This document discusses how a leader's mindset, defined as their beliefs and ideas about their company, can significantly impact business performance. Prevailing mindsets are often based on past experiences and successes, leading leaders to apply those same beliefs and assumptions to current situations, even when conditions have changed. This can result in complacency and neglect of new strategic needs. However, an open and growth-oriented mindset that questions assumptions and remains adaptable to change can help leaders innovate and transform their companies as needed. The document recommends leaders regularly examine their most influential beliefs to ensure they remain relevant to the current business environment.

1. MINDSET MATTERS
ABSTRACT
DISCOVER THE IDEAS AND
BELIEFS DRIVING YOUR
BUSINESS PERFORMANCE.
Author
Todd S. Greenberg,
President, TSG Advisors, LLC

2. Mindset Matters
What is Mindset?
There’s no shortage of factors to consider when thinking about business outcomes. Let me add
a personal favorite: Mindset. Mindset is an intangible that resides beneath the surface and, in
my experience, drives business performance for good or bad.
So what exactly is it? Caution: Exactly may be a stretch. Like most abstractions, mindset is open
to interpretation and difficult to pin down. Usually you’ll hear definitions like mental model or
assumption. Mine further specifies assumption to simply, the beliefs and ideas leaders have
about their companies.
Why it Matters
Mindset reflects long-held and seemingly reliable beliefs that occasionally defy logic. Recently
encountered examples from various profitable but underperforming companies include ideas
and beliefs like, “I can trust my family.” Or, “My team is fantastic.” Or even, “All we need to do
is add sales people.”
The tricky thing about assumptions is their seductive and intuitive appeal. They sound quite
reasonable especially when divorced from their context. And this seems to be the issue. Many
leaders find it difficult to “revert to logic” at critical, high-stakes moments that require new and
different perspectives for their companies.
Outcomes
Behavior
Mindset

3. Prevailing mindset is strongly conditioned by prior experience. Leaders, like the rest of us,
encode and internalize what’s worked in the past and then apply the lessons to the present.
Cognitive scientists call this a “prediction by matching error” or, in lay terms, mistaking the
present for the past. It happens a lot and not just in middle market companies.
Research from the Corporate Executive Board on Fortune 100 Companies spanning the last 50
years indicates that even those with stellar revenue growth rates encounter stall periods that
diminish value.
The good news is this: 87% of stall events are due to either strategic or organization factors like
innovation breakdowns, neglect of core markets and larger trends, and thin talent.
Two things about the findings are notable. Strategic and organization factors are undeniably
controllable…provided leaders remain open to new ideas about markets and organization
capability and take decisive actions well before business performance levels off or softens.
The second is what the factors suggest: An unrealistic comfort with the status quo or said
differently, complacency. Declining performance begins when leaders and their company
cultures stop thinking creatively about the business.
Forcefor Good
On the other side of the ledger, leader mindset can be adaptable and compelling. It’s
recognizable during the earlier stages of company building when the need to pivot on things
like strategy, product, or markets are embraced. Expressed early on and hopefully thereafter,
this type of mindset is neither fixed nor rigidly bound by prior ideas or beliefs.
Unlike the above examples, mindset can be more open and expansive. Researcher Carol Dweck
calls it the Growth Mindset. The essential feature is openness to possibility and novelty. This
attitude and way of operating is the antithesis of rigidity. Think of Steve Jobs transforming
Apple into a consumer product company or Ed Catmull using technology to revolutionize film
animation at Pixar. Remember Toy Story?
Open mindsets are critical for business leaders because they help them remain current and up-
to-date on change taking place in their ecosystem. Well-crafted visions and strategies are
predicated on growth mindsets that are open and nimble.
What You Can Do
Capturing mindset should be part of all leaders’ reflective process. It’s a matter of paying
attention to one’s own (as well as others) thoughts, ideas, and perspective about the entire
business and testing them out, regularly.

4. The goal is to discover which ones drive current circumstances and whether or not they are
relevant. Maybe “adding more sales people” worked in the past but is it the best solution now
given market or customer shifts? Or, maybe the team was fantastic 10 or even 5 years ago. But
is it still the case now that strategic or operational changes are necessary?
Putting long-held beliefs and ideas about what works under the microscope counters “matching
errors” and injects a healthy dose of reality into the mix. Truth is, even more recent beliefs and
ideas should be scrutinized for value.
To start, identify the handful of key ideas, those you can observe in action that drive decisions
and impact ways “things get done around here.” Then ask yourself as well as members of your
team these simple questions:
1. When did the belief or idea become part of our operating manifesto?
2. How has the belief or idea helped previously?
3. Is the belief or idea still relevant?
Rigorous belief and idea testing is learned behavior that benefits from discipline and practice. It
may seem risky but there's no other way to peel-the-onion and move things forward.
To learnmore contact:todd@tsgadvisorsllc.com;Mobile:617.922.2128