Analysis: An excessive focus on praising ‘innate’ talent in companies, organisations and society as a whole is both flawed and counterproductive. Winners are made, not born and talent is only cultivated through passion and hard work.

I’m reading a book at the moment called “Bounce: How Champions are Made”. Not exactly autobiographical, but I’ve got a few years in the tank left to work with. The book’s author, Matthew Syed, focuses mainly on sporting excellence and how it is achieved, but has many transferable stories for all walks of life. The basic gist of his message is that talent is overrated, and hard work and persistence are more crucial. Furthermore, societies or organisations that focus solely on praising talent rather than work ethic and persistence can have some very unfavourable outcomes. Syed paints a picture of these problems in both a sporting and general life context.

In 1998 a lady called Carol Dweck took four hundred eleven-year-olds and gave them a series of simple puzzles. Afterwards each of the students was given his or her score, plus something else: Six words of praise.

Half of the students were praised for intelligence: “You must be smart at this!” The other half were praised for effort: “You must have really worked hard!”. The goal was to see how these alternate phrases could make a measurable impact on persistence and performance in future tasks.

After the first test, the students were given a choice of whether to take a hard or an easy 2nd test. Two-thirds of the students praised for intelli gence chose the easy task: the inference being that they did not want to lose their ’smart’ label by potentially failing at the harder test. Amazingly (and this test was repeated with all sorts different sample groups with similar results) 90% of the effort-praised group chose the harder second test: the inference here being that they wanted to prove just how hard-working they were.

Next the students were given a test so tough that none of them succeeded. Once again, there was a dramatic difference between the ways they responded to failure. Those praised for intelligence interpreted their failures as proof that they were no good at puzzles at all. The group praised for effort persevered on the test far longer, enjoyed it far more, and did not suffer any loss in confidence.

Finally the experiment came full circle, giving the students a chance to do a test of equal difficulty to the very first test. Strikingly, the group praised for intelligence showed a 20% decline in performance compared with their scores the first time around, even though it was no harder. The effort praised group, on the other hand, increased their score by 30%.

Failure had actually spurred them to better performance. And as Syed points out: “All of these differences turned on the difference in six simple words spoken after the very first test.”

In Dweck and Syed’s views, “mindset frames the running account that’s taking place in a person’s head”. It guides the whole interpretation process, for better or for worse.

One of the final outcomes of Dweck’s praise experiments is perhaps the most striking – and disturbing. At the end of the tests she told the students that she would be conducting the the same study at another school and that the children there might like to hear from students who had already taken the test. She gave the students a sheet on which they could record their thoughts along with space where they could record how many problems they had got right.

When looking at the children who were praised for effort, almost all of them told the truth about their own performance. Only one child in the group had doctored his score. But in the group praised for intelligence, an amazing 40% had lied about their scores. Doing well was so important to them that they felt compelled to distort their performance in order to impress an unknown peer group.

Syed, via Dreck, takes this theme into looking at corporate cultures. In 2001 three senior executives at the prestigious management consultancy, McKinsey, published a book called “The War for Talent”. The key tenet reflected a deeply held McKinsey philosophy: that talent is what ultimately determines success and failure in the corporate world; that pure reasoning ability matters far more than experience based “domain specific” knowledge.

“Don’t be afraid to promote stars without specifically relevant experience, seemingly over their heads”, the book comments. On this strict basis I would advise anyone requiring brain surgery to avoid any McKinsey advised hospitals. Similarly if there is a fire in my house I’d happily take the 20 year veteran firefighter over the talented fresh faced Oxford graduate with a Phd in thermodynamics, ‘talented’ as he might be.

To take a real world example, Alex Ferguson’s management of Manchester United football club over the past twenty years would be a clear testament to the right collective work ethic as opposed to heaping praise on star individuals. Many a self-styled star with the wrong mindset has been passed on by Sir Alex, and given the trophy cabinet he has amassed his approach clearly has some merit.

Although the McKinsey “War for Talent” approach provoked debate within corporate America, one company took the concept further than most. Malcolm Gladwell wrote in the New Yorker magazine: “Enron was a company where McKinsey conducted twenty separate projects, where McKinsey’s billings topped $10million a year, where a McKinsey director regularly attended board meetings, and where the CEO himself was a former McKinsey partner…Enron was the ultimate ‘talent’ company.”

Carol Dweck (she of the student’s tests) also comments:

“Enron recruited big talent, mostly people with fancy degrees, which is not in itself bad. It paid them big money, which is not that terrible. But by putting complete faith in talent, Enron did a fatal thing: it created a culture that worshipped talent, thereby forcing its employees to look and act extraordinarily talented. Basically it forced them into a fixed mindset. And we know a lot about that. We know that people with the fixed mindset do not admit and correct their deficiencies.”

Remembering that 40% of the students praised for intelligence actually lied about their score on the test, in the Enron case the ‘fixed mindset’ had made the public admission of their real result intolerable. Now consider the mark-to-market accounting and SPEs at Enron. How Enron spent weeks leading up to each quarterly earnings announcement figuring out ways to conceal any bad news. Employees became paranoid about admitting to any mistakes, fearing that they would be written off as untalented and fired from the company. The fixed mindset that the culture had created came to permeate and define the daily existence of the executives and employees.

Gladwell picks up the story: “They weren’t naturally deceptive people…they simply did what people do when they are immersed in an environment that celebrates them solely for their innate ‘talent’. They begin to define themselves by that description and when times get tough and that self-image is threatened, they have difficulty with the consequences. They will not take the remedial course. They will not stand up to investors and the public and admit that they were wrong. They’d sooner lie.”

Far be it from me to accuse the entire investment banking community of acting this way, but the ‘natural talent’ employment path is one pursued by virtually all of the investment banks I can think of. The demise of Lehman would tell a similar story about a senior management who had never been forced out of the fixed mindset; admitting and correcting deficiencies would have been weak and culturally unacceptable. As an organisation this management mindset is certainly not unique.

Consider the countless other bankers who find it strange that the general public would dare to question whether they are worth the bonuses that they are paid. The mindset of the average recipient is fixed and says: “Of course I am, I earned it”. Similarly those who question the fairness of the notion of taxpayers saving many banks from capitulation, find it strange that the response from the banks is again fixed and along the lines of: “Look, we are critical to the functioning of the economy – without us there is no economy.”

As I reflect on reading Syed, Gladwell and Dweck’s thoughts it’s clear that I too think in the talent centric way that is potentially misguided. As a recent second-time father there are lessons here. My internalised goal as a parent is to foster passion and excitement for life in our two children, in whatever fields they chose to follow. In theory that sounds quite simple.

When they are dwindling (who knows) at the bottom of their Maths class, or being picked for the ‘C’ rugby team will this enthusiasm for their hard work ethic and passion shine through as a parent. It will take a strong will given my somewhat fixed mindset, and I can only hope I am strong enough to praise and encourage in the right way. Luckily my wife is already good at this; she did give me Syed’s book for Christmas now that I think of it.

How does your company treat you? Is it growth minded? Are the lessons of failure lost amongst the P45s? Or as a parent, educator or manager, do you praise talent and achievement or effort and passion. Is failure the end or the start of a process?