The current London Olympics is the first games to be completed to budget. According to University College London neuroscientist Dr Tali Sharot, this is thanks to the recognition of something called the “optimism bias” – a human trait that can lead us to be more optimistic than realistic, sometimes to our downfall.
To compensate for humans’ tendency to fall foul of the optimism bias, the UK government created an estimate of what they would spend and how much time they would need that was on the generous side of the scale. They realized that in the past similar committees have vastly underestimated the costs associated with a project of this scale, as well as the time needed to complete them, and compensated accordingly when devising the 2012 budget.
Optimiism: Is it a help or a hindrance in business?
In this case, accounting for the optimism bias in the financial and temporal budgets saved the Olympic committee humiliation, public criticism, and — worst case scenario — failure to complete the games venues by the time of the opening ceremony.
But is optimism bias really a help, or a hindrance when it comes to our personal goals? For a start, it’s difficult to look at the current set of Olympic athletes and imagine that they have never set themselves big goals.
What is ‘realistic’ in Business?
When one looks at the challenges that the Olympic committee have faced over the last seven years, one can appreciate the enormity of the task at hand. Just one day after it was announced the UK had won the bid for the 2012 Olympics, terrorists carried out a series of attacks on the London transport system, killing 52 people. Last summer, the country was rocked by several days of night-time rioting, which damaged businesses and homes around the capital, and caused five deaths. Over 3,100 people were arrested. Even more recently, the committee have had to contend with the failure of their security company to hire enough staff, and a customs and immigration staff strike.
In light of the above, was completing the Olympic Park and hosting such a visible, important event realistic? Many along the way have said no. But the proof is currently on display.
So what counts as an ‘unrealistic’ goal? Does such a thing even exist? Psychological studies have shown that having high expectations of the future actually improves people’s performance, and leaves them feeling more optimistic and satisfied in the present. We often hear that we might be happier if we lowered our expectations, but research has shown that this isn’t the case especially in business.
Unrealistic goals do exist, but they’re not the fault of the goal itself. They are made unrealistic because of improper planning, inappropriate expectations, and lack of action. What makes the difference between an unrealistic and a realistic business goal is not the content of the goal, but the attitude and preparation that one undertakes in order to achieve it.
How to set realistic and attainable goals in business
There are several defining factors that can turn a seemingly unrealistic dream into a realistic – and therefore obtainable – goal.
The first is action. An unrealistic goal is defined by a lack of action – the ideas of achieving the goal of earning a specific amount of money during the business year, winning an industry award, and being featured in X number of publications are all beautiful dreams. However, they won’t happen without meaningful, deliberate, and thought-out action. The Olympic planning committee decided to use the Olympics to regenerate some of the most deprived areas in London, however having that goal in itself wasn’t enough to achieve the regeneration – they had to actually take action.
The second is specifics. It’s hard to achieve a goal when the goal itself isn’t defined. Notice in the first factor, I wrote about a ‘specific amount’ of money. ‘More money’ won’t cut it – because there’s no definition of what ‘more’ means. To achieve a goal, everything needs to be specific, especially amounts and timescales. The Olympic committee had very specific goals that included building five permanent venues, 30 new bridges, an 80,000-seat stadium, and 11 residential blocks to house 2,818 people, and all by a set date.
Thirdly, the goal needs to be broken down into actionable steps. With large or complex projects, the end result can be clear, but how to get there isn’t always obvious. When a project manager is starting the planning process, the best place to begin is with the very next step, then to move on to the very next step after that, then the next after that, and so on.
An important part of breaking a goal down into actionable steps is to have measurable milestones. Important or ambitious goals often feel very distant and, the more distant they feel, the more demotivating this can become for the person trying to achieve them. Milestones can be viewed as intermediate deadlines or mini-goals that all contribute to complete the larger, more ambitious end goal.
The final factor that turns the seemingly unrealistic into the realistic is the ability to adjust and adapt timescales and endpoints. An important part of achieving goals rests on finding the balance between something that is challenging enough to be stimulating, and something that is so taxing that it becomes discouraging. Measurable milestones play an important part here, as they can contribute to motivation, and demotivation. If a project’s milestones are too easy, make them more challenging. If they feel too challenging, tone them down. The end result, the all-important goal, remains the same, but the intermediate goals can shift and change.
When is a goal unrealistic?
In business, a goal cannot be deemed ‘unrealistic’ until it has been tried and tested.
Sometimes, a company or individual will take a step towards a goal that appears unrealistic, impossible and fanciful, only to discover that its perfectly achievable. Equally, that company or individual might discover that the naysayers were correct, and that the end results of the goal aren’t enough to warrant the time, resources and energy it would take to get there. Even then, this discovery doesn’t mean giving up on the goal entirely, but rather adjusting expectations, lengthening timeframes, exploring alternative ways of meeting the business goal, and starting the steps above over again.
Written By: Hannah Braime