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Here is a paradox. In the financial markets,investment information is rapidly and effi-ciently diffused. New product and serviceinnovations, be they junk bonds, new formsof options, or debt securities that allocateand price risk in an innovative fashion, getrapidly copied by competitors. But in the“managerial knowledge” marketplace, thereis little evidence of much diffusion of ideasor innovative business models and manage-ment practices. How can I say this in aworld in which there are entire industriesdevoted to spreading concepts and bestpractices, and where management is occa-sionally accused of being too fad-driven?Because although there is certainly rapiddiffusion of language—the language of quality or Six Sigma, the language of em-

powerment and putting people first, the lan-guage of employee and customer loyalty,and so forth—in many cases, not much ac-tually changes in terms of what occurs on aday-to-day basis and in fundamental organi-zational business models.

A few examples will help illustrate how long it takes to successfully imitate effectivemanagement models. Southwest Airlineswas the most successful, productive, andprofitable U.S. airline. Its success waswidely described in books, cases, and articlesliterally decades before JetBlue, ATA, andothers in the United States, Europe, and

Asia finally began to successfully imitate itsapproach. Or, as described in an article inFortune , Toyota has been world class andahead of its competitors in automobile qual-

CHANGING MENTAL MODELS: HR’ S MOSTIMPORTANT TASK

Human Resource Management, Summer 2005, Vol. 44, No. 2, Pp. 123–128 © 2005 Wiley Periodicals, Inc. Published online in Wiley InterScience (www.interscience.wiley.com).DOI: 10.1002/hrm.20053

Jeffrey Pfeffer

In the “managerial knowledge” marketplace, there is little evidence of much diffusion of ideas,innovative business models, or management practices. In organizations not implementing whatthey know they should be doing based on experience and insight, and in companies not actingon the basis of the best available evidence, one main factor explains the difficulties—the men-tal models or mind-sets of senior leaders. How they are formed, what they are about, and a mul-titude of examples that show how those mind-sets can be improved are presented here.© 2005 Wiley Periodicals, Inc.

Correspondence to: Jeffrey Pfeffer, Thomas D. Dee II Professor of Organizational Behavior, Graduate School of Business, Stanford University, Stanford, CA 94305-5015, 650-723-2915, [email protected]



124 • H UMAN RESOURCE M ANAGEMENT , Summer 2005

ity and productivity for many years. Thiscompetitive advantage persists even thoughthe company gives plant tours to its competi-tors and its approach has been extensively described and analyzed in books and re-search articles. 1 Nevertheless, its rivals seemto have trouble learning from and about Toy-ota and catching up.

In the gambling business, Harrah’s En-tertainment has used evidence, gatheredfrom its customer database and from runningnumerous small experiments, to turn conven-tional wisdom upside down about how tomake money in the casino business. 2 Al-though Harrah’s has outperformed its rivalsand its approach has been widely docu-mented and praised, once again there is littleevidence of successful imitation of its man-agement techniques by others in the industry.

And want still another example of success notbeing imitated? Take Whole Foods, the natu-ral foods grocery store chain whose stock sells(as of summer 2004) at a price/earnings ratioof about 40—for a grocery store, no less—and has a five-year return to shareholders of more than 330%. Whole Foods’ big insightthat others can’t quite copy is that people ac-tually will pay more for high-quality food they want to eat. This strategic insight entails cus-tomizing both prepared food and even pack-aged goods selections for the local market in

recognition that tastes in food vary, giving upon the idea of driving product costs down asmuch as possible but enhancing margins inthe process.

In considering these and many similarcases of organizations confronting eitherknowing-doing problems—not implementingwhat they know they should be doing basedon experience and insight—or doing-know-ing problems—companies not acting on thebasis of the best available evidence—one fac-tor looms large as an explanation for the dif-ficulties: the mental models or mind-sets of senior leaders. As Mary Kathryn Clubb, for-merly a senior partner at Accenture, puts it,in order to get different results, you must dodifferent things. Clubb’s insight was that inorder to do different things, at least on a con-sistent, systematic basis over a sustainedtime period, companies and their people ac-tually must begin to think differently. That’s

why mental models affect organizational per-formance and why they are a high leverageplace for human resources to focus its orga-nizational interventions.

To return to the examples, Toyota’s suc-cess has much less to do with the specifictechniques of its quality process—cords tostop the production lines if there are defects,

just-in-time inventory systems, and particu-lar statistical techniques—and much more todo with a philosophy that supports quality (and productivity and innovative product de-sign as well). The techniques and specificpractices can be, and are, copied. The phi-losophy is much harder to inculcate. South-west Airlines’ success is not simply a result of not serving meals or flying only 737s onshort hauls, something many other airlineshave imitated. Instead, the key to South-

west’s performance is great service and out-standing productivity produced by (a) astrong culture built on a value system thatputs employees first, customers second, andshareholders third, and (b) a way of thinkingabout and treating employees that has builtloyalty and commitment even with a heavily unionized workforce.

Whole Foods has a different conceptionof its business, captured in part in its “Decla-ration of Interdependence,” that permits it tooperate differently and innovate to maintain

its position as the leading natural foods gro-cery store chain. And Harrah’s success ispremised on a different way of thinking aboutthe gambling business and what its strategy is. While other companies in the gaming in-dustry build “attractions” and are increasingly hotel, convention, and show businesses withsome gambling thrown in, Harrah’s remainsfocused on gambling and on systematically understanding how to make money in that in-dustry. This is accomplished in part by offer-ing a higher level of customer service. Also,Harrah’s focuses less on high rollers or fami-lies with small children (who have neitherlots of free time nor a lot of discretionary money) and does not try to attract people by “comping” rooms. Instead, it has identifiedand focused on its best customers, older play-ers who live nearby, see gambling as enter-tainment, and are much more interested infree chips than free rooms.

Whole Foods’big insight that

others can’tquite copy isthat peopleactually will

pay more for high-quality

food they wantto eat.



Changing Mental Models: HR’s Most Important Task • 125

It is, in fact, possible to uncover andchange mind-

sets and mental models and todo soreasonablyefficiently,reliably, and

predictably.

Emphasizing on the importance of mind-set and mental models as a way of under-standing the foundation of organizationalsuccess makes intuitive sense. Every organi-zational intervention or management prac-tice—be it some form of incentive compen-sation, performance management system, orset of measurement practices—necessarily relies on some implicit or explicit model of human behavior and beliefs about the deter-minants of individual and organizational per-formance. It is therefore just logical that (a)success or failure is determined, in part, by these mental models or ways of viewing peo-ple and organizations, and (b) in order tochange practices and interventions, mind-sets or mental models must inevitably be animportant focus of attention.

Where do these mental models or mind-

sets come from? First, most of our models of business and behavior are unconscious andimplicit. This suggests the first practical stepis to get people thinking about the implicitmodels of human behavior, organizationalperformance, and strategy that are impliedby their organization’s ongoing practices.Second, a lot of what we do is based on sim-ply repeating what we have done before, car-rying the past into the future. Companiesalso copy what others do—it is called bench-marking—sometimes without carefully con-

sidering whether or not their circumstancesare different and whether the experience of others, therefore, actually will generalize tothem. Belief and ideology play a large role inmanagement decisions as well. Incentive pay should work, people must take more respon-sibility for their benefits decisions, the gro-cery business is a low-margin business so wehave to drive down product and peoplecosts—and we all too infrequently examinethe evidence for and the assumptions under-lying these beliefs.

There are some straightforward implica-tions of these ideas for the human resourcesfunction and for human resource profession-als. One implication is that the HR functionmust intervene somewhat less with programsand particular techniques and practices, andinstead focus much more on helping both it-self and senior organizational leaders seeand, when necessary, change their mental

models. The ability to identify and help oth-ers discover their mind-sets and mental mod-els, and the capability to change those mind-sets when necessary, are possibly among themost critical capabilities an HR professionalcan have or acquire.

Many people apparently believe thatmental models or mind-sets are not a very useful focus for organizational interven-tion, since this sort of approach is seldomemployed. First, changing how peoplethink is going to be more difficult than justchanging what they do, since assumptionsand mind-sets are often deeply embeddedbelow the surface of conscious thought.Second, to some people, this type of inter-

vention seems “softer” than the more typi-cal HR interventions such as redesigningincentive plans, implementing new per-

formance management programs, and in-troducing human resource information sys-tems such as automated applicant trackingand computerized hiring systems. But inspite of the apparent difficulty and its lesstangible nature, changing the way peoplethink about situations is, in fact, the mostpowerful and useful way to ultimately change behavior and thereby affect organi-zational results.

An Example: The “Responsibility”

Mind-set

It is, in fact, possible to uncover and changemind-sets and mental models and to do soreasonably efficiently, reliably, and pre-dictably. Let me provide one specific exampleof how to diagnose and intervene to changeone particular mind-set. The general frame-work and process can, of course, be appliedto other mind-sets and mental models.

Some colleagues at a small boutiquestrategy implementation consulting company called The Trium Group, headquartered inSan Francisco, have been reasonably suc-cessful at helping companies make mind-settransitions, thus enhancing the companies’effectiveness. 3 Although their work focuseson several mental models, one importantfocus is on what they call the “responsibility”mind-set, which they contrast with the “vic-tim” perspective.




An important introductory comment:Responsibility is not the same as accounta-bility. Responsibility is probably a good thingfor companies and their cultures, but ac-countability is actually somewhat more prob-lematic. Accountability is, of course, an idea

very much in vogue these days. People incompanies and even schoolchildren are sup-posed to be held accountable for their deci-sions and actions—what they do has conse-quences, and they must feel thoseconsequences, be they positive or negative.There is a lot of evidence, however, that thegrowing emphasis on individual accountabil-ity—something, by the way, that is com-pletely inconsistent with the lessons of thequality movement—hinders learning andeven discovering mistakes.

The downside of the emphasis on indi-

vidual accountability is nicely illustrated by Jody Hoffer Gittell’s research on Southwestand American Airlines during the mid-1990s. 4 American Airlines’ then-CEORobert Crandall insisted that delays cometo his attention and get assigned to individ-uals and departments, so they would be ac-countable for their results and, moreover,would compete with each other to avoidcreating problems. One field manager toldGittell that when a plane making a connec-tion was late, “Crandall wants to see the

corpse.” The result of this approach was tocreate a culture of fear and infighting aspeople and units tried to pin the blame forproblems on others. Little learning oc-curred and on-time performance continuedto lag. At Southwest Airlines, the view wasthat delays were everyone’s problem, andwhen they occurred, people needed to work together to learn as much as possible sothat, to the extent possible, delays and otheroperational problems could be prevented inthe future. Gittell’s research showed thatthe Southwest system actually producedmore learning and more teamwork, result-ing in better system performance, than the

American Airlines approach with its empha-sis on assigning individual or departmentalaccountability and blame.

Responsibility implies something differ-ent. Responsibility entails feeling efficaciousand believing one has some obligation to

make the world, including the organizationalworld, in which one lives a better place.Building a responsibility mind-set or, for thatmatter, changing mind-sets in general, is aprocess that requires two things: (1) gettingpeople to acknowledge and accept that how they think about situations is under their vo-litional control—choice is possible; and (2)having them both emotionally experienceand think about the pros and cons of alter-native ways of thinking about situations.

What Trium does is have people pair upwith someone attending the same workshopor meeting. One person in the pair is thentold to tell the other a story that has the fol-lowing characteristics: (1) the incident isreal, (2) it is work-related, and (3) the persontelling the story felt like a victim—not incontrol, things were happening to the per-

son, there was little or nothing they could doabout what was occurring, and they were un-happy with what occurred. They are told totell the story in as convincing a way as possi-ble, so their partner actually believes thestory and feels their emotions. Then the rolesare reversed, and the partner tells his or her“victim” story to the other person.

The questions posed are: What does itfeel like to be a victim? and What are the ad-

vantages and disadvantages of the victimrole? One advantage of being in a victim role

is that one gets sympathy, and, in fact, weoften see people in subunits who bemoantheir shared and unfortunate fate with eachother, thereby building social solidarity. Cer-tainly, this feeling must be familiar to humanresource professionals, who often tell storiesto each other about how their chief financialofficer or other senior executive refused tolet them do the right thing or prevented themfrom implementing some culture-buildingprogram or practice that might have en-hanced the organization’s performance.

The next step in the mind-set changeprocess is to have each partner tell the samestories they just told each other, but now try-ing to imagine what it would be like to bemore in control or more responsible for whattranspired. Being in control does not meanthings would have necessarily turned outperfectly—organizations are interdependentsystems, and almost no one gets to have their

Responsibilityentails feeling

efficacious andbelieving onehas someobligation to

make the world,including theorganizational

world, in whichone lives abetter place.



Changing Mental Models: HR’s Most Important Task • 127

Actuallyintervening toaffect mental

models may beone of the moreefficient ways of

making thechanges thatHR so oftenadvocates tobuild a high-

performingculture.

way all the time. But the responsibility mind-set is simply seeing oneself as an actor af-fecting, or trying to affect, what goes onrather than being in a more passive role of having things happen to oneself.

The debriefing then continues by havingpeople think about the emotions they experi-enced with this responsibility mind-set and,again, discussing the advantages and disad-

vantages of adopting a responsibility mentalmodel. Not everything is great about beingresponsible; it is, for instance, hard work andcan feel burdensome. Feeling responsiblealso has many positive emotions and advan-tages associated with it, including feelingmore powerful and more connected.

The point of the exercise is not to havepeople necessarily come to believe one way of thinking is better than another. The ob-

jective is to have people recognize thateach of us has a choice—or actually a se-ries of choices—we make each day abouthow we approach the world and the prob-lems and opportunities it presents to us.

We can be victimized or responsible. In asimilar fashion, we can choose how we

view opponents and rivals and we canchoose what assumptions we make andhold about people and organizations andtheir capabilities and potential. We canchoose to see the grocery industry as a low-

margin business where minimizing costs isthe only way to compete or we can considera different approach. We can see casinos ashotels with gambling or, as Harrah’s does,see hotel rooms as places for gamblers tosleep, restaurants as places for gamblers toeat, parking lots as places for gamblers topark, and so forth. Each choice has conse-quences—for how we feel and, more im-portant, for what we do, the decisions wemake, and how we act in the situations weconfront in seeking to make our organiza-tions more effective and successful.

How HR Might Intervene inOrganizations

For many good and understandable rea-sons—for instance, that the urgent pres-sures of day-to-day operations drive out thelong-term planning and strategic thinking

and the important but more fundamentalchanges that get pushed into the future—human resources in many organizations ismostly involved in systems, operations, andthe pressing issues of setting pay, recruiting,and developing people. Even when HRadopts a more strategic role, it is mostly fo-cused on designing specific systems to pro-duce higher levels of performance in the im-mediate future.

There is certainly nothing wrong withthese activities or in focusing on criticalprocesses that are key to organizational suc-cess and dimensions used to evaluate theperformance of the HR function. All thesethings must get done, and when they aredone well, they can contribute to the organi-zation’s performance and success. Hiring, re-taining, and developing people are critical

activities in a world in which intellectualcapital and organizational capabilities are thekey source of competitive advantage, soworking on incentive-pay plans and improv-ing recruiting and hiring systems are impor-tant activities.

But I suggest there may be a potentially even more important activity that human re-sources might do—the diagnosing andchanging of mind-sets and mental models.

Actually intervening to affect mental modelsmay be one of the more efficient ways of

making the changes that HR so often advo-cates to build a high-performing culture. Inan environment in which there are many tasks, this may be the most important.

Moreover, it is possible to measure andmonitor the results of this process. Surveysand interviews can reveal whether or notthere is consensus in how people under-stand the causes of organizational perform-ance and the company’s strategy. And sur-

veys and interviews also can reveal themental models people use in thinking abouttheir role and work as well as other dimen-sions of their work environment and thecompany’s business model. Assessed overtime, it is possible to chart the results of var-ious interventions on the mental modelspeople use and, for that matter, the actionsand decisions they take.

Human resources has, at times, been de-scribed as one of the important keepers and



NOTES

1. Taylor, A., III. (1997, December). How Toyotadefies gravity. Fortune, pp. 100–108.

2. Loveman, G. (2003, May). Diamonds in the datamine. Harvard Business Review, pp. 109–113.

3. I have recommended Trium over the past few

years and meet with them occasionally to dis-cuss ideas. They came up with this particular in-tervention and first introduced me to their viewson the importance of mental models and mind-sets and how to think about changing them.

4. Gittell, J. H. (2003). The Southwest Airlinesway. New York: McGraw-Hill.


analysts of an organization’s culture. Cultureis a crucial determinant of many dimensionsof organizational performance, and HR’s cul-tural role is significant. What I have arguedhere is that there is another, possibly evenmore crucial role for HR. In addition to beingconcerned with the company culture, human

resources must be concerned with the mentalmodels and mind-sets of the people in thecompany, particularly its leaders. Becausewhat we do comes from what and how wethink, intervening to uncover and affect men-tal models may be the most important andhigh-leverage activity HR can perform.

Jeffrey Pfeffer received his BS and MS degrees from Carnegie Mellon University and his PhD from Stanford. He has held positions at the University of Illinois and theUniversity of California, Berkeley, and has taught at Stanford since 1979. He hastaught seminars in more than 27 countries. Pfeffer is the author of ten books andmore than 100 articles and book chapters.

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