The “Poor Mindset” (blue brain) is associated with consumerism, illustrated by shopping bags with luxury brand logos.
The “Rich Mindset” (green brain) focuses on growth, depicted by gears and a plant to symbolize development and investing. The importance of mindset
A mindset refers to a person’s world view and core assumptions; somewhat interchangeable with ‘mentality.’ Given our mindset is the lens we see and evaluate the outside world, it is immensely rewarding to invest time into working towards more positive, productive mindsets.
Priming your mind
Priming is a technique whereby exposure to one stimulus influences a response to a subsequent stimulus.
In a simple example, if you say the word “yellow” to someone and ask them to respond, they are much more likely to think of a word related to yellow like “banana” than an unrelated word like “computer.” You have primed the the response via the introduction of yellow — and the respondent is much more likely to pick something they associate with yellow as a result.
Our mindsets prime our mental state. The mindset you’re in will influence the information you perceive, the feelings you take away and your overall perception and memory of an experience.
Design is the rendering of intent – it requires thinking about the future state of a service or product and putting forth activities to make that outcome real. And it’s fraught with failure. As most designers know, the more creative and forward-thinking the vision, the greater the chances of failing along the way. Thus, the really great designers not only accept, but celebrate failure as an essential part of the design process.
However, some people have a very difficult time dealing with failure. According to Stanford psychologist Carol Dweck, these individuals operate from a fixed mindset. They view failure as a referendum on their self-worth and innate abilities – proof that they’re not good enough. This cripples creativity.
There’s another group of people, which according to Dweck, tend to view failure as an opportunity for learning and growth. These individuals operate from a growth mindset. Unlike individuals with a fixed mindset, they don’t worry about getting the wrong answer because they know that it’s not a reflection of who they are, but of what they don’t know yet. In order to unlock breakthrough ideas and creativity, companies need more people with a growth mindset, people who aren’t afraid of failure, and can see challenging situations as opportunities for learning and growth.
At ZURB, we work hard to cultivate a growth-mindset culture, to encourage our team members to take risks, fail, learn and repeat. Our 20+ years of experience has shown us that one of the fastest and most effective ways to cultivate a growth mindset is by encouraging team members to deliberately seek out feedback. Feedback challenges our ideas, exposes our blind spots, and provides a springboard for growth and improvement.
Keep reading to learn how we leverage continuous, structured feedback to cultivate a growth mindset at ZURB.
Difference Between a Fixed and Growth Mindset
In her famous book, “Mindset”, Stanford psychologist Carol Dweck explains how the view (or mindset) we adopt for ourselves profoundly affects the way we lead our lives and respond to failure.
Dweck distinguishes between two different mindsets: fixed and growth. She argues that these mindsets drive a great deal of our behavior, our relationship with success and failure in both professional and personal contexts, and ultimately our capacity for happiness.
- Fixed Mindset: Individuals who believe their talents are innate gifts and can’t be changed in any meaningful way. They believe that their ability to grow and improve is limited and finite.
- Growth Mindset: Individuals who believe their talents can be developed (through hard work, good strategies, and input from others). They believe that their ability to achieve growth and improvement is unlimited and infinite.
When it comes to success, those with a fixed mindset view success as an affirmation of their inherent intelligence, an assessment of how their given taits measure up against an equally fixed standard. Failure is viewed as a lack of necessary basic abilities. As a result, those with a “fixed mindset” strive for success and avoid failure at all costs. They strive to be right believing it will make them competent. However, striving to impress others causes people to do what they know rather than explore what they don’t know.
Individuals with a growth mindset tend to achieve more than those with a more fixed mindset because they worry less about looking smart and they put more energy into learning. They thrive on challenge and see failure as an opportunity for learning and stretching existing abilities, rather than evidence of unintelligence.
Why Having a Growth Mindset is Critical to Design
Given the speed at which technology is forcing change, it’s now impossible to be an effective designer without having a growth mindset. That’s because individuals with a growth mindset are more likely to be creative, humble and open minded – all necessary ingredients for creativity and innovation.
Creativity & Failure
Design requires thinking about the future state of a service or product – it requires innovation. Creativity and failure are integral to innovation. Individuals with a growth mindset believe that creativity is not a genetically preset trait, but rather something that can be cultivated through practice and collaboration with other people. This belief drives them to constantly experiment with new approaches and ways of thinking, rather than getting fixated on the ‘right answer’.
Moreover, to create truly innovative products, designers must be willing to make mistakes and fail over and over again. They must also be able to acknowledge their mistakes and work through them, often in a public way, in order to extract maximum learnings. This is no small feat. Failure can be painfully revealing and requires a level of vulnerability that is difficult for most people to bear. This is only possible with a growth mindset. For individuals with a growth mindset failure isn’t a permanent state or an indicator that they lack basic abilities. They view failure as an opportunity to develop and iterate on an idea further.
It is only by viewing failure as an opportunity – rather than a permanent set back – that designers can achieve the level of excellence necessary to create game-changing products. This view of failure significantly alleviates performance anxiety, imposter syndrome, and stage fright, all of which are common in design, and detrimental to creativity.
In contrast, individuals with a fixed mindset view failure as evidence of their lack of abilities – which are innate. This creates a desire to avoid failure at all costs. For many individuals, this creates a need to ‘fit in’ and appear as though they have all the right answers, which severely limits their ability to learn, grow, and generate new insights and solutions. Thus, when faced with a new challenge and the possibility of failure, a fixed mindset person will just get discouraged. A large gap, lack of curiosity, or discipline will prevent that person from trying to learn.
Humility & Open Mindedness
In order for individuals to keep imagining and creating new possibilities, they must approach design with a beginner’s mind – believing that there’s a possibility that you can learn something. This is critical to a growth mindset. The more open minded one is, the more they’re able to ‘see the big picture’ – the broader perspective of a problem or solution. However, seeing the ‘bigger’ picture also means accepting (and embracing!), often publicly, how much you don’t know. It also means being humble enough to seek out feedback and answers from other people. This is no small feat.
Indeed, individuals with a fixed mindset tend to interpret a ‘lack of knowledge’ as a lack of innate ability, and avoid sharing it to other people. Worst of all, the fear of exposing their ignorance will prevent them from seeking out answers and feedback from individuals who know more, thus limiting their ability to generate new knowledge and ideas.
Individuals with a growth mindset, on the other hand, will embrace the uncertainty as an opportunity to learn and improve. Moreover, they’ll seek out relationships with people who will challenge and encourage growth.
Feedback is Key to a Growth Mindset
At ZURB, we rely on growth mindset-minded individuals to drive our creativity forward. And one of the quickest and most effective ways we cultivate a growth mindset among our team members is through feedback and praise.
We make a clear distinction between feedback and praise. We encourage our team members to actively collect and give honest, and sometimes critical feedback because we believe that it’s instrumental to growth. However, we also believe in praising individuals for their work and, their process, rather than simply applauding their outcomes. It’s the marriage of these two concepts that cultivates a supportive and growth-minded culture.
Feedback
We believe that asking for feedback is the fastest, most effective way to practice having a growth mindset, and we encourage our team members to do regularly.
Asking for feedback is very different from unsolicited feedback. When the latter happens our defenses are automatically raised, our amygdala responds and we have a fight or flight moment. We tend to debate, rationalize, react, and oftentimes, reject the feedback. However, when we ask for feedback we’re automatically in a better position to listen to the feedback, ask clarifying questions, and then accept the remarks.
Encouraging feedback promotes 4 things that are essential for a growth mindset:
- Creation: In order to receive feedback, one must first create something and put it out into the world. This is critical to a growth mindset because one cannot learn without creating.
- Humility: By asking for feedback an individual is acknowledging that what they have created isn’t perfect, and that’s ok.
- Collaboration: Gathering feedback requires engaging with people who think differently than you are and who challenge you. Moreover, when both people have a shared interest in an outcome, we achieve synergy which can propel ideas even further. This is the most effective way to keep growing.
- Learning: Gathering feedback is the fastest way to be held accountable and to keep learning and improving.
How We Cultivate a Growth Mindset: The Jump
How do you get good at feedback? Listening to feedback can be difficult to accept, and learning to repeatedly seek it out can be even harder. We realized at ZURB how important feedback is for cultivating a growth mindset, so we developed a feedback collection process called a Jump. A Jump helps us create discipline in soliciting and giving feedback, as well at the repetition necessary for learning to happening in a structured way.
A Jump is a way for individuals to take control of their own learning by asking for consistent, structured feedback. There are four actions in a Jump: Create, Show, React and Shape. In each action, there are specific tasks that push the Jump forward.
To break it down:
Show:
Show your work to people that give you honest and open feedback. This is a great way to practice explaining the goals, objectives, target audience, and rationale for your deliverable. This is an opportunity to prime your audience and get them excited about participating in the feedback loop.
React:
Now you can ask for feedback. Remember that feedback is an opportunity to learn and improve. It shouldn’t be taken personally. This can be hard, but you can train yourself to separate these feelings. Use these steps for slowing down, listening and getting the most from people willing to give feedback:
- Stop your first reaction
- Remember the benefit of getting feedback
- Listen for understanding
- Say thank you
- Ask questions to deconstruct the feedback
- Rate your response to the feedback
Shape:
This is your opportunity to synthesize the feedback you received. Don’t just pick the top two types of feedback, try to incorporate all your feedback into a summary, and then use it to improve your work. This action will completely set you apart from your peers and defines the best workers. A shaper doesn’t just listen to the feedback, they create new possibilities from other people’s input.
And one more note on Praise…
One of the exercises we do at ZURB is force designers to do sketches in a three hour timebox. We state a design problem and ask designers to sketch 45 different ‘opportunities”. The goal of the activity isn’t to get perfect sketches or find all the right answers. The exercise is meant to show a designer how to create lots of solutions, develop a process to work past the obvious answers and learn how to hold themselves accountable to the creation of ideas.
When a designer finishes the exercise, we praise them for their effort- regardless of whether they got it right. This is called ‘process praise’ and it’s an important component to feedback. Just as much as feedback is necessary for continued improvement, process praise is a way to encourage team members and not get stuck on ideas. This is in line with multiple studies which found that students who received praise focused on their efforts and strategies enter a growth mindset, work harder, become more resilient, and perform better than students who were praised for their talents and abilities.
Conclusion
Since failure is such an inevitable and essential part of design, it’s important to be surrounded by people who can not only accept, but embrace failure. And one way to do this is to cultivate a growth mindset, both among team members as well as the organization as a whole.
At ZURB, we realize that one of the best ways to cultivate a growth mindset is to encourage team members to ask for feedback. Using our JUMP feedback model, team members can systematically integrate feedback into their day to day activities. Moreover, we make sure to praise team members on their efforts and strategy, regardless of the results. Together, feedback and praise help promote a more growth-minded-driven culture at ZURB. We’d love to hear your thoughts! How do you promote a growth-mindset in your company?
Gambling is defined by taking chances with money driven by luck, offering little to no control over the outcome.
Investing focuses on long-term wealth building, relying on research and analysis rather than luck.
High-risk activities like futures and options (F&O) or cryptocurrencies can sometimes act as a bridge between investing and gambling, leading to massive losses if misunderstood.
Investing Vs Gambling: Are They the Same?
Have you ever wondered if putting money into the stock market is just another form of gambling? Many people struggle with this thought, especially when they hear stories of huge losses or quick wins in the market. But here’s the truth: gambling is a game of pure luck, while investing is a calculated process grounded in research and strategy. Unfortunately, this misunderstanding often holds people back from making informed decisions about their finances.
If you’ve been hesitant to invest because you fear losing money or believe it’s just a gamble, this post will help clear the air and show you why investing can be your ticket to long-term financial growth.
The first and foremost question that we all have is: are they the same?
What is Gambling?
Gambling is all about taking chances with money in the hope of winning big. It’s driven purely by luck, with little to no control over the outcome. Whether it’s placing a bet on a cricket match, spinning the roulette wheel at a casino, or buying a lottery ticket, gambling thrives on uncertainty.
Unlike investing, where decisions are based on thorough research and analysis, gambling doesn’t require much strategy, it’s a matter of luck, plain and simple.
A common question many people ask is, Is buying stocks gambling? This confusion arises because some investments, like speculative trades, might appear similar to gambling.
For example, examples of speculative investments, such as options trading or penny stocks, often involve higher risks and shorter time horizons, which might feel like gambling to the uninformed.
However, the key difference is that speculative investing still allows room for research and educated decisions, unlike pure gambling, where the odds are stacked against the player.
Ultimately, gambling doesn’t offer a consistent or reliable path to wealth. Instead, it often leads to impulsive decisions and financial stress, making it a risky approach for those looking to grow their money.
What is Investing?
Investing is a disciplined and methodical approach to building wealth. Unlike gambling, which relies on chance, investing is all about making informed decisions backed by research, planning, and a clear vision for the future.
It’s a process that involves understanding your financial goals, evaluating risks, and allocating money to assets like stocks, bonds, or mutual funds to grow wealth over time.
One of the key elements of investing is focusing on measurable outcomes, which helps you track how your money is growing.
For example, a good investor may follow, ensuring they secure gains at the right time while minimizing unnecessary risks. This is especially important for those managing high-risk high-return investments, where careful analysis and timing can make all the difference.
Successful investors often develop habits that guide their decisions. The habits of successful investors include staying patient during market fluctuations, diversifying their portfolio, and thinking long-term instead of chasing quick gains.
While the stock market may seem unpredictable at times, a smart investor uses tools and strategies to make decisions based on data rather than emotion.
This is what sets investing apart from gambling, it’s a structured and thoughtful process aimed at achieving financial stability and growth.
Knowing How Much Your Investments Make Understand how much return are you getting from your investment When you invest your money, you want to know how well it’s growing over time. That’s where the average rate of return comes in. It’s a simple way to measure how much profit your investments are making on average over a specific period.
For instance, whether you’re tracking your portfolio performance or comparing investment options, understanding the rate of gives you a clear picture of how well your money is working for you. Think of it as a snapshot of your financial growth, helping you make better decisions about where to invest next.
Simple Ways to Calculate Returns
Understanding how to calculate the rate of return on investment is essential for evaluating your portfolio. Let’s break it down step by step so it’s easy to follow. These methods will help you assess your returns and make informed financial decisions.
Basic Formula for Rate of Return
The simplest way to calculate returns is using the basic formula:
Rate of Return (%) = [(Ending Value – Starting Value) ÷ Starting Value] × 100
For example, if you invested ₹10,000 in stocks and it grew to ₹12,000, your return would be:
[(₹12,000 – ₹10,000) ÷ ₹10,000] × 100 = 20%
This gives you the percentage gain or loss from your investment. It’s a straightforward way to assess short-term performance.
Understanding the Annual Rate of Return
When investments span multiple years, the annual rate of return gives a more accurate picture of yearly growth. It’s calculated using this formula:
Annual Rate of Return = [(Ending Value ÷ Starting Value) ^ (1 ÷ Number of Years)] – 1
For example:
- Starting Value: ₹10,000
- Ending Value: ₹15,000 after 3 years
- Annual Rate of Return = [(₹15,000 ÷ ₹10,000) ^ (1 ÷ 3)] – 1 ≈ 14.47%
This helps you understand consistent annual growth, which is important for comparing different investment options.
Why the Normal Rate of Return Depends on Market Factors
The normal rate of return depends on various factors like market conditions, risk levels, and economic stability. For instance:
- Stock market returns may average higher during a booming economy.
- Investments in fixed deposits or bonds often yield lower, but stable, returns.
By understanding these dynamics, you can set realistic expectations for your portfolio.
Knowing how much your investments can earn is crucial. In bank fixed deposits, the interest rate, maturity amount, and time period are predefined, eliminating the need to estimate returns.
However, with most other investments, returns must be estimated or calculated. Estimating returns is key to portfolio planning alongside factors like risk profile, time horizon, and financial goals.
Typically, higher risk means higher potential returns. For instance, equities offer significant returns but come with higher risk. In contrast, the debt market carries lower risk but offers comparatively smaller returns.
This risk-return balance is evident even within equities. Large-cap companies present lower risk and moderate returns due to their stability, while small-caps carry higher risk but greater potential for aggressive growth.
Historic returns across asset classes
Analyzing the historical performance of various asset classes in India from 1992 to 2023 provides valuable insights for investors. Below is a summary of the nominal and inflation-adjusted (real) returns for key asset classes during this period:
1. Equities:
Nominal Returns: Equities have demonstrated significant growth, with average nominal returns around 14% per annum.
Real Returns: After adjusting for inflation, the real returns approximate 6% per annum.
2. Gold:
Nominal Returns: Gold has served as a hedge against inflation, offering average nominal returns of about 10% per annum.
Real Returns: The real returns for gold are approximately 2% per annum.
3. Fixed Deposits:
Nominal Returns: Fixed deposits have provided stable returns, averaging around 8% per annum.
Real Returns: After accounting for inflation, the real returns are approximately 1% per annum.
4. Bonds:
Nominal Returns: Bonds have yielded average nominal returns of about 9% per annum.
Real Returns: The real returns for bonds are approximately 2% per annum.
5. Real Estate:
Nominal Returns: Real estate investments have shown average nominal returns around 11% per annum.
Real Returns: The real returns for real estate are approximately 3% per annum.
These figures highlight the varying performance and risk profiles of different asset classes in India over the past three decades.
Equities have offered the highest real returns, reflecting their growth potential and associated volatility. Gold and bonds have provided moderate real returns, serving as effective hedges against inflation.
Fixed deposits and real estate have delivered lower real returns, emphasizing the importance of diversification in investment portfolios.
There are two things that you must understand while assessing the historical returns of an investment:
- It is not necessary that history will repeat itself. This means that just because an investment did well in the past, it is not necessary that it will do well in the future as well. Thus, you must also assess the future prospects of an investment instead of solely relying on past performance.
- Check the metric used for return calculation. Generally, returns are stated either as annualised or as compounded annual growth rate (CAGR).
Calculating returns on asset classes
It’s impossible to predict exact future investment returns due to market variability. However, historical returns and forecasts are helpful proxies, and over the long term, investments generally outpace inflation, helping grow wealth. Online calculators can assist in setting goals and estimating required returns, offering tailored investment options.
Stocks: Returns include absolute gains and dividends. For example, buying a share at ₹60, earning ₹10 in dividends, and selling at ₹80 gives a 50% return: [(₹20 gain + ₹10 dividend) ÷ ₹60] × 100.
Bonds: Add the sale premium and interest income earned, then divide by the purchase cost to calculate the rate of return.
These methods provide a clear framework for evaluating realised returns on investments.
Why This Matters in Real Life
The average rate of return is more than just a financial term, it directly impacts your day-to-day financial decisions.
