadership skills you can then guide them into leadership roles.

The traditional approach to talent development can be complemented with fairer and equitable performance evaluation frameworks such as the 360 Job evaluation and moderated talent forums. Such talent forums should be chaired by the Managing Director or CEO and composed of senior managers, departmental heads to review staff, discuss moving people up and across teams, and brainstorm methods of augmenting skills and building experiences.  Though time consuming such an approach may enable the company identify talent early and develop it while creating opportunities for everyone to grow.

The Growth mindset culture has the potential to unleash greater leadership potential in organizations by offering all employees equal leadership opportunities and attracting new people at the same time.