When people want to achieve something in life or work, the advice given is usually to develop and implement a goal. More recently, some have advocated focusing on habits instead of goals.

Which one is right?

The answer is a bit of both. Let’s review some of the arguments and research.

Goals

We have all heard this advice: Set goals if you want to accomplish anything substantial. That advice comes from personal coaches, self-help gurus, management consultants, managers and executives and is deeply embedded in leadership practices.

In organizations, “stretch goals,” or “hairy audacious goals,” as a management motivational and performance strategy, are widely practiced. Yet, there is evidence that goal setting may be counterproductive if not a waste of time.

Our society, at both the individual level and in organizations, has an obsession with goal setting, particularly “stretch” goals or “audacious goals.” We tie goals to accomplishment. In our culture, an individual or organization cannot be considered successful unless goals are achieved. And the usual motivation method used by leaders to achieve these goals is the continual focus on “improvement,” “bigger and better,” through harder and harder work, and increased productivity. And the way to measure that success is to measure goal attainment.

The following is a typical template for goal setting:

  • Write down the goals;
  • Make goals specific and clear;
  • Indicate how you’ll measure goal accomplishment;
  • Have goal timelines and deadlines;
  • State goals in terms of specific outcomes or results;
  • Attach rewards, incentives for attainment and punishment for failure.

The support for setting goals has reportedly come from both academic/research sources and popular self-help sources. With the respect to the first, researchers reportedly surveyed the graduating seniors from the class of 1953 at Yale University. They asked if the class members had written goals for their future. Three percent did. The rest did not. Twenty years later, researchers were said to have gone back to the surviving members of the class. They discovered that those with written life goals had accumulated more wealth than all their classmates put together.

The only problem with this powerful finding is that there was no such study. Researchers at Yale and members of the class of 1953 all swear they never conducted or participated in any such study.

  • The second source of support has come from such self-help sources as The Secret, which encourages people to set ambitious goals through a process of visualization. No study I am aware of demonstrates a causal link between visualizing goals and their attainment.
  • Despite the popularity of goal setting, there is compelling evidence that regardless of good intentions and effort, people and organizations consistently fall short of achieving their goals. More often than not, the fault is attributed to the goal-setter. But the real problem may be in the efficacy of goal setting itself.

What’s Wrong With Setting Ambitious Goals?

Aubrey Daniels, in his book, Oops! 13 Management Practices That Waste Time And Money, argues that stretch goals are an ineffective management practice. Daniels cites a study that shows when individuals repeatedly fail to reach stretch goals, their performance declines. Another study showed 10% of employees achieved stretch goals. Daniels argues that goals are motivating people only when they have received positive rewards and feedback from reaching them in the past.

The Center For Disease Control estimates that 34% of Americans are overweight and a further 34% are obese, which means almost 70% of the population is dangerously unhealthy. That’s a curious result, despite the proliferation of weight-loss programs that usually focus on weight-loss goals. The easy explanation would be to attribute fault to an individual for lack of will or effort. But the problem may be inherent in the validity of goal setting.

Sim Sitkin a Duke University business school professor completed a study of stretch goals and found they were most likely to be pursued by desperate, embattled companies that would have difficulty adapting if the goals failed. He says: “We conclude that stretch goals are, paradoxically, most seductive for organizations that can least afford the risks associated with them.”

L.A. King and C.M. Burton in an article entitled, The Hazards of Goal Pursuit, for the American Psychological Association, argue that goals should be used only in the narrowest of circumstances: “The optimally striving individual ought to endeavor to achieve and approach goals that only slightly implicate the self; that is only moderately important, fairly easy, and moderately abstract; that do not conflict with each other, and that concern the accomplishment of something other than financial gain.”

Adam Galinsky, a professor at Northwestern University’s Kellogg School of Management and one of the authors of a Harvard Business School report called Goals Gone Wild,” argues that “goal setting has been treated like an over-the-counter medication when it should be treated with more care, as a prescription-strength mediation.” He argues that goal setting can focus attention too much or on the wrong things and can lead people to participate in extreme behaviors to achieve goals.

The authors of Goals Gone Wild, have identified several specific negative side effects associated with goal setting: “An overly narrow focus that neglects non-goal areas; a rise in unethical behavior; distorted risk preferences; corrosion of organizational culture; and reduced intrinsic motivation.”

Maurice Schweitzer of the University of Pennsylvania and Lisa Ordonez of the University of Arizona, co-authors of Goals Gone Wild, have studied the psychology of goal attainment, and in several experiments have shown that when people self-report their achievement of goals, if they are not entirely successful, a significant percentage of them lie to make up the difference.

One inherent problem with goal setting is related to how the brain works. Recent neuroscience research shows the brain works protectively, resistant to change. Therefore, any goals that require substantial behavioral change, or thinking-pattern change, will automatically be resisted. The brain is wired to seek rewards and avoid pain or discomfort, including fear. When fear of failure creeps into the mind of the goal setter, it becomes a “demotivator,” with a desire to return to known, comfortable behavior and thought patterns.

New research in the INFORMS journal Organization Science shows that this is the exception and not the rule. For many organizations, stretch goals can serve to undermine performance.

The study, “Stretch Goals and the Distribution of Organizational Performance,” was conducted by Michael Shayne Gary of UNSW Business School in Sydney, Miles Yang of Curtin University, Philip Yetton of Deakin University, and John Sterman of the Sloan School of Management at MIT. They examined the impact of assigning stretch or moderate goals to managers. Study participants were assigned moderate or stretch goals to manage the widely used interactive, computer-based People Express business simulation.

The researchers found that about 80 percent of participants failed to reach the assigned stretch goals. Compared with moderate goals, stretch goals improved performance for a few, but many abandoned the stretch goals in favor of lower self-set goals or adopted a survival goal when faced with the threat of bankruptcy. Consequently, stretch goals generated higher variation in performance across organizations, created large performance shortfalls that increased risk-taking, undermined goal commitment, and generated lower risk-adjusted performance.

“We find that stretch goals are not a rule for riches for all organizations. Instead, they lead to riches for a few organizations,” said Gary. “Instead of being evidence that organizations should adopt stretch goals, the small number of successful cases is evidence that stretch goals do not benefit most organizations. Many organizations do not benefit and may even suffer from adopting stretch goals.”

The authors suggest that whether boards or top management should adopt stretch goals in their organization depends on their attitudes toward risk. Those with large appetites for risk may still prefer stretch goals. In venture capital or private equity, the value created by “big winners” can more than offset the poor returns or losses on the majority of organizations in the portfolio. These organizations may also be more able to absorb the poor returns or losses created by aggressive goals. However, for those who are risk neutral or risk-averse, stretch goals may not be desirable because of the lower expected risk-adjusted returns. For example, stretch goals may not be appropriate for medium-sized or family-owned businesses that may not be positioned to recover from potential losses.

Habits

In his book, The Power of Habit: Why We Do What We Do in Life and Business, Charles Duhigg, a business reporter for The New York Times, explains how some companies have achieved enormous success by altering people’s habits. By luck or design, they’ve been tapping into a powerful psychological pattern: the “habit loop.”

The habit loop is a three-part process. First, “there’s a cue, which is kind of a trigger for an automatic behavior to start unfolding,” Duhigg  says “There’s a routine, which is the behavior itself … and then there’s a reward, which tells our brain whether we should store this habit for future use or not.”

The science of habit-forming can be used not only to sell products but also to transform people or entire companies. To do this, Duhigg says, you have to target a particularly significant behavior he calls a “keystone habit.” “If you can change a keystone habit, you unlock all these other patterns in someone’s life or an organization,” Duhigg says.

James Clear, in his best-selling book Atomic Habits, provides a comprehensive and practical guide on how to create good habits, break bad ones, and get 1 percent better every day. He augmented Duhigg’s habit loop by identifying four components: the cue, craving, response and reward. The cue triggers a craving, which motivates a response, which provides a reward, which satisfies the craving and ultimately becomes associated with the cue. Clear also describes the following:

  • An atomic habit is a regular practice or routine that is not only small and easy to do but is also the source of incredible power; a component of the system of compound growth.
  • Bad habits repeat themselves again and again not because you don’t want to change, but because you have the wrong system for change.
  • Changes that seem small and unimportant at first will compound into remarkable results if you’re willing to stick with them for years.
  • Habits are the compound interest of self-improvement.
  • The most effective way to change your habits is to focus not on what you want to achieve, but on whom you wish to become.
  • The Four Laws of Behavior Change are a simple set of rules we can use to build better habits. They are (1) make it obvious, (2) make it attractive, (3) make it easy, and (4) make it satisfying.
  • The environment is the invisible hand that shapes human behavior.

How Habits and Goals Interact

A research study by Wendy Wood and colleagues published in the journal Perspectives on Psychological Science concluded that habits are not dependent on having goals.

The Conventional View of the Relationship Between Goal and Habit—An Example

An esteemed professor, perhaps thinking about an important research project, tries to enter his office building through the doorway he has used for years, despite knowing that the entry was recently closed for renovations. On realizing his mistake, he alters course toward a still-open doorway. This scenario reflects a central question in action control: How do habits and goals guide action choice?

Your response to this query will depend on how you define a habit. The majority of contemporary explanations of habit state that situations directly induce habitual responses. The professor was walking through the crowd when the familiar cues caused him to take the usual route, which was suddenly blocked. He overrode his automatic response and found a different entrance to the building once conscious goal pursuit was awakened when he came across the barrier.

Research has suggested that “all human activities are motivated by distinct goals,” with the consequence that “habitual behavior is goal-driven” and intended to produce desired behavioral outcomes. According to this theory, the professor’s overlearned habit persisted because he continued to prioritize using the old entrance over using the new one.

Because it accords with people’s deeply ingrained confidence in their agency, the idea that all action (even habits) must be goal-driven is intuitively compelling, as Wood and her colleagues have demonstrated in their studies. This alternate account, however, has a significant weakness: It cannot be verified in practice. By taking into account one, two, or 100 goals, research may successfully show the independence of overlearned behavior or habits from goals.

Habit Memory Is Insensitive to Newly Changed Goals and Beliefs

A system called habit memory sustains recurring experiences from momentary whims and temporary changes in people’s goals and ambitions. Strong habits, therefore, endure in memory whether or not they are consistent with current desires, in contrast to goals that motivate and lead activity in response to current desired ends. Habits build gradually with practice and reflect the slow, incremental process of creating memory, similar to procedural learning, which is the learning of how to complete an action. This feature of procedural memories is shown by the proverb “you never forget how to ride a bike.”

Time constraints, stress, and exhaustion decrease people’s ability and willingness to pursue purposeful goals but do not affect habit memory. In particular, time constraints are likely to impair people’s ability to make decisions, stress directs people to deal with the stressor, and exhaustion lowers overall motivation.

The demonstration of multiple influences of a given behavior—one that influences habit performance but fails to affect goal pursuit and another that influences goal pursuit but not habit performance—provides the strongest evidence that habitual control is distinct from goal-dependent control.

An example can be seen in a research experiment on food preferences. In one experiment moviegoers who had strong tendencies of eating popcorn continued to do so even when offered stale popcorn, which they claimed to dislike. On the other hand, participants with weaker habits consumed more fresh than stale popcorn. As a result, motivation was effective in changing weak but not strong eating habits. In a second trial, the setting was altered so that participants watched music videos while receiving popcorn in a dimly lit conference room on campus. Others who had strong habits of eating popcorn at the movies were no longer cued by the environment and reacted similarly to people who had weaker habits: Everyone consumed more fresh popcorn than stale popcorn.

Participants’ hunger and liking for the popcorn as proof that these popcorn-eating habits were not goal-dependent.

Wood and her colleagues argue the definition of habit and the characteristics of habit memory help us distinguish between the various circumstances in which behaviors are influenced by habits and goals. Changes in context signals prevent habits from being activated, and instead, people are more inclined to base their behaviors on their current goals.

On the other hand, time constraints, exhaustion, and stress prevent slower, more laborious goal pursuit and force people to act according to habits that are both goal-congruent and goal-incongruent.

According to some research, people suffer “action slips” in their habits six to seven times per week. These mistakes sometimes involve engaging in undesirable habit routines when we were trying to do something else. This finding highlights the persistence of habits despite whatever goals they may have.

Additionally, in line with the rapid activation of habits, action slips are most common when people behave without thinking, such as when they are distracted or absentminded. Due to the speed at which they are engaged in the mind as well as the durability of habit memories despite their goals or objectives, habit-based action lapses are a result.

Wood and colleagues also investigated the question of whether a goal might cause people to underestimate the influence of habit in their behavior.  In one study, participants rated how much their coffee consumption was influenced by habit and exhaustion, the two main justifications offered during pilot testing. Then, for a week, participants reported their current level of exhaustion, the surrounding situation, and how much coffee they had consumed eight times each day. According to the findings, habit and exhaustion were the two main reasons why people drank coffee, and both had comparable-sized effects. However, in the participants’ experiments, exhaustion was a considerably more significant factor than habit in determining their coffee consumption. This underestimating of habit persisted whether participants were attributing behaviors to themselves or others, their overall coffee consumption or a specific coffee-drinking event.

Wood and colleagues conclude that while people prefer to focus on and believe their behavior is a reflection of goal choice, they underestimate the power of habit and overestimate the power of goal pursuit. Goal attribution may be a reflection of the sense of agency and control they give people when it comes to understanding their own and other people’s activities.

Final Thoughts

It’s clear from the research, that most people in both an individual and organizational setting believe and practice the setting of goals as a strategy for achieving results, yet the research shows there are inherent problems and limitations to using goals, particularly “stretch” goals as a sole strategy. In contrast, the elimination of bad habits and establishment of good habit routines can augment goal attainment, and in many cases be a more effective strategy for achieving desired outcomes. To ensure successful outcomes, we need to have both.

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