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In Pursuit of the Growth-Mindset

Introduction

Do you believe that ability is fixed and needs to be proven? Or do you believe that ability can be developed through learning? Most of us would agree with the second statement. Yet in Mindset: The New Psychology of Success, Carol Dweck proves time and time again we humans often live in a fixed mindset (statement one), and often do so without even knowing it.

At the heart of Mindset: The New Psychology of Success, is a detailed walkthrough of two types of views you can adopt for yourself: (1) the fixed mindset and (2) the growth-mindset. Under the fixed mindset, you believe your qualities and that of others is cared in stone and this creates an urgency to prove yourself over and over. Under the growth-mindset, you believe that your basic qualities are things you can cultivate through your efforts, your strategies, and ultimately through learning. Each mindset can have profound affects on the way you lead your life and view life in general. The following blog post will unpack some of the things I learned through reading this book.

Inside the Mindsets

When you think of yourself under the eye of each mindset, you quickly realize that there are two meanings to everything the happens in life. Better said, there are two ways of seeing every interaction or happening… Two sides of the same coin. The following chart details the differences in mindsets across a few domains of life:

While far from exhaustive, the two lists above show pretty clearly that the fixed-mindset is limiting by its very nature. Yet Carol Dweck shows in her book that time and time again we have a hard time avoiding the fixed-mindset even though we understand that it hampers our ability to live our best life.

Don’t Buy Talent, Buy The Growth-Mindset

Sports has a funny way of helping us see things clearly (and often times less clearly [insert smiley face). When we think about the greatest athletes of all time in each of their domains, we don’t believe they got to their greatest heights by talent alone.

From Michael Jordan to Tiger Woods to Babe Ruth and back to Wilma Rudolph, we intellectually understand that talent + relentless hard work is the ultimate recipe for their success. Yet in our day to day lives, we shun this idea, oftentimes without even realizing. Malcolm Gladwell suggests that this happens because people prize natural endowment over earned ability. As much as our culture talks about individual effort and self-improvement, deep down, he argues, we revere the naturals.

The fixed-mindset can trick us into believing that natural talent should not need effort. In fact, those with the fixed-mindset even go as far as to think that effort in general is for the others, the less endowed. Carried away with their superiority, “these naturals” with the fixed-mindset never ask for help and never learn how to work hard nor cope with setbacks. This way of thinking can contribute to very negative outcomes Take a look at the following two images with quotes from two of the world’s greatest champions in sports:

Source: https://images.app.goo.gl/kdJcXXpyLBmcDAWW7
Source: https://images.app.goo.gl/javfLeDWQx2T4AWx7

Both Tiger Woods and Michael Jordan, two of the greatest athletes of all-time, clearly exhibit the growth-mindset. They stand out because of their commitment and effort to honing their craft. And this is the key to their overall success. People with the growth mindset think it’s nice to have talent, but that’s just the starting point.

Long-Term Corporate Health Needs Growth-Mindset Leadership

Evidence shows time and again, leaders with the fixed-mindset over the long-term lead organizations astray. From Lee Iacocca to Albert Dunlap, back to Ken Lay and Jeff Skilling, and over to Steve Cash and Jerry Levin, these fixed-mindset leaders fostered cultures of big egos, blind heroism, and entitlement, which eroded their company cultures and destroyed their chances at long-term sustainable corporate health.

Fixed-mindset leaders want to be the only big fish so they stifle others to make them feel a cut above the rest. These leaders foster environments full of negative assessments, stereotypes, and often prejudices that put their employees in the fixed-mindset ultimately holding them back from success. Instead of learning, growing, and moving the company forward, everyone within is more worried about being judged. This is why fixed-mindset leadership is so detrimental for long-term corporate health.

In contrast to these fixed-mindset heroes, stand growth-mindset leaders in action like Jack Welch, Lou Gerstner, and Anne Mulcahy that focused all their efforts in establishing cultures focused on learning, growth, and collaboration, not individual brilliance. Organizations steeped in the growth-mindset embody a zest for teaching and learning, an openness to giving and receiving feedback, and an ability to confront and surmount obstacles.

Working Towards a Growth-Mindset

Whether you are a parent, business leader, coach, spouse, or athlete, working towards the growth-mindset will have meaningful impact in your life. But how do we actually instill these principles in our lives? And how do we maintain the growth-mindset once “we get there?”

Moving towards a growth-mindset takes plenty of time and effort to achieve and maintain so it’s important to first understand this right at the outset. The growth-mindset starts with believing that all people can develop their abilities. This belief in people’s ability to grow and learn is the heart of the growth-mindset. Changing one’s mindset towards the growth-mindset also starts with a deep appreciation for hard work, trying new strategies, and consistently seeking input from others.

When you face setbacks, the growth-mindset is about responding with interest and treating these setbacks as opportunities for learning. In short, moving from a fixed-mindset to the growth-mindset is all about embracing all the things that have felt threatening: challenge, struggle, criticism, and setbacks.

Changing your mindset isn’t about picking up a few pointers here and there. It’s about seeing things in a new way. Embracing the growth-mindset is a way of life that will change you from a judge-and-be-judged framework to a learn-and-help-learn framework. It’s a journey that takes time but as Carol Dweck proves time and time again in her book, it’s a journey that is well worth taking.

In summary, the growth mindset looks a bit like this:

Source: Drawing by Nigel Holmes

The Extras

Brian Nwokedi’s Book Review on Goodreads

Direct Link to Book: Mindset: The New Psychology of Success

Amazon Link to Book: Buy Here

Ted Talk: The Power of Believing that you can Improve

Follow on Twitter: Mindset Works

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Nudge: Improving Decisions About Health, Wealth, and Happiness

Introduction

Human behavior is one of the hardest things to predict and understand. And the more we learn about ourselves, the more we realize that our decision making is very flawed. To put it bluntly, humans do not make decisions in a rational and truly thoughtful way. We are very flawed thinkers who have tendencies to make suboptimal decisions. Consequently, “nudges” can be used to alter our behavior towards more optimal outcomes.
Nudge was written in 2008 by the father of behavioral economics Richard Thaler with help from Cass Sunstein. As a major challenge to the concept of traditional Economic Man (Homo economicus), Nudge rejects this hyper-rational model of the individual. Instead it posits that individuals are simply Humans plagued with automatic thinking, biases, prejudices, irrationality, and uncertainty in their decision making.
The following picture from Raconteur summarizes just a few of our cognitive biases:
 

Humans are Humans … We Need Help (Nudges)

The entire premise of this book lies in the fact that Humans are not Economic Man. We don’t make unbiased forecasts. We don’t choose unfailingly well. And consequently, we need help to make more rational and optimal decisions in our lives. Enter the Nudge.
The simplest definition of a nudge is any factor that significantly alters the behavior of Humans in a predictable way without forbidding any options or significantly changing their economic incentives.

The key factor in the nudge is that it’s not a coercive action. Its focus is on trying to influence choices that will make Humans better off in the short and long terms. Thaler and Sunstein really believe that people should be free to do what they like and even opt into undesirable arrangements if they really want to. As policy makers and private institutions then, it’s on us to make it easier for people to exercise this freedom in the direction that makes their lives better, which is why we use the nudge. 
 

How We Set Up Choice Matters as Well

Because Humans are not Economic Man, the manner in which choices are presented to us can greatly influence our decisions. The best way to explain this concept (choice architecture) is to think through how food is offered in a cafeteria. By moving healthy food forward to the beginning of the line or to eye level, choice architects can greatly impact the frequency with which healthier food is chosen. It’s the same reason why retailers put impulse buy items near checkout and why they move items throughout their stores from place to place.
As a choice architect, you have the ability to influence outcomes simply by how you lay out and present options. Small yet seemingly insignificant details will have major impacts on people’s behavior.
 

In Closing

Humans have a tendency to move towards a state of inertia, and given this we don’t always make the decisions that are in our best interest. To quote the Guardian, “real men and women are inconsistent, ill-informed, weak-willed, and lazy. We can’t be bothered to fill out the form that would get us in the company pension plan, we forget to cancel subscriptions and we slump on the sofa eating doughnuts when we should be doing yoga. We are virtually incapable of balancing the temptations of today with the rewards of tomorrow; for some of us, even instant gratification isn’t quite quick enough.”
Nudges can save us from our inability to act rationally and the core of this book drives home this very point.

Extras

Brian Nwokedi’s Book Review on Goodreads
Brian Nwokedi’s Twitter
Direct Link to Book: Nudge
Author’s Website: Richard Thaler
Author’s Twitter: @R_Thaler
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My Financial Habit: Coffee Shops and Lattes

Purpose of this article: to show how my afternoon latte habit adds up and give you some thoughts on things to consider if you have a similar financial habit in your life

Overview

I have a financial confession to make… I love afternoon lattes and it’s costing me dearly! And like many of you out there, I know every single time I buy my latte, I am overpaying severely. According to USA Today’s coffee calculator, the markup on my latte can be as high as 300% depending on the coffee shop. But I will not deny that there is something quite special about a hot off the press latte!

How Much Is My Latte Habit Costing Me?

Based on an analysis of my spending over the last 535 days here are my financial stats:

• I have visited my local Charlotte coffee shops 71 different times, and have spent a total of $643 on afternoon lattes. The cost per trip is $9.04 (my goodness!)

• My average monthly spend over the last 18 months is $35.67

• The most I spent in one month was $81.23 in November 2017

• Over this time period, I spent roughly $1.20 a day on my latte habit.

At a 300% markup, my afternoon latte habit should have only costed $215 if I was disciplined enough to brew my own coffee. This is a difference of $428 extra that I have spent over the last 18 months.

What Could I have Done with the $428?

So, what could I have down with this additional $428? Here are a few things I could have done with that money…

• During the time period of 3/1/17 to 8/18/18 the S&P 500 returned an approximate +19.6%. Had I invested my $428 during this time period, I could be roughly $84 richer.

• Based on the Bureau of Transportation, I could have taken a round trip ticket to almost any US city. The average round trip price during the first three months of 2018 was $346.49.

• I could have used that money to pad my emergency savings account. Recent studies show that very few of us Americans have enough savings to cover a $1,000 emergency.

There are countless other more positive money management actions I could have pursued instead of spending this extra money on my afternoon latte habit. The point I am trying to make here isn’t to pass judgement on this money spending habits. It’s to make myself more aware of an area of spending that may not truly be worth it in the long run.

If you are like me, you probably have some areas of money management that you wish you were better at. I hope my financial habit confession was helpful for you to hear. Please let us know what financial habits you have and wish to break.