From “Mindset: The New Psychology of Success” by Carol S. Dweck, PhD
Enron And The Talent Mindset
In 2001 came the announcement that shocked the corporate world. Enron – the corporate poster child, the company of the future – had gone belly-up. What happened? How did such spectacular promise turn into such a spectacular disaster? Was it incompetence? Was it corruption?
It was mindset. According to Malcolm Gladwell, writing in The New Yorker, American corporations had become obsessed with talent. Indeed, the gurus at McKinsey & Company, the premier management consulting firm in the country, were insisting that corporate success today requires the “talent mind-set.” Just as there are naturals in sports, they maintained, there are naturals in business. Just as sports teams write huge checks to sign outsized talent, so, too, should corporations spare no expense in recruiting talent, for this is the secret weapon, the key to beating the competition.
As Gladwell writes, “This ‘talent mind-set” is the new orthodoxy of American management.” It created the blueprint for the Enron culture – and sowed the seeds of its demise.
Enron recruited big talent, mostly people with fancy degrees, which is not in itself so 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 worshiped talent, thereby forcing its employees to look and act extraordinarily talented. Basically, it forced them into the fixed mindset. And we know a lot about that. We know from our studies that people with the fixed mindset do not admit and correct their deficiencies.