Having a growth mindset means believing in our continual ability to improve and perform better. Maggie Williams met Matthew Syed – business writer, Olympic sportsman and keynote speaker at our Autumn Conference – to ask him how that can be applied to pensions.
Can a growth mindset help pension providers develop better propositions?
Organisations need to focus both on strategy and also on their culture and mindset to find ways to improve. It’s about not being afraid to look at aspects such as new communication approaches, or exploring artificial intelligence and machine learning. If you get the culture right, a whole range of downstream effects will follow.
Is that just about the CEO’s attitude at the top of a company, or does it apply to all employees?
I’d like to think it’s about everyone, but it is also dependent on the CEO. When Satya Nadella became CEO of Microsoft, for example, he focused on culture above all else and a growth mindset became a top company value. That sent a signal to everyone that the culture had to change. Everyone had to be able to collaborate more effectively, be less defensive around feedback and learn from mistakes.
You’ve emphasised the importance of being able to learn from mistakes – do you think that financial services has a culture of being able to do that?
There are certainly big differences in the way that different sectors approach learning from their mistakes. Firms in some industries are better at having an open mindset and learning the nature of disruption. The oil and gas industry tends to be quite fixed in its approach, but in contrast the technology sector is extremely good at learning from mistakes – it has to be, because its world changes so quickly.
While sometimes there are system-wide failures that companies have to learn from, there can also be many tiny ways to improve. If a business has the mindset to analyse those tiny aspects, these accumulate over time to deliver marginal gains [small improvements that gradually add up to significant change]. It’s about a combination of continuous evolution and great attention to detail, but also asking how you can change the broader system to make everything more effective.
Can the finance industry use marginal gains to encourage people to save more into pensions or other savings?
If people save less than they rationally know they should, or don’t put as much away as they would do if they knew the relevant facts, then communications can play a big part. Taking a marginal gains approach will improve the impact that communications have on people by delivering the right messages at the right time, so that they have the maximum effect on behaviour. There is a huge amount in social psychology about how to drive messages into people’s minds – good advertising firms do this all the time.
When it comes to where people choose to save, that’s quite complex. It’s almost a branch of forecasting to think about how much you put away and where you put it. In his book Superforecasters, Philip Tetlock differentiates between ‘hedgehogs’, who tend to have a fixed world view and will look for facts that back up that view, and ‘foxes’ who have many different sources of information and will change their approach over time, making them better forecasters. With a growth mindset, people don’t get stuck on particular ideologies or world views – perhaps becoming more of a fox can help everyone.