What Two Psychologists and a Hedge-Fund Manager Can Teach You About Persistence

The 150+ internal innovators I’ve interviewed over recent years all have precisely one thing in common. This thing they share is not any of the traits we typically associate with successful innovators: not creativity, customer insight, or influence; not technical knowledge, team leadership skills, or marketing prowess.

No … the one thing they share is this: persistence. They don’t give up.

While most would-be innovators grow tired battling internal barriers, these people somehow have the precisely opposite reaction. They gain energy from the fight.

I’ve been looking for years to better understand the underlying dynamic of innovators who exhibit persistence time and time again, and I finally came across the thread of an answer, thanks to two psychologists and a hedge-fund manager.

Self-efficacy can drive innovation

Three weeks ago I discovered the work of Albert Bandura, a renowned and influential psychologist who offers a compelling theory to explain why some people persist and others give up. His theory – known as self-efficacy – can help all of us become more effective at driving innovation.

Self-efficacy refers to the confidence in your own ability to succeed. Your sense of self-efficacy plays a major role in how you approach goals and challenges. In other words, people with high self-efficacy (i.e., people who believe they can succeed) are more likely to see a difficult task as something to be conquered rather than avoided.

Before Bandura introduced his theory, psychologists nearly universally accepted that people were products of their environment. He changed the course of psychology by positing that individuals are agents in determining HOW they react to external environments.

Studies into “entrepreneurial intention” find that when someone thinks about taking an entrepreneurial action they go through three considerations:

1. Will this work?

Will my taking a course of action result in the positive outcome I am after?

2. Is this socially acceptable?

Will people admire or make fun of me? Will my efforts be praised or laughed at?

3. Am I capable?

Can I perform the tasks needed to cause the positive outcome I am after?

Bandura has spent most of his career exploring this third question: am I capable?

Some people believe they are victims of their situation and some believe they are agents, able to influence their situation. Unfortunately, most people – and I’m talking here about employees working inside established organizations – view themselves as victims. This is evidenced by the fact that almost 70% of Americans state that they are disengaged at work.

Unlocking potential

As a leader, if you can understand what is stopping your people from feeling like they can make a difference in your organization, not only will your organization be more innovative, generate more growth, and generate more value … you will also help unlock the human creative potential of your people and create for them a more meaningful, engaged life.

Bandura argues that there are four interdependent factors that, when put into play, can help people overcome their sense of victimhood:

1. Self-evaluation

Define a set of goals (Bandura suggests that we should have a long-term goal and a short-term goal), then have the self-awareness to evaluate whether you are achieving those goals.

2. Self-observation

Observe your performance honestly, without ignoring where you are under-performing.

3. Self-reaction

Modify your behavior based on your evaluation of whether those behaviors are getting you toward your goals.

4. Self-efficacy

Believe in your capacity to execute the behaviors necessary to produce your goals.

Ray Dalio advocates brutal honesty

This framework is similar to that of Ray Dalio, the founder of Bridgewater, the largest hedge fund in the world. He grew up from humble beginnings to become one of the wealthiest people in the world and one of the most successful investors.

In his book Principles, he lays out his formula for success, essentially saying that whenever you realize you are not achieving your goals, you should go back and either change “people” or “process” to engineer a new system that does achieve your goals.

Doing this, however, requires honest, indeed brutally honest, self-assessments: a willingness to admit your shortcomings so that you can correct them.

Carol Dweck’s mindset theory

Carol Dweck introduced the distinction of a growth mindset versus a fixed mindset. People with fixed mindsets think their capability is fixed, given, that they are unable to increase their capability. People with a growth mindset believe they can learn and improve through application and experience.

A new innovation framework

If we put Bandura’s, Dalio’s and Dweck’s theories together, we end up with a simple and compelling framework for becoming more effective at being innovative:

Choose to take action

First, you choose to take action when you see a problem or opportunity. You see a solution that will work, you see the required actions as socially acceptable, and you see yourself as capable to take those actions.

Evaluate your performance

Then you have the self-awareness to recognize when what you are doing is working or not. This requires being able to evaluate your performance against a goal, observe your behavior, evaluate whether your behavior is working, and have the view that you are capable of changing your behavior.

Adjust accordingly

Finally, you adjust your behavior. You try a new approach, without spending too much time in a state of self-pity or denial. Get up and do something different.

Remember the famous scene from the movie Chariots of Fire in which the main character slips and falls shortly after the gun goes off in a pivotal race? He watches the other runners running ahead of him. Rather than give up, he gets up and starts running as hard as he can and wins the race.

The road to innovation is persistence

If you want to drive innovation, then, take three steps:

  • Define your goal: a long-term goal and the immediate goal you must achieve to get there.
  • Monitor your performance and have the self-awareness to recognize early whether what you are doing is working or not working.
  • Rapidly adjust or pivot whenever you are falling behind to catch up and cross the finish line.
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