Wring Out the Old Year: The Power of Mindset in Business
This blog tends to focus on the nuts and bolts of business and finance. But all financial transactions are behavioral, so it’s important to focus on mindset from time to time.
No matter what kind of year your business had in 2024, it’s important to shift your mindset to the future. Today’s post will discuss just how to do that so you can overcome adversity and take advantage of future opportunities.
Let’s go!
Ditch the Past
Maybe 2024 was a great year. Maybe it was a stinker.
Either way, it’s important to reflect on it but not dwell on it. Dwelling on the past is like trying to get through a muddy field in a car.
You get stuck, and all you can see is what’s immediately in front of you.
If that event is a recent failure or setback, dwelling on the past can create fear of risk-taking and prevent innovation. Conversely, dwelling on success can lead to stagnation and complacency, two very dangerous mindsets in business.
Reflection, on the other hand, is like going over that same terrain in a plane. You look down, see where the paths and pitfalls are, and learn from them. Reflection is a mindset of taking past failures and turning them into successes by learning from them.
If you’re already experiencing success, reflection lets you capitalize on it by enhancing what’s already working.
One great example is the early days of Amazon. Jeff Bezos experienced great success when the company merely sold books.
He was experiencing success and could have stuck with that plan.
But by reflecting, he realized it wasn’t about books; it was about the power of a nascent technology that could be used to sell a huge variety of products people wanted.
However, reflecting is just half the battle. Reflection without a growth mindset can easily lead to dwelling.
Let’s look at how to avoid that pitfall right now.
Embracing a Growth Mindset
Carol Dweck, a psychologist, studied different approaches to business and education for decades. She published her findings, popularizing the theory of the growth mindset.
Dweck said those with a growth mindset seek challenges and new ways to grow, even in the face of seemingly overwhelming adversity.
Instead of equating self-esteem to success, the growth mindset uses both success and failure as a springboard for greater achievement.
What it does not do is dwell on past successes or failures, allowing oneself to be defined by them.
Both are just events, data and experience points to be gathered for better strategic decision making.
Sara Blakely, the founder of Spanx, started her business with just $5,000 in savings and no formal business training. She could have dwelled on those shortcomings, but instead focused on learning, adapting, and problem solving.
And when her early prototypes didn’t get buyers, her growth mindset allowed her to use that information to improve the company’s product offering and marketing.
Blakely’s success makes for a great story, but what do business owners like her and Bezos do to develop a growth mindset?
Practical tips for developing a Growth Mindset
One of the first tips is the most difficult because it requires you to analyze what worked and didn’t work without emotion.
However, objectivity is crucial when conducting this kind of year-end review. Without it, your analysis can get clouded and be inaccurate.
During the review, identify key good and bad takeaways to improve future efforts.
Once you’ve conducted a year-end review, you might want to redefine your goals. Just make sure they are specific, measurable, achievable, relevant, and time-bound, also known as SMART goals.
Last but not least, reading more about business psychology and its impact on entrepreneurial success is a great practice.
The Bottom Line
Business, like money, has a strong behavioral component. Engaging in the right behaviors requires having the right mindset. You can reach new heights by using the past as a tool for reflection and avoiding dwelling on it.
So, get ready to wring out the old year and ring in the new one. A great year awaits!