This is the Mentality You Need to Be as Rich as Billionaire Richard Branson
By Tai Lopez
April 20, 2015
Why did Richard Branson, Leonardo DaVinci and Mozart achieve 10,000 times more than us mere mortals?
Editor’s note: This post is sponsored by Tai Lopez
In “Managing Oneself,” Peter Drucker describes what it takes to become successful in business in the 21st century.
Peter Drucker, if you’ve never heard of him, is one of the most important business thinkers of the last century. The foundation of what you learn in MBA programs today originated from his books.
Drucker says we have to learn how to manage ourselves, and that doesn’t come naturally since it’s a new challenge of the modern world. Five hundred years ago, you didn’t need to learn self-management because you didn’t have many choices — if you were born a peasant, you stayed a peasant. Everything you needed to know was handed to you, and you had little choice in the matter.
But now in the 21st century, you have all the opportunities in the world at your fingertips — but all that potential hinges on your ability to manage yourself. Drucker says you can start by figuring out your true strengths and weaknesses:
“Most people think they know what they are good at. They are usually wrong. More often people know what they are NOT good at – and even then more people are wrong than right. And yet, a person can perform only from strength. One cannot build performance on weakness, let alone something one cannot do at all.”
Let those words sink in.
What he is saying is that your past failures probably weren’t from a lack of discipline or a lack of willpower, but from the fact that you had misidentified what you were truly good at.
We think we know our talents, but we usually don’t. It’s like being one of those weird contestants on “The X Factor” — he thinks they sound good, but you and Simon Cowell both know he sucks. Like Randy Jackson once said, “Dawg, what else are you good at? Maybe you should try dancing, not singing.” I talk more about this in step 48 of “The 67 Steps.” Step 48 is called “Michael Jordan Swagger & American Idol Syndrome.”
The human mind is built to trick us; scientists call it “illusory superiority.” They define it as “a cognitive bias that causes people to overestimate their positive qualities and abilities and to underestimate their negative qualities.”
Studies show that the average man thinks he is 5 IQ points smarter than he really is (strangely, women tend to underestimate their IQ by 5 points).
But of course, not everyone can be above average.
One of the companies I invested in did an experiment on a social network asking people to rate how good-looking they are. Then we let other users also vote on the same person’s photos. The difference was insane — lots of people rated themselves as hot even when nobody else did. In fact, the ones who rated themselves a “Perfect Ten” were usually the least attractive and most delusional of them all.
It’s hard to know yourself. Even Socrates said that the reason he didn’t spend time talking about religion or the gods was that he had such a hard time “knowing himself.” He was spending so much time on self-discovery that he didn’t have time to speculate about what happens after death.
Most of us are delusional about something, and it’s usually about our own strengths and weaknesses. I think it stems from fear, fear of rejection or fear of people not liking us if we are honest about our flaws.
Charlie Munger, who Bill Gates and Warren Buffet call the smartest man alive, says that there are 25 reasons we make mistakes in judgment — reasons like social bias, association bias, chemical bias and senescence bias. I go much deeper into the 25 cognitive biases in step 36 of “The 67 Steps”. Step 25 is called “The Sucker In The Room & The Lollapalooza Effect”.
But the bias most relevant to managing ourselves is called “simple psychological denial,” according to Munger:
“This first really hit me between the eyes when a friend of our family had a super-athlete, super-student son who flew off a carrier (during a war) in the north Atlantic and never came back, and his mother, who was a very sane woman, just never believed that he was dead. And, of course, if you turn on the television, you’ll find the mothers of the most obvious criminals that man could ever diagnose, and they all think their sons are innocent. That’s simple psychological denial. The reality is too painful to bear, so you just distort it until it’s bearable. We all do that to some extent, and it’s a common psychological misjudgment that causes terrible problems.”
It’s that fear that gets us. That’s why I’m so big on courage. When you have courage, everything falls into place, but when you operate out of fear, life is a never-ending cascade of psychological biases. This principle is taught in depth in step 56 of “The 67 Steps”. Step 56 is called “Floating Across The Pacific On A Raft And Why Sitting Bull Liked To Be Shot At.”
So what’s the solution?
Peter Drucker says you must use “feedback analysis” to break the delusion. Feedback analysis is just a fancy way of saying that, instead of just using our gut feeling, we should instead test ourselves based on ACTUAL past successes and failures.
Drucker says to try this exercise. Every time you have something you are starting — maybe it’s a diet, or a new business, or some New Year’s resolution — write down what you expect will be the result. Then nine months later, come back and analyze what ACTUALLY happened. If you predicted you would lose 10 pounds or grow your business by 30% but you didn’t actually pull it off, you can use that information to more accurately identify your strengths and weaknesses.
That’s all feedback analysis really is.
Sounds simple, but what’s harder is that most of us use excuses for why we failed instead of honestly saying, “This failure shows me that I have a weakness in that area.”
For example, I read once about how most humans react to other people getting rich. The common three reactions were: “They must have stolen it,” “They probably inherited it” and “They just got lucky.”
Very few people are willing to honestly say, “They must have worked harder and more efficiently than me.”
You and I have to avoid that excuse mentality. I go into depth about this in step 14 of “The 67 Steps”. I call step 14 “The Shaolin Monk & Touching An Electric Fence.”
I teach this feedback analysis by telling people to “read the obvious signs.” If you are broke, the obvious signs are that you need to learn more about managing and making money. If you are fat, you need to admit that you probably suck at controlling what you eat. If you are lonely, you have to read the obvious signs that your people skills need work.
The first step in change is finding out why things are like they are, even if the answer is painful.
The tendency is to skip past the stage of diagnosing the weaknesses and their cause and just try to treat the symptoms of our problems.
In your own life as you try “feedback analysis,” first look clearly at your past successes and failures, and then ask yourself “Why?” three times.
So for example, if you once dreamed of starting a business but never quite pulled it off, the first step is to say, “I am probably not good at starting new businesses.” If you were good at it, you probably would have actually started one already.
But then go further with the feedback analysis — ask yourself, “Why didn’t I start a business?”
Let’s say the answer was, “I never could get the start up cash to launch.”
Then ask a second time, “Why couldn’t I get the cash?” Maybe the answer is, “Everyone I talked to didn’t think I could do it.”
Then ask a third time “Why didn’t anyone think I could start the company?” Maybe the answer is that they could see you didn’t have enough experience to be able to handle a new business.
So if you are brutally honest, maybe the problem is NOT that you aren’t good at starting new companies — maybe the issue is that you tend to jump into something too soon before you’ve put in the time to build the necessary skills first.
Drucker then says after you have done this feedback analysis, the next steps are:
1. Concentrate your time and energy on your strengths: Put yourself only in situations that bring out your strengths. If you are good at starting things but never finish them, then partner up with someone who likes to finish things.
2. Improve those strengths: Build skills and increase your knowledge in your areas of strength. If you are a naturally good networker, then become the world’s best networker. Read books on networking, sales, marketing, and psychometrics, and find a mentor who is a master networker. Commit to seeing your strengths as a sculpture that you continually refine. Like Munger says:
“Spend each day trying to be a little wiser than you were when you woke up. Discharge your duties faithfully and well. Step by step you get ahead, but not necessarily in fast spurts. But you build discipline by preparing for fast spurts. Slug it out one inch at a time, day by day. At the end of the day – if you live long enough – most people get what they deserve.”
3. Overcome your disabling ignorance: Don’t take pride in not knowing things. I hear people saying weird things like, “I’m not good at math.” Well, guess what? To be good at just about anything, you have to know basic math. Don’t make some sweeping justification of ignorance. Even though you need to specialize in your strengths you still need to have basic skills in a wide variety of areas. I explain this more in step 30 of “The 67 Steps”. I call step 30 “Peter Drucker, The Cluttered Attic And The Invention Of Rules.”
4. Fix bad habits: Sometimes what you think is a weakness is just a bad habit. Bad habits can be fixed. Then you will see that seeming weaknesses were actually strengths all along. For example, maybe you think you are bad at following through with goals, but maybe you just have a bad habit of watching too much TV. Throw the TV in the trash and suddenly you will discover how productive you actually can be. I talk about this in depth in Step 47 of “The 67 Steps”. I call it The 5% Tweak, Nothing Janky, & When Good Enough is Perfect.
5. Overlook true weakness: Those areas that are truly weaknesses (that aren’t just ignorance or bad habits) should not be focused on. It’s a way better use of your time to just increase mastery of your strengths. I remember Charlie Munger saying that the last time he really changed his personality was when he was 5 years old and learned not to throw himself on the ground in a temper tantrum. He is almost 90 now and says nothing else has really changed about himself. He says that the best thing to focus on is improving your good traits, so much so that the world forgets about your little flaws, weaknesses and idiosyncrasies.
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