What sets apart a great leader from an average or poor leader?

You might be inclined to respond to this question with answers like these: “their ability to make effective decisions”; “the degree to which they possess various positive leadership qualities, like humility, compassion, and authenticity”; or “their actions or behaviors.” You could probably come up with an almost endless list of qualities and actions.

These answers are not altogether incorrect. In fact, they are supported by decades of leadership research. But because these perspectives have been so well supported by leadership research, few practitioners look beyond decision-making, qualities and actions to ask what drives them.

There is an element that does drive leaders’ decision-making, qualities and actions, and it is one that relatively no one is talking about. Yet, if we better understood this element and its power, we could enhance those decision-making, qualities and actions. To introduce this element, consider the impression you get when reading this list of words:

• Challenge and failure
• Disagreement
• Risk
• An underperforming employee

Leaders perceive each of these situations differently. Some see challenge and failure as things to avoid, but others see them as opportunities to learn and grow. Some see disagreement as a threat, but others see it as an opportunity to improve their thinking. Some see risk as something to avoid, but others see it as a necessary condition for success. Some see underperforming employees as wastes of space, but others see them as opportunities to learn about how they can better provide an environment where more employees can succeed.

Which of these leaders will make better decisions, have more positive qualities and engage in more effective actions? Whom would you rather follow?

What sets apart a great leader from an average or poor leader? The simple answer is how they see the world they operate in. The technical answer is their mindset.

Mindset experts Alia Crum, Peter Salovey and Shawn Achor define mindsets as individuals’ mental frames that create a lens through which they selectively organize and encode information, orienting them toward a distinct way of understanding experiences and guiding them toward corresponding actions and responses.

There are four sets of mindsets that drive leaders’ decision-making, qualities and actions. They all relate to how leaders see challenges and failures, disagreement, risk, and underperforming employees. They exist on a continuum from negative to positive, and the more positive a person’s mindset, the more effective he or she will be as a leader.

1. Fixed and Growth Mindsets

A growth mindset is the belief that you are able to change your talents, abilities and intelligence and that others are able to do the same. It differs from a fixed mindset, which is the belief that you are unable to change your talents, abilities and intelligence.

Leaders with a fixed mindset prioritize looking good and validation. They do not believe that they can improve, so it’s important for them to be seen as someone who possesses a high degree of talent, ability and intelligence. As a consequence, they seek to avoid challenges and failure.

Leaders with a growth mindset believe they can change their talents, abilities and intelligence, and they are not concerned about their appearance. Their priority is to learn and grow, and their growth mindset allows them to see challenges and failure as opportunities to learn and develop. Thus, they embrace rather than avoid them.

2. Open and Closed Mindsets

When leaders possess an open mindset, they are open to the ideas of others and are willing to take those ideas seriously, while being open to the possibility that they could be wrong. A person with a closed mindset is not open to the ideas of others and believes he or she is nearly always right.

As Shane Parrish, a business investor and popular blogger and podcaster, writes, “Closed-minded people would never consider that they could actually be closed-minded. In fact, their perceived open-mindedness is what’s so dangerous.”

Again, closed and open mindsets drive leaders to see things differently. Specifically, leaders with a closed mindset are focused on being right and being seen as being right. As such, they are uncomfortable with ambiguity. If they seek out ideas from others, they only seek out the ideas that confirm their perspective, and they see disagreements as threats.

Leaders with an open mindset, on the other hand, focus on finding truth, even if it means that they are wrong. They are more comfortable with ambiguity, they seek out new and different perspectives, and they see disagreements as opportunities to improve their thinking.

3. Prevention and Promotion Mindsets

Leaders with a promotion mindset are focused on winning and gains, while leaders with a prevention mindset are focused on not losing and avoiding problems.

Leaders with a prevention mindset are primarily concerned about their ship not sinking. As such, they are focused on avoiding problems, not taking risks and maintaining the status quo. Leaders with a promotion mindset are focused on what is truly important: reaching a specific goal, objective or destination. As such, they anticipate problems, are open to take risks (believing that without risk comes no rewards) and seek to advance rather than maintain the status quo.

The ultimate difference between these two mindsets is that leaders with a prevention mindset end up being blown about by the winds and the currents of their sea, ending up in a destination not of their own design. Leaders with a promotion mindset are willing to brave the winds and currents to end up where they want to be.

4. Inward and Outward Mindsets

Leaders with an inward mindset see the people they lead as objects. Leaders with an outward mindset see them as people and valuable partners.

When leaders have an inward mindset, they see themselves as superior and their followers as instruments to do their bidding. Thus, when an employee is underperforming, they see replacing the instrument for a better one as the best course of action. When leaders have an outward mindset, they see themselves as equals of, if not inferior to, their followers. Thus, when an employee is underperforming, they seek to understand what is preventing them from performing at a higher level. They are willing to ask themselves, “Who am I being that their light is not shining?”

What sets apart a great leader from an average or poor leader? It’s an element that almost no one is talking about – their mindsets – which, if not overlooked, can be harnessed to develop leaders effectively.