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