When a Great Business Falls Into The Fixed Mindset Trap

Fixed Mindset Business

If only everything in life was as reliable as a Volkswagen

Think Volkswagen (VW) and what immediately springs to mind? The Ferdinand Porsche designed ‘people’s car’, inspiration for the iconic VW Beetle? Perhaps the market dominating manufacturers emphasis on safety? Reliability? An environmentally friendly ethos?

In 2014 one out of every ten cars sold was a VW, leading to the brand becoming the world’s top selling car manufacturer in 2015. The brand was solid, reliable and trusted around the globe. Rumbling on the near horizon however, were the dark clouds of ‘Dieselgate’.

The Dieselgate scandal

Dieselgate or ‘dieseldupe’ as some have dubbed it, is the story of an admired and trusted company secreting away in their diesel vehicles, a ‘defeat device’. The purpose of the defeat device? To detect when the car’s engine was tested for harmful emissions and to adjust the level of pollutants present to a less accurate but more agreeable level. The rigged test results almost halved the levels of some toxic emissions. In short, the defeat device served to cheat the testing software, the customer and the environment.

The fixed mindset trap

Fast forward to VW’s initial reaction to the discovery of the defeat device. The first response from those at the very top of VW laid bare a culture of fixed mindset thinking around the criminal activity. Here we’ll focus on three classic behaviours that highlight VW’s fall into the fixed mindset trap.

1. A Fixed Mindset Business – Accountability and a Culture of Blame

In October, 2015, the then CEO of VW, Michael Horn told a Congressional hearing in the United States, “This was not a corporate decision, from my point of view, and to my best knowledge today … this was a couple of software engineers who put this in for whatever reasons.” Rather than encourage an open line of inquiry, VW’s reflex was to deny widespread company knowledge of the unfolding scandal. VW pointed fingers and cast about for scapegoats. Instead of acknowledging just how deep the scandal was rooted within VW, the CEO deflected responsibility (even though he later admitted that he too struggled to believe it hadn’t been a corporate decision to install the defeat devices). Horn’s opaque approach only served to further damage the dependability of the VW brand.

After pleading guilty in 2017 to obstructing justice and violating the US Clean Air Act, senior managers at VW continued to deny involvement.

Even after former CEO Martin Winterkorn was indicted for conspiracy to fraud the US government and Rupert Stadler, head of VW’s Audi division was arrested on suspicion of involvement, VW steadfastly denied senior management involvement. Instead blame continued to be placed with lower level managers and engineers. The emerging culture of shame and blame set the scene that would reveal the further shortcomings of a fixed mindset culture at VW.

2. A Fixed Mindset Business – Cheating to Gain a Competitive Edge

Keen to gain a firmer foothold on the US market, VW emphasised the ability of their diesel cars to efficiently cover mile after mile, with impressive fuel economy, whilst keeping pollution to a minimum. VW had it’s eye on California, the biggest car market in the US but in 2010 the state introduced tough new regulations around nitrogen oxide emissions, an example that other states would soon follow. The car manufacturer that could confidently claim their vehicles could meet these new regulations with flying colours would have a huge market advantage. Desperate to corner the US market but unable to match the claims they’d made about performance, VW broke the rules to gain a competitive edge and illicitly included the cheat device in its cars.

Only when the US Environment Protection Agency (EPA) commissioned researchers at West Virginia University to monitor exhaust fumes of diesel cars both in the lab and on the road was the truth discovered.

3. A Fixed Mindset Business – Zero Transparency

In the weeks and months that followed the scandal, journalists and commentators talked of corporate silence and a sense of the shutters coming down at VW. Many of those involved either left VW or were suspended. Those who remained were fearful of the impact that further disclosure or discussion might have on them and the company.

In 2018, lawyer, Larry D. Thompson, appointed by the Court to monitor VW’s corporate rehabilitation reported that there was still a lack of transparency within the company, detailing how “The wrongful acts and crimes that were committed in the United States were enormous … The cultural change is going to be enormous, and it’s going to require lots of work on the part of the company.”

Notably, there was still no effective whistle blowing procedure, enabling employees to discuss problems without fear of retribution. Thompson also encountered a “reluctance to share certain information” requested by the US Court and a failure to hold executives accountable. Even Mathias Mueller, the former CEO at VW, following Michael Horn’s short time in the post, described an old school ‘centralistic leadership’ style of thinking amongst some that continued to harbour a resistance to change, he asked “I don’t know if you can imagine how difficult it is to change the mindset.” 

Want your business to avoid the fixed mindset trap? Growth Mindset at Work provides practical strategies and tools to take your performance to the next level. Take a deep dive into all aspects of growth mindset with us and develop your business with our consultancy, online programs or a bespoke program, delivered virtually to your team, find out more now.

Boeing 737 Max – a Fixed Mindset Approach?

fixed mindset Boeing 737 Max

How a Fixed Mindset Contributed to Events

Between October 2018 and March 2019, 346 people died in two Boeing airplane accidents. Scrutiny followed. The plane at the centre of each crash was Boeing’s fastest-selling airplane, the 737 Max. How did Boeing’s mindset around production of the 737 Max contribute to events leading to these accidents? Let’s focus on three crucial areas that can typify a fixed mindset business culture:

  1. A willingness to cut corners under pressure
  2. The value of counterpoint in business
  3. Minimising, negating and ignoring critical feedback

Setting the scene: Boeing playing catch up

Boeing’s 737 and the Airbus A320 have long been rivals. Each company hoping that their new generation of aircraft will outperform the other and take the lead as the best selling aircraft on the commercial market. The 737 Max was in direct competition with the newest offering from Airbus, the A320 neo. Frustratingly for Boeing, Lufthansa took delivery of the first A320 neo in January 2016, more than a year ahead of the first 737 Max delivery to its launch company.

When the 737 Max entered the market it was heralded as offering “the greatest flexibility, reliability and efficiency in the single-aisle market”. With almost 5000 orders from 100 customers around the world, demand was high. The Malaysian airline, Malindo, were the first to take delivery of the plane, it entered service on 22 May 2017. Less than two years later the 737 Max was grounded worldwide. How did a fixed mindset approach contribute to events?

A willingness to cut corners?

Unethical behaviour characterises a fixed mindset business culture. A fixed mindset culture can lead to a readiness to cut corners and be less than candid about procedures, processes and performance in order to gain a lead on competitors.

Even before the ill fated Ethiopian Airline Flight 302 crashed in March 2019, concerns had been raised by pilots about the handling of the plane and aviation insiders were questioning the rigour with which Boeing had tested and signed off on a number of safety issues.

The Federal Aviation Administration (the FAA – responsible for certificating the design and components of aircraft used in civil aviation) has long worked with companies to exchange information to improve safety. This type of certification is reliant on companies providing scrupulously accurate data. It is also reliant on the FAA possessing and applying sufficient checks and balances. Rigorously examining and cross checking information, enables bodies like the FAA to isolate and address possible risk factors.

It was reported that Boeing pressured the FAA to move through the certification process quickly. Dominic Gates, aerospace reporter for the Seattle Times, interviewed engineers and staff at Boeing and the FAA and reported that,

“several FAA technical experts said in interviews that as certification proceeded, managers prodded them to speed the process. Development of the MAX was lagging nine months behind the rival Airbus A320neo. Time was of the essence for Boeing.”

“There was constant pressure to re-evaluate our initial decisions,” one former engineer said. “And even after we had reassessed it … there was continued discussion by management about delegating even more items down to the Boeing Company.”

“There wasn’t a complete and proper review of the documents,” the former engineer added. “Review was rushed to reach certain certification dates.”

Ignoring Critical Feedback

When things go wrong, a fixed mindset approach towards the problem will see a company quickly looking to apportion blame. There have been multiple reports that pilots raised concerns about the handling of the 737 Max and that this critical feedback was initially ignored by Boeing. Minimising, negating and ignoring critical feedback is another example of a fixed mindset response when problems occur.

Using counterpoint for a growth mindset business

Engineers and technical experts raised concerns about Boeing’s new flight control system, MCAS (Maneuvering Characteristics Augmentation System). Indeed, the aerospace reporter, Dominic Gates, reported in The Seattle Times that the safety data that Boeing submitted to the FAA was flawed, he specifically highlighted three points:

  1. In order to avoid the 737 Max stalling, the MCAS was designed to move the vertical tail to push the nose down. In reality the power used to move the tail was 4 x the force that had been stated in the safety document.
  2. hadn’t considered the impact of the system resetting itself following the pilots response and what effect this repetition of pushing the nose down might have.
  3. activation of the “hazardous” danger level was triggered by a single sensor on the outside of the plane. 

Gates spoke to Boeing and FAA engineers to gain this information and shared his findings with Boeing and the FAA before the second crash of Ethiopian Airlines Flight 302. No response was forthcoming from Boeing.

The Route to Success – Learning From Failure With a Growth Mindset

The final air accident investigation report into the Lion Air crash is now available.  Boeing’s approach to the development and launch of the 737 Max provides food for thought for every business that aims to effectively learn from mistakes and adopt a growth mindset to challenges and setbacks. Specifically, Boeing’s experience highlights three points to reframe with a growth mindset:

  1. A transparent culture – even when the pressure is on, when your teams are clear about the company’s approach to business practices and expectations a culture of transparency avoids and negates the temptation to cut corners or hide problems.
  2. The value of counterpoint in business – the ability to actively engage with different perspectives and ideas is a powerful growth mindset tool.
  3. Openess to feedback – providing and receiving feedback is a growth mindset essential. When your business is open to internal and external feedback it enables you to improve, adapt and innovate quickly.

Want your business to avoid the fixed mindset pitfalls? Growth Mindset at Work provides practical strategies and tools to take your performance to the next level. Take a deep dive into all aspects of growth mindset with us and develop your business with our consultancy, online programs or a bespoke program, delivered virtually to your team, find out more now.