Developing a Growth Mindset: Why It Matters

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Growth is good, right? After all, nobody launches a financial advising practice or any other type of business unless they’re expecting it to grow. In business, as in horticulture, when we plant something and focus the proper care on it, we expect growth.

When you take a closer look, however, much depends on how you define the term “growth.” Are you talking about AUM? Active clients? Profitability? Team member advancement? While all of these are valuable areas for improvement in any practice, a more holistic approach to growth will embrace the importance of an understanding that embraces all these factors – but goes beyond them.

Psychologist Carol Dweck is the author of the bestselling book, Mindset: The New Psychology of Success. Dweck conceives of a continuum between what she calls a “fixed mindset” and a “growth mindset” that correlates directly with the ability of an individual to persevere until achieving success.

Those with a fixed mindset tend to view an area of endeavor in terms of limitations rather than opportunities. They avoid challenges as a strategy for not experiencing failure. They often feel threatened by the successes of others and may not respond well to criticism or suggestions for improvement, even when offered in good faith. They understand their abilities as static, and therefore believe, “Either I’m good at this, or I’m not; and if I’m not, there’s no point in trying to improve.” Those with a growth mindset, on the other hand, embrace challenges; if they fail, they interpret it as an opportunity to learn and improve. This attitude positions them to persist in the face of obstacles, embrace critique, and celebrate and learn from the successes of others. They see their abilities as dynamic, capable of expansion and ongoing improvement.