Setting goals

Trading is often about how to take the appropriate risk without exposing yourself to very human flaws.
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Euler
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Joined: Wed Nov 10, 2010 1:39 pm
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Peter wrote:Ok so this is to do with weight loss, but I think it's easy to substitute the weight loss metric for a profit target
Are you one of the many people who start the New Year off with a list of resolutions? Does this list look remarkably similar to last year’s? Are you also one of the many people likely to break these resolutions before the end of January?

Then I have some good news from research done by persuasion scientists…..It may not be your fault!

New research finds that traditional approaches to goal achievement which advocate setting a single and specific goal like losing a certain amount of weight each week or saving a particular amount of money might actually backfire on you.

Writing in the Journal of Consumer Research, researchers Maura Scott and Stephen Nowlis show that we’re much more likely to re-engage with a goal if, rather than setting a single, specific numbered goal (e.g. lose 3 pounds a week) we set a goal with a high-low range that averages the same (e.g. lose 2 – 4 pounds a week) instead.

In one of their studies, half the participants at a Weight Watchers club were assigned a high-low range goal e.g. ‘lose 1 – 3 pounds each week’. The other half we assigned a single number goal e.g. ‘lose 2 pounds each week’ for a total of 10 weeks. Aside from this small change in goal, all the other activities the groups took part in; such as healthy eating classes and good exercise regimes, remained the same.

Weight Control

At the end of the 10 week period, the researchers measured each group’s performance. They measured the amount of weight each group lost, as well as their willingness to re-engage in another 10-week program. Although there wasn’t much difference in terms of weight loss between the groups (during the first three weeks, those in the high-low range group lost an average 2.67 lbs compared to 2.2 lbs in the single number goal) the effect that having a high-low range goal on persuading dieters to stick to the program was huge. Those dieters assigned a high-low range goal were 60% more likely to enroll in another 10 week program at the end of the study.

Diet club leaders and health club managers take note. As any nutritionist will tell you, it is sustained weight loss over time that matters most and so the shift from setting a specific goal to setting a high-low goal, while seemingly small, could make an important difference when persuading folks to remain committed to their goals.

So why are people more likely to re-connect with a previous goal if it is less specific, rather than more specific?

High five!

Well there are two factors that primarily influence whether someone will pursue a goal or not; 1) How challenging the goal is and 2) How attainable it is. People need to feel sufficiently challenged so that they feel a sense of accomplishment, but only to the extent that there is a realistic possibility they can achieve the goal. Unlike single number goals, where you have to pick a number that is either relatively attainable, relatively challenging, or compromise somewhere in-between, high-low range goals have the advantage of engaging both these factors.

Let’s look at how this might also apply when reconnecting to your business goals.

The next time you have the task of calling a long list of names you collected at last week’s Expo, you might find yourself more motivated to complete the task if you set yourself a high-low range goal e.g. call 20 – 30 of them by the end of the week, rather than a more specific goal of making 25 calls. The same could also be true when it comes to motivating others. Managers who traditionally set single goals for their sales reps, call centers or customer service staff, might find that they can keep their teams more focused on those goals and motivated for longer, if they set high-low goals instead.

Source: Scott, M. L., & Nowlis, S. M. (2013). The Effect of Goal Specificity on Goal Reengagement. Journal of Consumer Research, 40(3), 444–459
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