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What Caused the Financial Crisis, and Is It Affecting You?
Monday, August 17, 2015 6:15 AM

Ty Bennett

By Ty Bennett, Founder, Leadership, Inc.

I realize that the title of this article might cause you to believe this is about money. It’s not. This is about failure; specifically, what causes it. Think about it—what causes failure?

As I’ve asked people that question, the typical response is incompetence. It is a lack of knowledge or skill needed to get the job done. And while that may be true on a small scale, significant failure is caused by something very different.

What caused the financial crisis? Was it incompetence? If we believe it was incompetence, then we are saying everyone on Wall Street is an idiot, which may sound funny, but it’s not true. The people working on Wall Street and those who contributed the most to the financial crisis were some of the most competent people out there. What caused the financial crisis isn’t incompetence, but rather overconfidence.

Incompetence is the problem of idiots. Overconfidence is the problem of experts and leaders. I heard Malcolm Gladwell talk about this concept recently, and it really got me thinking.

When the experts and leaders on Wall Street became overconfident, they made bad decisions, took unhealthy risks, thought selfishly, and shut out all constructive feedback. It was overconfidence that caused the market to collapse, and in many cases it is overconfidence that causes businesses to fail, nations to falter, and major crises to occur.

So what is the remedy for this problem facing the experts and leaders of today? Humility.

  • Humility keeps your ego at bay while allowing you to remain confident in your capabilities;
  • Humility makes you more concerned about what is right than who is right;
  • Humility embraces new truths rather than defending outdated positions; and
  • Humility never lets you stop learning, growing, or listening.

Overconfidence causes us to lose perspective and can be the cause of ultimate failure, and the remedy is a dose of humility—something every expert and leader needs.

Leaders in MotionTy Bennett is the closing speaker for the 2015 Leadership Conference and Expo in San Antonio, Texas, Sept. 10-12, and will talk on The Power of Influence. Bennett is the founder of Leadership, Inc., a company he and his brother started and built to more than $20 million in annual revenue while still in their twenties. Bennett has developed more than 500 sales managers globally with sales and leadership in 37 countries.

More information and registration for the 2015 Leadership Conference.