McAbee: The hazards of entrenched thought
Jamie Dimon, the head of JPMorgan Chase, sat in front of Congress on Wednesday and coolly proclaimed that the mistakes his bank made that led to losses totaling at least $2 billion and possibly $5 billion were a result of a culture of “greed, arrogance, hubris, and a lack of attention to detail.”
While this admission would hardly startle you, it does give us a good example of what is called in the psychology field, “the fixed mindset.”
People with a fixed mindset believe their creator endows them with greater abilities than their fellow humans. They believe they possess a large amount of these fixed and precious abilities and need to prove they are among a lucky few and want to show the world they are indeed superior.
On the other side of the spectrum, you have a “growth mindset,” which is more oriented toward learning. Leaders with a growth mindset don’t waste time acting like geniuses. Instead, they spend their time and energy learning and creating environments where others can learn.
Carol Dweck, professor of Psychology at Stanford University and author of “Mindset: The New Psychology of Success,” has shown through her more than 20 years of research that, when given a choice of tasks to perform, people with a fixed mindset wish to showcase their abilities, whereas those with a growth mindset choose tasks they can learn from.
My friend, who also happens to be a banker, decided he would take up golf. As you might expect, at first he wasn’t very good at the game. He immediately quit and went back to those things at which he excelled. He just couldn’t stand being bad at something. I love him, but he is preoccupied with his brilliance and his superiority.
The problem with focusing too much on what you’re good at is you end up with a skewed view of your abilities. In order to validate the sense of “arrogance and hubris” that Mr. Dimon claimed is living in JPMorgan Chase, a biased attention toward events that confirm your magnificence forms and a sense of infallibility sets in.
Overconfidence is then fueled by this sense of infallibility, leading to a higher tolerance or an unhealthy appetite for risk. It’s not that they discount the risk – they know it exists – but they weigh the reward, their awesomeness, more heavily than someone with a growth mindset would.
The fixed mindset is contagious and can obviously permeate a corporate culture, or a government for that matter. Thus somehow, someway we end up with an institution in a supposedly capitalist market that is too big to fail.
We have enough people in leadership positions with a fixed mindset. We need to demand a growth mindset and encourage organizations to create contexts in which more people grow into the wise, knowledgeable, visionary, discerning, accountable and responsible leaders that we need.
Sadly, some Republicans even praised Mr. Dimon for his bank leadership and let him critique proposed financial regulations, while one Democrat sought his advice on how to fix the deficit. Perhaps this is showing a little more respect and confidence than Mr. Dimon’s performance would warrant.
I used to play a lot of golf when I was a teenager and in my early 20s. Recently, I’ve been thinking of picking up the game again. The only thing I can say for sure is that I will not be asking my friend the banker for a critique or advice.
Jeff McAbee lives in Breckenridge. Contact him at email@example.com or via Twitter @Jeff_McAbee.
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