How to Develop Challenge Driven Leaders in Traditional Companies

Ed Marsh | Aug 24, 2018

Beyond Growth Mindset - You Need to Groom Challenge Driven Leaders

Introduction to SignalsFromTheOP

Guide to episode

  1. Growth Mindset and Challenge Driven Leadership share some commonalities, but they're different
  2. Disruption is creating this evolving leadership style - it's not common in traditional companies
  3. Challenge driven leadership will probably rub some folks in traditional businesses the wrong way
  4. Building a beta team internally allows companies to cultivate talent within firewalls to minimize disruption to the core business in the meantime

Transcript follows

Hi, I’m Ed Marsh. Welcome to this episode of Signals from the OP. These are periodic video blogs which I use to provide early warning like a military observation post. But rather than look for enemy sappers, here I keep an eye out for issues of potential strategic importance for B2B industrial companies.

Today’s topic is the role of growth mindset in challenge driven leadership.

Let’s start with a couple terms.

Growth Mindset

Carole Dweck’s research led her to develop the concept and terminology of fixed vs. growth mindset. Folks with a fixed mindset tend to accept or even resign themselves to conditions about themselves, their organizations and their environment. Language they might use includes “That’s the way we’ve done it.” “If we had more resources we could do a lot more.” or even “That’s the best I can do.”

In contrast, those with a growth mindset see any existing personal or organizational limitations as things to be circumvented, developed or overcome. They tend to be impatient, perhaps irreverent, optimistic and resilient.

This is a great topic that I’d recommend you dig into to understand and track among your management teams and organizations. is a good resource.

Challenge Driven Leadership

The second core idea is challenge driven leadership. I’ve spoken often here about a modified challenger sales model - this is different and it’s based on some work by PWCs publishing group Strat & Biz. It popped up on many people's radar recently through an article in in the WSJ.

The article identifies a new type of exec that’s shaking things up.

Some of the key attributes that Strat & Biz identifies among challenge leaders are:

  • They love finding and solving problems
  • Hate office politics
  • Bored with status quo
  • Entrepreneurial
  • Not interested in fancy trappings of the role
  • Build team by attracting problem solvers to participate, not lots of handholding and nurturing
  • Value resourcefulness
  • T-shaped skills - broad high level understanding of multiple fields, and a mile deep in their own

Sound like Jeff Bezos for instance?

The key is really to develop bigger picture, longer term perspective that, as Strat& Biz says “transcends the expediencies of the moment.”

So how do the two relate? Growth mindset and challenge driven leadership?

Related but different

It seems obvious that the challenge driven leader by definition is a growth mindset kind of person. So maybe if you had a venn diagram all challenge driven leaders would have a growth mindset, although not everyone with a growth mindset might be a challenge-driven leader.

This is an important point as I tie this back to strategy and disruption for industrial manufacturers.

There aren’t many existing company leaders in traditional middle market manufacturing firms that are challenge driven leaders - at least not in my experience. Those people are chasing startups and disruptive technology.

However, there are a fair number of growth mindset leaders in traditional businesses. They may feel constrained but they recognize that the constraints could be overcome with focus, investment, etc.

So when we think about how a company can prepare to avoid the challenges and leverage the opportunities of disruption, the ability to visualize much bigger challenges and opportunities becomes important. And then executing on them requires attracting the right kind of team that are equally eager to embrace and overcome problems. And those are going to be the domain of a different sort of leader in many cases - probably a challenge-driven leader.

Cultivating Talent 

But if I wanted to build a lasting legacy - perhaps with an ESOP or for family to continue to participate in, then I’d be looking for a challenge driven leader.

Do you boot yourself and put them in your chair? Probably not a good move. You’d end up freaking out a lot of your traditional employees - both the personality and style, and the pace and scope of changes would be disquieting.

Build an internal beta site

But I’ve laid out a model before that could offer the perfect hybrid solution for a traditional company to begin to incorporate some of this. A skunkworks would provide a safe, contained and controlled environment to begin to experiment. Given a multi disciplinary team, an emerging challenge driven leader would operate within a framework and budget developing ideas and running pilots.

This would allow an owner to groom the talent, experiment with ideas, introduce the company to some rather different approaches, but limit the fallout in the short term.

This would position the company to do the important research, discovery, modeling and piloting that are required before rolling out very different solutions/products and services, but do it in a way that protects the core business in the interim.

It’s going to create some uncomfortable moments for sure as friction develops between impatient disrupters and conservative types. That’s going to take management savvy - and emotional intelligence that isn’t a forte of the challenge driven leader. But it’s going to be far less uncomfortable than watching competitors out disrupt them as technology and business models evolve in ways they didn’t anticipate. Like so much in life it’s a question of short term discomfort in pursuit of long term strength.

So what about installing a challenge driven leader someone in your organization and giving them room to run?

I’m Ed Marsh and thanks for joining me for this episode of Signals from the OP. If you enjoyed it, please share it and subscribe which you can do at