By Leigh Gant, Education Manager
5 September 2022
The only real mistake is the one from which we learn nothing – Henry Ford
I recently had the pleasure of talking with Phil Muscatello on his podcast Shares For Beginners. It was wonderful to begin exploring the similarities between my past career coaching athletes and now developing investor education.
Upon reflection and reviewing the recent Education and Events survey responses, there is an area of coaching that I focussed heavily on that is worth sharing. Often, athletes came to me describing how they were stuck, listing obstacles and challenges that held them back from achieving their goals and reaching the next level in their sports career.
I would interview these potential clients, sometimes for hours, to figure out if we could work together. That decision would essentially be based on one thing: can this athlete adopt mindset changes that will allow them to do what is needed to progress? The problem is, many of them believed their mindset couldn’t change. They believed their skills and intelligence were innate and that there was nothing more to learn. These were the athletes I couldn’t help.
‘The thing that separates the best from the rest is mindset’ – Bianca Andreescu, 2019 US Open Champion.
Psychology Professor Carol Dweck from Stanford University has examined the notion of mindset, and argues that there are two fundamental mindsets that people use: the fixed mindset and the growth mindset.
Those with a fixed mindset believe they are born with a certain amount of intelligence or talent, and these abilities cannot be improved. A fixed mindset is characterised by the interpretation of situations as unchangeable. It leaves little or no room for personal agency. In jobs, relationships, and daily operations, challenges are absolute. How one engages with those challenges (and their perceived level of agency within them) will influence further behaviour.
Meanwhile, a growth mindset is not as limiting as a fixed mindset. People that possess a growth mindset believe abilities such as intelligence, skills and/or athleticism can be improved through hard work and persistence. People with a growth mindset understand that they can work to change themselves and their surroundings if they put in the time and effort. They seek out challenges, are persistent, learn from feedback, and are inspired by the success of others. They avoid seeing things in binaries (good/bad, win/lose, success/failure), and see skills or mastery as the result of practice over time.
People with a growth mindset generate a capacity for lifelong learning and constantly strive to improve.
When presented with an obstacle, those possessing a growth mindset tend to rise to the challenge. If you doubt yourself, you already lost half the battle. A fixed mindset can make you fail before you even start, and you might find yourself giving up early, at the smallest sign of frustration.
Have you ever said to yourself, “I’m never going to ” (learn valuation techniques/understand business fundamentals/read charts/etc.) ?
This is a fixed mindset statement. People with a fixed mindset see things as largely unchangeable, and if they are changeable not worth the effort. With a fixed mindset, you don’t have a chance to develop your potential.
Instead, try rewording this into a growth mindset statement. “I don’t know how to value an individual business YET.”
This simple rephrasing gives you the power to develop your abilities through dedication, perseverance, and the right strategy.
Dweck explains, “Mindsets are just beliefs. They’re powerful beliefs, but they’re just something in your mind, and you can change your mind.” Dweck created this 4-step process below and I recommend anyone experiment with it.
How to Shift From a Fixed to a Growth Mindset
- Step 1: Learn to hear your fixed mindset “voice.”
- Step 2: Recognize that you have a choice.
- Step 3: Talk back to it with a growth mindset voice.
- Step 4: Take the growth mindset action.
Having a growth mindset will also help you in other areas of your life. What areas of your investing, health and fitness, career, relationships do you want to shift from a fixed to growth mindset?
The only way you can change your mindset is by entering the growth stage and leaving your comfort zone behind. Try new ideas, try different approaches and be curious.
“Insanity is trying the same thing over and over and expecting the same results.” – Albert Einstein
Becoming a better investor, a better partner, a better colleague, and a better human, really comes down to the power of changing your mindset, both consciously and subconsciously.
Doing so can have a profound impact on your happiness and your pathway to success.
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About the Author: Leigh Gant is a seasoned entrepreneur and investor who specialises in scaling and growing businesses, with a passion for Buffett and Munger-style investing. For more insights and further information, visit Unio Growth Partners or connect with Leigh directly for more insights.
