In a fast-paced world of investment management, success is often measured in hard numbers – returns, power of attorney, assets under management. However, focusing on hitting a target can lead to blindness due to the target. There, experts overlook the long-term outcomes of their actions. An example of goal-induced blindness that is often cited in psychological literature is the death of a climber on Mount Everest.
From burnout to ethical failure, the pursuit of short-term victory can come at a sudden cost. Just as companies like Wells Fargo and Volkswagen struggle to prioritize performance metrics over integrity, investment experts make decisions that can instantly profit while undermining sustainable success There is a risk. Recognizing the hidden dangers of unidentified ambitions is important to maintain both professional life expectancy and ethical leadership in the financial industry.
From a young banker who is obsessed with Adderall, using drones to spy on enemy practice, “blind by the goal” (“blind by the light” song “blind”) “Cue songs” There are examples of very motivated people. However, successful organizations have little discussion of this topic. In May, my panel at CFA Institute Live 2025 in Chicago It will become.
Early in my finance career, I worked in the research and trade sector of major banks. I managed a small team providing asset allocation advice to clients at large institutions. Most of the time, our company was competing to win a redistribution committee for the relevant portfolio, so we had to calculate numbers and provide recommendations quickly. There were clear goals to grow the activity. We counted trade delegation studies, recommendations, and winners/losses. We've covered the earth. Hundreds of research each year. The pace was fast and I loved it.
However, I developed target-induced blindness. I wasn't looking after myself. I was traveling non-stop and didn't get enough sleep. Most of the time, I woke up and needed a few minutes to remind me of which time zone I was in. When a sales person asked me to fly to Japan for a presentation on a day or two notifications, I was promoted. opportunity. It made me feel important. I spent most of my time on the road and remotely managed the rest of my team via Blackberry (remember them?).
At one point I had a cold in my head that had lasted for a year. I was stressed and tired. It took me a while, but I eventually realized my passionate work ethic was stupid. It's just stupid. Lack of sleep has weakened my immune system and reduced my productivity. I recommend Matt Walker's book Why do we sleep? About the negative effects of lack of sleep.
I often find myself not maximizing my chances as I focus on a narrow set of measurable goals at the expense of long-term happiness.. Most of the time, it's not blindness due to a complete goal, but it's a blind spot.
Companies can also suffer from target-induced blindness. Perhaps consider Wells Fargo employees who will likely open dummy accounts to increase the measurable targets related to the number of new accounts opened. Or Volkswagen is cheating on its carbon footprint. Or trading and investment companies that take too many risks to juice short-term returns. There are many examples.
One of the most powerful aspects of leadership psychology borrowed from economics is how people respond to incentives.
You need to encourage your team to work towards ambitious goals and to inevitably attach incentives to them. However, you need to argue two non-negotiable rules.
- No one should compromise their happiness. In the long run, mentally and physically healthy teams will crush any competition. Many young bankers report being obsessed with Adderall Wall Street Journal. This may increase their short-term productivity, but it is a path that almost certainly leads to negative long-term outcomes.
- Make it clear that everyone should be miles away from the ethical grey zone. Ask the Canadian women's soccer team. from New York Times:
The Canadian women's soccer team participated in the Olympics as a world gold medalist and eighth team. But that Paris game began with accusations of spies in New Zealand. This is the 28th place team in history, winning only 28 games. The World Governing Body of Football FIFA handed the Canadian coach Bev's priests a year of suspension, deducting six points from the team's Olympic group stage total and issuing a fine. Canada's appeal for the point deduction failed.
Ambition drives success. It encourages individuals and teams to achieve exceptional results. But too many organizations forget that mercilessly pursuing measurable goals can lead to burnout and ethical failure.
Without a perspective, ambition narrows our focus and blinds the warning signs. Radiation fallout can be serious. Tensed relationships, damaged reputations, and even the organization's collapse.
Ask important questions: Is this goal worth the cost? Are we achieving it in a way that aligns with our values? What is the impact on our happiness and the happiness of those around us? When ambition is guided by perspective, it changes from a dangerous obsession to a force for success.
Key takeout
Ambition is a powerful factor in success, but without a perspective it can be responsible. Whether it's financial, sports, or corporate leadership, goal-induced blindness can lead to ethical compromise, burnout, and short-sighted decisions. True leadership requires balancing ambition with awareness. The pursuit of success reinforces happiness, integrity, or not sacrificing long-term sustainability. By fostering a culture that prioritizes ethical decision-making and personal health, individuals and organizations can achieve not only short-term victory, but lasting and meaningful success.
CFA's Sébastien page is the author of Leadership psychology.
You might like it too
For Investment Leaders: Why should you learn to love losing?
For investment experts: Change in mindset that will change everything
Climbing the ladder in finance: a pie framework for investment professionals
source:
Saidi, Alexander. December 14, 2024. “Young bankers use it to get through the day and night,” Wall Street Journal.
Puleo, M. and Linehan, M. July 31, 2024. “The Canadian Olympic Soccer Spy Scandal explained what we know, who is involved and what the following is,” the New York Times.
