A growth mindset: how SMEs can compete with retail’s giants
When it comes to doing business, it’s usually better to keep things simple. When it comes to thinking about how you do business, sometimes it’s better to challenge yourself. It’s easy to avoid trying something new because it might not work, or to repeat the same activities without analysing their effectiveness.
Adopting a growth mindset can help your business thrive. That means trying new things, embracing failure, and learning from everything that you do. In fact, our own research shows how this more open mindset can help businesses gain a competitive edge. If you want to find out more about how to adopt a growth mindset for your business, we’re here to help. So, in this article you’ll learn:
– What a growth mindset is
– How it can help your business
– How to apply one in your business activities
What is a growth mindset?
More than 30 years ago, renowned psychologist Dr Carol Dweck coined the terms fixed and growth mindset. They describe the underlying beliefs people have about learning and intelligence: individuals with a growth mindset understand that abilities and intelligence can be developed, those with a fixed mindset feel that their abilities, talents, and intelligence are more permanent and predetermined.
A growth mindset means you’re more likely to take on challenges, learning to improve and refine your activities – whether that’s while learning something new or developing friendships. People with growth mindsets tend to be more successful than those with a fixed mindset, working hard and accepting challenges with a can-do attitude.
Companies with a growth mindset
Working with more than 130,000 businesses – including online stores, SaaS firms and ecommerce platforms – we support tens of thousands of entrepreneurs and business leaders. These conversations, meetings, and support sessions got us thinking: does the concept of a growth mindset work on an organisational level?
We thought we could help our customers by exploring this idea, so we didn’t stop there. Instead we worked with research specialists Coleman Parkes to survey 2,500 online retailers across five European countries and five sectors. The survey asked respondents to rate their business on a scale of 1-5 against seven statements representing a growth mindset. If respondents scored more than 28 points (from a possible 35), their businesses were deemed to exhibit a growth mindset.
What a growth mindset can bring to your business
By analysing the data, we found that around one-third of European SMEs have one, while two-thirds have a fixed mindset. We also saw how adopting a growth mindset can help companies. Businesses with a growth mindset know that they can grow their business through dedication and hard work. They can outperform their fixed mindset rivals by learning from what they do.
The data also reveals that businesses with a growth mindset have a significantly wider field of view than those with a fixed mindset. This means they’re more adaptable and open to new trends, making them more active in constantly refining and improving their online activities to get ahead.
We also learned that growth mindset businesses:
– Make more money: Generating 17% more revenue annually than their fixed-mindset counterparts.
– Are more international: They are almost twice as likely to sell internationally than their fixed-mindset counterparts.
– Offer more ways to pay: Allowing them to attract more customers and boost conversions.
– Are focused on overcoming challenges: Improving customer experience, perfecting marketing, and using customer insights to drive growth.
– Convert shoppers better: They address the root causes of the problem – complex checkout, authorisation speed, etc. – to help visitors feel confident to complete a purchase.
– Are more resilient: Data shows that they generated 28% more sales during the first wave of the coronavirus pandemic than the 21% fixed-mindset retailers.
Growth mindset merchants generate substantially more revenue than fixed mindset merchants. They are more resilient – driving more sales in a difficult period. They’re twice as likely to sell globally, their conversion rates are higher, they address more challenges, and they offer their customers more payment methods.
How to adopt a growth mindset
How do you adopt a growth mindset?
1. Recognise existing and emerging challenges – embrace them, learn about them and address them as soon as you can.
2. Operationalise learning across your organisation – this helps ensure you constantly develop new abilities.
3. Accept that some failures are inevitable – by doing so, you can learn from them, improve, and come back stronger.
4. Move quickly – don’t focus on perfection. Execute and test activities quickly and learn what works (and what doesn’t).
5. Understand that money isn’t everything – instead, create value for your customers and develop relationships that last.
6. Talk to the people that matter – customers, colleagues, other business owners. Encourage communication that helps improve what you do.
7. Be objective – don’t let business get personal, calmly assess what you are doing right and wrong.
Achieving a growth mindset – a case study
Let’s look at digital marketing platform Internet Marketing Unie (IMU), which was founded by Tonny Loorbach in 2010. IMU helps entrepreneurs around Europe and has developed software solutions that they offer to customers. Their story is an excellent example of a business with a growth mindset (that Tonny started while sitting around his kitchen table).
Co-owner Martijn van Tongeren’s story also perfectly illustrates IMU’s growth mindset. He started working in customer service for the firm in 2014 before working his way up to become co-owner. Van Tongeren says that a growth mindset means constantly looking to take on challenges and refine what they do has been instrumental in helping the business flourish. “A growth mindset is in the DNA of IMU,” he explains, “we wired it through the entire company; it is at the heart of everything that we do. It connects us all, and we focus on growth for the company as well as our people.”
A growth mindset means that you are willing to continuously learn and look for the best way to drive growth, Van Tongeren says. “That means not always taking the easy option,” he explains. “If there isn’t a good option, look for it. Focus on the right sources of information, and see how you can use those to help the business develop and adapt. We learn all the time, which has enabled us to keep progressing and improving and doing better than before.”
So, how did IMU adopt a growth mindset? “Persistence is key,” says Van Tongeren, “if you constantly explore new things and look to create impact, growth is inevitable. Foster an environment and culture focused on growth. That also helps create happiness, because staying still is usually quite boring.”
The results speak for themselves. IMU now employs 40 people and has more than doubled its revenue in the last three years alone. “It’s great to see the business grow,” Van Tongeren says. “But it’s also been crucial for our team’s happiness. We have a culture where everyone is motivated and can rely on each other to take on challenges and keep driving us onwards.
“Growth should be the baseline for companies and people. As long as you can grow, you can stay motivated and keep your people motivated. And that’s key to making sure your business can thrive.”
A successful future (when it’s ok to fail)
A growth mindset might have seemed unclear, but you should now understand what it is and – more importantly – how it can help your business.
If you’re planning on working on some of the above points, remember that this transformation won’t happen overnight. Understand that making small changes and slowly improving what you do is necessary. Reward efforts and improvements to help foster a growth mindset in all parts of your business, and emphasise that failures will happen – just make sure you know how to learn from them. By doing so, you’ll lay the foundation for future successes, where even failures can help your business be better than ever.
Grow your way with Mollie
At Mollie, we offer an effortless payments solution that increases conversion by providing multiple payment methods and a seamless, custom-branded checkout experience. We provide easy onboarding, local support, no lock-in contracts, and transparent pricing. Find out more about payments with Mollie.
Working with more than 130,000 merchants, we’ve identified four dimensions that can help SMEs challenge retail’s global giants. This is the final article in a series focusing on these different factors. The others are our guide to driving sales using personalised ecommerce, creating a world-class commercial infrastructure, and finding the right tech tools to grow your online business.