Pfeffer perfectly frames the topics in the first paragraph:
Here is a paradox. In the financial markets, investment information is rapidly and efficiently diffused. New product and service innovations, be they junk bonds, new forms of options, or debt securities that allocate and price risk in an innovative fashion, get rapidly copied by competitors. But in the “managerial knowledge” marketplace, there is little evidence of much diffusion of ideas or innovative business models and management practices.
And follows by giving some compelling examples that illustrates his case in the way that competitors struggled to imitate the success of Southwest Airlines, Harrah’s Entertainment and Whole Foods had in their respective domains.
He argues that at the root of this problem are the mental-models and mindsets of senior leaders:
[I]n order to get different results, you must do different things.. [I]n order to do different things, at least on a consistent, systematic basis over a sustained time period, companies and their people actually must begin to think differently. That’s why mental models affect organizational performance and why they are a high leverage place for human resources to focus its organizational interventions.
Every organizational intervention or management practice—be it some form of incentive compensation, performance management system, or set of measurement practices—necessarily relies on some implicit or explicit model of human behavior and beliefs about the determinants of individual and organizational performance. It is therefore just logical that:
(a) success or failure is determined, in part, by these mental models or ways of viewing people and organizations, and
(b) in order to change practices and interventions, mindsets or mental models must inevitably be an important focus of attention.
He then gives the detailed example that the Trium Group uses to help leaders see the different between a “responsible” and a “victim” mindsets, which I will not share here so I won’t spoil your fun in reading the actual paper.
Lastly, Pfeffer leaves us with the following point to consider:
In addition to being concerned with the company culture, human resources must be concerned with the mental models and mind-sets of the people in the company, particularly its leaders. Because what we do comes from what and how we think, intervening to uncover and affect mental models may be the most important and high-leverage activity HR can perform.
Reflecting on my own personal experience, this certainly rings true. However the one example referenced in the paper on exploring (not even changing) different mindsets, is not a strong enough outline for a more systemic approach for identifying the most critical mindsets that inhibit an organization’s performance and then taking proactive action to change them. It looks like more research, on my behalf at least, will be required in order to turn this powerful idea into an even more powerful tool.