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What is Your Mindset? It Will Make All the Difference In the World.



Every time I read "Mindset" by Carol Dweck I remind myself how large a role mindset plays in any situation, and how changing your mindset can have a profound impact on nearly every aspect of your life.


This is especially true in the trading world. With failure and uncertainty being a dear friend to any good trader, mindset is an integral part in keeping motivated to succeed. Below is a fantastic synopsis by Maria Popova discussing the ideas discovered by Dweck and the huge importance it plays in our lives.


One of the most basic beliefs we carry about ourselves, Dweck found in her research, has to do with how we view and inhabit what we consider to be our personality.


A “fixed mindset” assumes that our character, intelligence, and creative ability are static givens which we can’t change in any meaningful way, and success is the affirmation of that inherent intelligence, an assessment of how those givens measure up against an equally fixed standard; striving for success and avoiding failure at all costs become a way of maintaining the sense of being smart or skilled.


A “growth mindset,” on the other hand, thrives on challenge and sees failure not as evidence of unintelligence but as a heartening springboard for growth and for stretching our existing abilities. Out of these two mindsets, which we manifest from a very early age, springs a great deal of our behavior, our relationship with success and failure in both professional and personal contexts, and ultimately our capacity for happiness.


The consequences of believing that intelligence and personality can be developed rather than being immutably engrained traits, Dweck found in her two decades of research with both children and adults, are remarkable.


She writes:

For twenty years, my research has shown that the view you adopt for yourself profoundly affects the way you lead your life. It can determine whether you become the person you want to be and whether you accomplish the things you value. How does this happen? How can a simple belief have the power to transform your psychology and, as a result, your life?

Believing that your qualities are carved in stone — the fixed mindset — creates an urgency to prove yourself over and over. If you have only a certain amount of intelligence, a certain personality, and a certain moral character — well, then you’d better prove that you have a healthy dose of them. It simply wouldn’t do to look or feel deficient in these most basic characteristics.

[…]

I’ve seen so many people with this one consuming goal of proving themselves—in the classroom, in their careers, and in their relationships. Every situation calls for a confirmation of their intelligence, personality, or character. Every situation is evaluated: Will I succeed or fail? Will I look smart or dumb? Will I be accepted or rejected? Will I feel like a winner or a loser? . . .

There’s another mindset in which these traits are not simply a hand you’re dealt and have to live with, always trying to convince yourself and others that you have a royal flush when you’re secretly worried it’s a pair of tens. In this mindset, the hand you’re dealt is just the starting point for development. This growth mindset is based on the belief that your basic qualities are things you can cultivate through your efforts. Although people may differ in every which way — in their initial talents and aptitudes, interests, or temperaments — everyone can change and grow through application and experience.


Do people with this mindset believe that anyone can be anything, that anyone with proper motivation or education can become Einstein or Beethoven? No, but they believe that a person’s true potential is unknown (and unknowable); that it’s impossible to foresee what can be accomplished with years of passion, toil, and training.


At the heart of what makes the “growth mindset” so winsome, Dweck found, is that it creates a passion for learning rather than a hunger for approval. Its hallmark is the conviction that human qualities like intelligence and creativity, and even relational capacities like love and friendship, can be cultivated through effort and deliberate practice. Not only are people with this mindset not discouraged by failure, but they don’t actually see themselves as failing in those situations — they see themselves as learning. Dweck writes:


Why waste time proving over and over how great you are, when you could be getting better? Why hide deficiencies instead of overcoming them? Why look for friends or partners who will just shore up your self-esteem instead of ones who will also challenge you to grow? And why seek out the tried and true, instead of experiences that will stretch you? The passion for stretching yourself and sticking to it, even (or especially) when it’s not going well, is the hallmark of the growth mindset. This is the mindset that allows people to thrive during some of the most challenging times in their lives.


This idea, of course, isn’t new — if anything, it’s the fodder of self-help books and vacant “You can do anything!” platitudes. What makes Dweck’s work different, however, is that it is rooted in rigorous research on how the mind — especially the developing mind — works, identifying not only the core drivers of those mindsets but also how they can be reprogrammed.


Dweck and her team found that people with the fixed mindset see risk and effort as potential giveaways of their inadequacies, revealing that they come up short in some way. But the relationship between mindset and effort is a two-way street:


It’s not just that some people happen to recognize the value of challenging themselves and the importance of effort. Our research has shown that this comes directly from the growth mindset. When we teach people the growth mindset, with its focus on development, these ideas about challenge and effort follow. . . .


As you begin to understand the fixed and growth mindsets, you will see exactly how one thing leads to another—how a belief that your qualities are carved in stone leads to a host of thoughts and actions, and how a belief that your qualities can be cultivated leads to a host of different thoughts and actions, taking you down an entirely different road.

[…]


The mindsets change what people strive for and what they see as success. . . they change the definition, significance, and impact of failure. . . they change the deepest meaning of effort.

Dweck cites a poll of 143 creativity researchers, who concurred that the number-one trait underpinning creative achievement is precisely the kind of resilience and fail-forward perseverance attributed to the growth mindset. She writes:


When you enter a mindset, you enter a new world. In one world — the world of fixed traits — success is about proving you’re smart or talented. Validating yourself. In the other — the world of changing qualities — it’s about stretching yourself to learn something new. Developing yourself.

In one world, failure is about having a setback. Getting a bad grade. Losing a tournament. Getting fired. Getting rejected. It means you’re not smart or talented. In the other world, failure is about not growing. Not reaching for the things you value. It means you’re not fulfilling your potential.


In one world, effort is a bad thing. It, like failure, means you’re not smart or talented. If you were, you wouldn’t need effort. In the other world, effort is what makes you smart or talented.

But her most remarkable research, which has informed present theories of why presence is more important than praise in teaching children to cultivate a healthy relationship with achievement, explores how these mindsets are born — they form, it turns out, very early in life.


In one seminal study, Dweck and her colleagues offered four-year-olds a choice: They could either redo an easy jigsaw puzzle, or try a harder one. Even these young children conformed to the characteristics of one of the two mindsets — those with “fixed” mentality stayed on the safe side, choosing the easier puzzles that would affirm their existing ability, articulating to the researchers their belief that smart kids don’t make mistakes; those with the “growth” mindset thought it an odd choice to begin with, perplexed why anyone would want to do the same puzzle over and over if they aren’t learning anything new.


In other words, the fixed-mindset kids wanted to make sure they succeeded in order to seem smart, whereas the growth-mindset ones wanted to stretch themselves, for their definition of success was about becoming smarter.


Dweck quotes one seventh-grade girl, who captured the difference beautifully:

I think intelligence is something you have to work for … it isn’t just given to you.… Most kids, if they’re not sure of an answer, will not raise their hand to answer the question. But what I usually do is raise my hand, because if I’m wrong, then my mistake will be corrected. Or I will raise my hand and say, ‘How would this be solved?’ or ‘I don’t get this. Can you help me?’ Just by doing that I’m increasing my intelligence.


The ability praise pushed students right into the fixed mindset, and they showed all the signs of it, too: When we gave them a choice, they rejected a challenging new task that they could learn from. They didn’t want to do anything that could expose their flaws and call into question their talent.

[…]


In contrast, when students were praised for effort, 90 percent of them wanted the challenging new task that they could learn from.


If success had meant they were intelligent, then less-than-success meant they were deficient.

But for the effort-praised kids, the difficulty was simply an indication that they had to put in more effort, not a sign of failure or a reflection of their poor intellect.


Perhaps most importantly, the two mindsets also impacted the kids’ level of enjoyment — everyone enjoyed the first round of easier questions, which most kids got right, but as soon as the questions got more challenging, the ability-praised kids no longer had any fun, while the effort-praised ones not only still enjoyed the problems but even said that the more challenging, the more fun. The latter also had significant improvements in their performance as the problems got harder, while the former kept getting worse and worse, as if discouraged by their own success-or-failure mindset.


It gets better — or worse, depending on how we look at it: The most unsettling finding came after the IQ questions were completed, when the researchers asked the kids to write private letters to their peers relaying the experience, including a space for reporting their scores on the problems.

To Dweck’s devastation, the most toxic byproduct of the fixed mindset turned out to be dishonesty: Forty percent of the ability-praised kids lied about their scores, inflating them to look more successful.


She laments:

In the fixed mindset, imperfections are shameful — especially if you’re talented — so they lied them away. What’s so alarming is that we took ordinary children and made them into liars, simply by telling them they were smart.


This illustrates the key difference between the two mindsets — for those with a growth one, “personal success is when you work your hardest to become your best,” whereas for those with a fixed one, “success is about establishing their superiority, pure and simple. Being that somebody who is worthier than the nobodies.” For the latter, setbacks are a sentence and a label. For the former, they’re motivating, informative input — a wakeup call.


What it all comes down to is that a mindset is an interpretative process that tells us what is going on around us.


In the fixed mindset, that process is scored by an internal monologue of constant judging and evaluation, using every piece of information as evidence either for or against such assessments as whether you’re a good person, whether your partner is selfish, or whether you are better than the person next to you.


In a growth mindset, on the other hand, the internal monologue is not one of judgment but one of voracious appetite for learning, constantly seeking out the kind of input that you can metabolize into learning and constructive action.


What type of mindset do you most often display? Fixed or Growth?


As always we love to hear feedback so let us know what you think.

Best

RM

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