Opinion & Analysis
In 1979 Harvard University (or was it Yale in 1953?) did an academic study.
OPINION: They got together a graduating class of MBA students and asked who had written down their career goals. About 3 per cent of the class said that they had. Ten years later they surveyed the members of the class and found that the 3 per cent of the class who had committed their goals to paper were earning 10 times the amount of the other 97 per cent combined.
What a great story and how instructional on the power of goal setting! Isn't that just the kind of thing that we need to get people motivated? Well, it would be a great story - the trouble is that it is not true. A search on the topic shows quite clearly that this is one of those things that has grown up by itself and been repeated by just about every motivational speaker around and so, even though false, it has taken on its own life.
No one knows who first invented this "study" but it is variously ascribed to Harvard or Yale (neither of which have records of any such study) with the dates given as 1953 or 1979. No one who quoted it had ever gone back to the primary source to verify it - various big-name US motivational speakers and writers have quoted the "study" but when asked about it, they were simply quoting one another.
And so it became a classic urban myth. To my embarrassment I picked up the "study" from someone about 10 years ago and also quoted it for a while. I had been told that it was the subject of an article in Harvard Business Review. Forbes magazine was still quoting the "research" two months ago.
All of this is unfortunate: intuitively, setting and committing to goals seems like it should lead to greater success. Well, happily, goal setting does improve the chance of success: research has been done and although not as spectacular as the Harvard/Yale work, there is good reason to believe that you should set goals and commit them to paper. For example, there is a study out of Dominican University that found that people who wrote down their goals, told friends about them and then gave those friends weekly updates were 33 per cent more successful in accomplishing those goals than people who merely formulated goals. Moreover, there is work from the field of neuroscience showing how the brain works to make this happen.
For me, the key to setting goals is commitment. This means that you pledge yourself to do something and give yourself no scope for fudging - goals that you set must be hard and fast with no ability to fib about whether or not you achieve them. In effect, setting goals is promising yourself that you will do something (pay off the mortgage, save for a car, advance a career etc) and the way that you structure your goals and the language that you use to express them, will dictate the amount of commitment that you have.
You have to make it hard to weasel out of the commitment that you have made to yourself. This is why many people believe that goals should be SMARTI - ie, specific, measurable, achievable, relevant, time-bound and in writing. When goals are specific and measurable (rather than vague and imprecise) whether you have achieved them or not is indisputable. This is binary: either you have or you have not.
As such, a goal is not a general direction - it is a very definite destination. Goals should be numeric if possible as nothing is more definite than a number: "We will have retirement savings of $300,000" is a lot better than "we will try to improve our retirement savings".
A goal should also be time-bound. This means that there is a time by which the goal will be achieved; eg, "we will have repaid the mortgage by 2022" is unequivocal and cannot be wriggled out of.
Finally, putting the goal in writing also makes it certain: meaning and the commitment to achieve the goal is clear, unarguable and recorded for the future. Committing to paper makes it certain what you intended.
Goal setting will not magically make you a third more likely to be successful, but a well-defined goal that is achievable, with a time limit and which you care about enough to put in writing, is a commitment that you are likely keep. If something is important to you, make it SMARTI.
Martin Hawes is an authorised financial adviser. A disclosure statement is available at www.martinhawes.com. This article is of a general nature and is not personalised financial advice.
- Sunday Star Times