Smart leaders read. They read a lot. Bill Gates reads about 50 books a year. Former PepsiCo CEO Indra Nooyi read 10 textbooks on one holiday. Nike founder Phil Knight “loved to read.” Warren Buffet reads between 500 and 1,000 pages per day. And when someone asked Tesla’s Elon Musk how he learned about rockets, he said, “I read books.”
Reading vastly wouldn’t matter much if our world moved slower. But the pace of change is speeding up, in artificial intelligence, materials research, engineering, biology, climate science, and geopolitics. In short, it’s everywhere.
People can’t cope with limited mental tools. Without inspiration, people can’t think creatively. They can’t come up with original solutions. They don’t have the courage to change direction.
So it’s interesting to see just how leaders struggle. After all, they’re the ones with plenty of help: market intelligence, external board members, managers who ferret out information. Yet, a leader can get locked into a strong identity and be unable to get out.
The Danger of a Strong Identity
In 1929, a crisis hit Wall Street. On Black Thursday, October 24, a record 12,894,650 shares were sold. The stock market plunged the following Tuesday, October 29, with another 16,410,030 shares dumped. Stock tickers at the New York Stock Exchange ran hours behind. The trading volume was too large.
Soon enough, companies were having trouble getting loans from banks. They laid off workers. Workers who lost their jobs bought fewer products. A vicious cycle ensued.
Presiding over the Great Depression was Herbert Hoover. The 31st president of the United States was an ardent conservative. He saw self-determination as the key to recovery. He believed in self-governance. He preferred authority to rest with the locals. He saw individual freedom as the essence of America. Nothing should challenge people’s initiative. And nothing was worse than a drift toward European paternalism and state socialism.
In the next two years, the unemployment rate would climb from 3 percent to 25 percent. Some 15 million people would become jobless. The stock market would drop to about 20 percent of its earlier worth. By 1933, more than 5,000 banks, nearly half of America’s total, failed. But instead of changing direction, Hoover persisted in his beliefs.
Why Loyalists Don’t Care about Policies
Psychologists have found that people vote mainly based on their own identity. People don’t read actual policies.
Imagine a law is put forward that calls for higher taxes to fund elementary schools. Would you think, “I don’t have any children, so I won’t benefit from the law?” If you’re like a typical voter, the answer is no. Instead, this is how most people think: “I believe in education, so I’ll support this.” Or, “I don’t believe in the public school system, so I won’t support this.” Who you are and what you believe matter the most. The actual policies don’t count much.
Research shows something else. The more important someone’s political identity is to how they see themselves, the more likely they are to fall in line with the party’s stance. That’s when people vote for a candidate that they dislike. Even if they disagree, they’ll say, “I am a Democrat. This is how we Democrats vote.”
But researchers from London Business School and Chicago Booth found an exception. They found that party affiliation can have less influence among voters who see politics as unimportant. These are the people who limit their political views to a small part of their identity.
We know these people. They are the swing voters. They shift who they vote for instead of letting political identity take over their entire self-regard. They adjust to the changing circumstances because they have a more fluid identity.
For leaders, having a fluid identity can be vital.
My Mind Is Made Up, Don’t Confuse Me with Facts
Hoover understood the cause of the Great Depression with amazing clarity. As early as 1923, before he was president, Hoover warned that the booming economy of the 1920s would soon end. He was concerned about the New York banks that lent money to investors. He worried about investors who bought stocks “on margin.” And yet, he handled the Depression with the conviction of a religion.
Hoover’s “rugged individualism” made him hate direct aid. It’s immoral to tax people who work hard and to give handouts to people too lazy to work. Every person should manage their own well-being. “We cannot squander ourselves into prosperity,” he repeatedly said.
Meanwhile, despair was stalking city streets as well as the countryside. Shantytowns of the homeless—now called Hoovervilles—spread across the US. Americans everywhere were asking for help. But as the shouts got louder, Hoover listened less and then stopped listening altogether. He sent letters saying he was too busy to receive any delegation. He had police reinforce the White House. Nearby streets were closed to traffic. Barricades were erected. In July 1932, Hoover sent in the army. Fixed bayonets and tear gas drove protesting veterans out of Washington.
Crisis Doesn’t Reveal Character, Identity Does
To be sure, the idea of injecting money into the economy didn’t exist at the time. No one in the government knew how to end the Depression. Quantitative easing by the Federal Reserve was a novel concept.
Still, traditional conservatism had its grip on the president. His aides formed a toxic bubble that excluded all other considerations. Some of his fellow lawmakers felt the Depression was getting worse, not because Hoover wasn’t doing enough. They thought he was doing too much!
All of this was leading to the end of Hoover’s one-term presidency in 1932. He once won the election by a landslide. But by the second time he won in only six states. His loss included his native state of California.
Keep Your Identity Fluid in Business
Hoover could have prevented that disastrous outcome. But he would’ve needed to picture a new identity. An identity explains who we are and why we behave in a certain way. Changing identity is hard. It demands mental flexibility, a mix of metaphors and symbols. An entrepreneur might say, “I’m building the Uber for X.” Or, “It’s like Netflix for Y.”
A textbook case in business is how Fujifilm became a chemical giant. Polaroid, on the other hand, became bankrupted. All because they chose their identities differently.
Fujifilm and Polaroid seemed similar on the surface. Both depended on film sales. But they had different reactions to digital imaging. Fujifilm adopted a broad identity as an “information and imaging” company. They saw digital imaging as part of their main business. Meanwhile, Polaroid chose a narrower identity as an instant photography company. Digital imaging challenged that identity. Polaroid resisted it, which led to its own demise.
Identity thus shapes the overall logic of a business. It guides the deeper expression of everyday activities. It reflects and gives meaning to the concrete and the real. But when it starts to become unsuitable, leaders must avoid getting locked in. Effective leaders never allow their histories and their views of themselves to take them hostage in a new situation.
How To Change Your Own Identity
Here is the first step to reinvention: Build up a wide range of possible selves. Comparing yourself to industry peer groups only leads to a dead end. Copying others’ best practices will at best help you become a fast follower. The most effective plan is to borrow industry logics from other fields and to then mix and match them according to your own needs. You need to reinvent on your own ground.
Having a wide range of possible selves is important on a personal level too. Research has shown that during a career transition, successful managers tap into many role models. They understand the big difference between imitating someone wholesale and borrowing selectively from various people. They prefer to create their own collage.
That’s why reading autobiographies has great benefits. You learn about what a person has been through and how they act in specific situations. They show you how to deal with difficult stages of life. But more importantly, the great personalities we read about become our virtual mentors. They widen our range of thought. Their stories provide ingredients for us to experiment with. Inspiration always comes from daily things. Like chameleons, we can borrow styles and tactics from other successful people, even if we don’t agree with them completely.
Bill Gates doesn’t start a book unless he knows he’s going to finish it. Even when he disagrees with the author, Gates says, “it’s my rule to get to the end.” If he disagrees with a point, he writes his own viewpoint in the margin. Then he goes on to read about 50 more books a year.
Warren Buffet goes further:
“Read 500 pages like this every day. That’s how knowledge works. It builds up, like compound interest. All of you can do it, but I guarantee not many of you will do it.”
P.S. What are your thoughts? Do you have any tips about reading habits? What has helped you or your company reinvent yourselves in the past? Please let me know in the comments below. Join the discussion.