My eight-year-old granddaughter brought something home from school about “growth mindset versus fixed mindset.” It’s an interesting concept and I find it enlightening they are teaching this to kids.
In simple terms, someone with a fixed mindset believes they are what they are and that’s it. If you look at the old European class system this was prevalent. Born in a coal mining town to a coal mining family and if male you’ll be a coal miner and, if female, a mother/housewife.
A growth mindset has one believe they’re a work-in-progress, challenges are learning opportunities, and there’s always more improvement on the way. Growth mindset people are happier and achieve more.
Entrepreneurs are growth mindset people (company founders, operators, buyers, etc.). Owners see the upside, believe more potential is right around the corner, and don’t doubt the value they provide their customers.
Business buyers are both, and sometimes if tough for business sellers to understand this. Buyers get interested in a company when they believe:
- What the company does can hold their interest (they’ll want to go into work every day).
- Their skills match what the company needs (to grow more).
- They see the overall upside.
However, buyers have a fixed mindset because they (and their bank) want to pay based on historical performance. Part of this is skepticism (and if a buyer has no skepticism they aren’t a serious buyer). Part of it is reality; historical profits have to pay for the business because if it doesn’t grow like the growth mindset part of the brain wants it to there will be serious problems.
Interesting concept, glad their teaching it to kids, and I’m glad I don’t have a fixed mindset.
“The key is not to prioritize what’s on your schedule, but to schedule your priorities.” Erica Jong