James Ferrell

Co-founder and Managing Partner, The Arbinger Institute

Salt Lake City, Utah

As a principal at the Arbinger Institute, James Ferrell heads up the development of its training and consulting programs where he has trained internationally in industries including healthcare, military, education, biotechnology, finance, government, retail, professional services, hospitality, and more. He also has authored or co-authored multiple bestselling books, including Leadership and Self-Deception and The Anatomy of Peace. In collaboration with his colleagues at Arbinger, Ferrell's latest book is The Outward Mindset.

Tell us about your work at the Arbinger Institute.

We are a global training and consulting firm that specializes in changing mindsets—that's foundationally what we do. Research, including recent studies by McKinsey & Company, shows that organizations that identify and focus on changing mindsets are four times more successful in their change efforts than organizations that neglect mindset change.

In most organizations, the lever leaders pull when they're trying to change things is the behavioral lever only. The problem with that is that, although behaviors drive results, mindset actually drives behaviors. If you don't shift the mindset from which current behaviors are arising, you end up getting resistance to potential change efforts. People will snap back to their old ways. We change mindsets of organizations from what we call inward-mindset orientations to outward-mindset orientations. That's really our work—we turn organizations and their people outward; that's the way we put it.

What does having an outward mindset mean?

An outward mindset means that I am aware of, and interested in, other people's needs, objectives, and challenges, not just my own. When I have an inward mindset, I have my head down, and I'm focusing on my own narrow lane of responsibility. I'm not really that interested in what others around me are up to and what their challenges are. Consequently, I end up making things harder for other people. I might not intend to, but I just do because I'm neither aware nor, frankly, that interested in what other people are trying to do.

With an outward mindset, that all changes. In an organizational context, I know I'm part of a collective—we're all trying to fire toward a particular result. It's incumbent on me to do my role, but I have to do it in a way that helps the people around me to be able to succeed at their roles too. I can only pull that off if I'm working with an outward mindset. If I'm acting with an inward mindset, I end up competing with others and getting in people's way, even when I'm not intending to.

What are some steps or tips for leaders to begin to change their mindsets and improve their organizations?

In The Outward Mindset, we write about this. There is a basic outward-mindset pattern that people can apply in organizations. The first of the three parts of the pattern is to see others. What we mean by that is to become curious and attentive to the needs, challenges, and objectives of those with whom one interacts and affects. When my mindset is outward, I'm going to be purposeful about building my awareness and understanding about other people. And if I'm a leader, I'm going to open up space and create opportunity within my organization so people are learning about each other's objectives, needs, and challenges.

The second step in the pattern is to adjust efforts. This means that once I have an understanding of what the people around me are trying to do, I adjust what I'm doing so that I can make my own efforts more helpful to what they're doing.

The third very critical part has to do with impact. With an inward mindset, I focus on what I do. But with an outward mindset, I focus on the impact of what I do. It's not just that I'm accountable for what I do; I'm actually accountable for my impact on others—the impact on others of what I do, whether I'm making their work harder or easier, for example. So step three in the outward-mindset pattern is to measure impact.

Then I iterate this pattern. I see others again, I adjust efforts again, and I measure my impact again. As people follow this iterative pattern, they end up operating more with an outward mindset. However, too often this is precisely the opposite of what people commonly do. Often people start by focusing on what they themselves want to do or accomplish. Then they try to get others to act in ways that help them with what they want to do. From our perspective, and in our experience, this common approach is backward. The outward-pattern flips the direction of our strategies and our efforts.

Can you take that a step further about how it changes the organization?

Sure, and this applies both at an individual level (in my own role) as well as at the enterprise level. A whole enterprise can have an outward-mindset orientation or an inward-mindset orientation. Let's think about the end-user customers of an organization, for example. We can do our work in such a way that we measure our success simply by what we deliver to people. But delivery or output metrics measure only what we ourselves have done. They don't yet measure what others are able to do as a result of what we've done—that is, they don't yet measure impact. The real question should be, "What impact are we having on our customers or our clients as a result of what we've done?" That's what we need to be measuring.

Here is an example from The Outward Mindset. It comes from one of our nonprofit clients—an organization that delivers clean water to residents in Africa. The way they traditionally measured success was by how much clean water they delivered to the villages they served. As they began to apply outward-mindset principles, however, they realized that they needed to hold themselves accountable not only for what they delivered but for the impact of what they delivered. The question was, "What's the impact of the clean water? Why is it important to the people in the villages that they get the clean water?"

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As it turns out, the parents in the villages cared about clean water primarily because it enabled them to keep their children in school. Without clean water, their kids get sick, and if they get sick, they can't go to school. If they don't go to school, the traveling teachers who come village to village move on to other places, making it far more difficult for the villagers' children to get an education and escape poverty.

Discovering this, the organization's workers realized that they weren't really in the clean water business; they were in the helping-kids-get-to-school business. This changed their entire business. Days in school replaced water delivered as their primary success metric. What's most common—both at an individual level and at the organizational level—is that most people measure success not based on impact but based on deliverables. An outward mindset says, "Look, you've got to measure deliverables of course, but the bigger question is, 'What's the purpose of what you're delivering?'" That is, what impact is hoped for? What impact is wanted by those who would be consuming those products or services?

That's true internally in an organization as well. What's my impact on internal customers? I have to understand what other people's objectives are in order to know whether I'm moving the needle on their objectives by what I'm delivering.

We hear more about the importance of trust in an organization. In your opinion, how do we begin to develop trust in an organization and make sure it continues?

The outward mindset is the foundation of trust. In order to trust others, people need to know that others aren't just out for themselves. The inward-mindset tendency to privilege oneself over others is at the heart of erosions of trust.

In our experience, you cannot build a trusting culture unless you are building an outward-mindset culture because, in the very nature of things, when people's mindsets are outward, they realize that they're not just in this for themselves. They realize that they are fighting on the same team and have obligations to one another. So, that's part one. The second part of developing trust is that people have to deliver on their responsibilities. If your objective is to deliver X by a certain point in time and I watch you deliver X by that time over and over again, then I'll realize that I can count on you.

When you put these two elements together—an outward-mindset culture where people hold themselves accountable for their impact on each other and the dependable delivery of positive impact that an outward mindset engenders—you end up with a culture that's high performing and high trust.

What are some hot topics or trends within talent development that you're following?

The topics that interest me most are the ones that are perennially on the list because people continue to struggle with them. Take, for example, performance management. How can we improve performance review and performance management processes, which are systemically broken in so many organizations? This is a huge point of emphasis for us in our work because we help people to deploy performance management systems that help people be accountable not just for what they do but also for the impact of what they do.

There's also the ongoing issue of leader preparation and leadership improvement. Often people are elevated into leadership roles not based on leadership skills they've demonstrated but on other characteristics such as technical or task excellence. How can you actually build leadership skills and management ability into people who are skilled in their more technical areas? That's a huge issue across organizations.

In a study by Stanford University and the Miles Group in 2013, CEOs said that the skill they most feel they need to improve upon is conflict resolution. Conflict resolution isn't customarily on the talent development list, but this important study showed that it should be. CEOs and other leaders frequently need to resolve conflicts in productive ways inside, between, and outside their organizations. Most leaders haven't received the kind of training and understanding that equips them to excel in this critical area of responsibility.

Are there any other areas that are hot-button?

More and more people are recognizing that doing things to others is not nearly as helpful or effective as helping people to be able to do those things themselves. Consider, for example, the traditional topics of alignment and accountability. From our perspective, the goal is not alignment but self-alignment, and not holding people accountable but equipping people to be self-accountable.

So, how do you develop people in such a way, and how do you work a performance management system in such a way, that people become self-accountable—that they know how to do it and they become self-correcting? As we go forward, these sorts of self-enabled qualities are going to become increasingly important because they allow people and organizations to become more nimble, which becomes more important for survival and success with each passing day.

What do you enjoy doing outside of your work for rest or relaxation?

This doesn't really count for rest or relaxation, but it's for rejuvenation: I bike. I typically get up in the morning early before work while it's still dark and I get on my road bike and I'll ride 40 to 60 miles or so before work. That energizes me. In addition to that, if I just want to relax, I like to read.