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Do Goals Prevent Success?

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An Effectual Understanding of Impact

I’ve long been interested in the idea of the impact instinct: the ability for a trained professional to continuously generate big wins at a rate much higher than his or her equally well-trained peers (see here and here and here).

What explains this impact instinct?

A reader named Jason recently pointed me toward some interesting research relevant to this question. The topic is effectuation, a theory of entrepreneurial success devised by Saras Sarasvathy (see above), a professor at the University of Virginia’s Darden School of Business.

The origin of effectuation is a study Sarasvathy conducted in 1997. She traveled the country to interview 30 different entrepreneurs who founded successful companies (their company valuations were all measured in hundreds of millions of dollars). Instead of simply asking them their approach to business, she had each solve a 17-page problem set containing 10 decision problems relevant to introducing a new product. She asked that they talk out loud about their thinking, and then later scrutinized the transcripts of these sessions. The patterns she identified became effectuation theory.

In a nutshell, this theory notes that we’re used to thinking about problems (especially in the business world) using causal rationality. We identify a goal and then attempt to identify the optimal path to accomplishing this goal given our current resources. This process is top-down with the final goal occupying the apex position.

The entrepreneurs Sarasvathy interviewed did not rely on causal thinking. They instead relied on an alternative she called effectuative thinking.

Effectuative thinking, unlike causal thinking, is bottom-up. It doesn’t start with a final goal in mind. Instead, as Sarasvathy explains, “it begins with a given set of means and allows goals to emerge contingently over time.”

Sarasvathy identifies four main principles to approaching your work in this manner:

  1. Start with what you already know how to do well.
  2. Filter your efforts to avoid big downsides not to select for big upsides.
  3. Work with other people who bring new abilities to the table.
  4. Take advantage of the unexpected .

If you approach a new business using these guidelines, you might not know in advance your main product or even your market, but according to this theory you’re optimizing your chances of nonetheless ending up successful.

Here’s Sarasvathy describing effectuation in action:

“Plans are made and unmade and revised and recast through action and interaction with others on a daily basis…Through their actions, the effectual entrepreneurs’ set of means and consequently the set of possible effects change and get reconfigured. Eventually, certain of the emerging effects coalesce into clearly achievable and desirable goals — landmarks that point to a discernible path beginning to emerge in the wilderness.”

An analogy that helps me understand these issues is that the marketplace can be described as an unpredictable and complex landscape with only a small number of peaks representing massive potential.

Causal thinking has you try to draw a map to a peak in advance. Given the complexity of the landscape, this is likely to fail. Your best bet is that your map, by pure luck, happens to lead you straight to a high peak.

Effectual thinking, by contrast, has you hone your navigation skills. It teaches you how to systematically search the landscape around you, bringing along guides that know the area, and keeping you attention tuned to the tell-tale signs of elevation gain.

There are, of course, other business trends that echo similar ideas (think: lean methodology). But what’s nice about effectuation is that its principles are presented in a general way that seem applicable beyond the world of business start-ups.

The reader who brought this work to my attention, for example, is involved in a study to see if effectuation explains star academics (the original question that piqued my interest about such issues).

One could imagine the same theory being just as applicable to explaining consistent success in other fields, such as book writing or even personal productivity.

At the very least, Sarasvathy’s scientific results underscore what I’ve long argued: the process of becoming a stand out in almost any field is way more nuanced and complicated than most suspect.

35 thoughts on “Do Goals Prevent Success?”

  1. This type of think i find is what works best for HARD proofs. Set goals around undisturbed time, but no judgements on outcomes. This makes sense, if it’s new work, one does not know the result by definition.

    Key thing is not let self-doubt get in the way. I.e. “I’m not being productive if I don’t have goals”.

  2. This is a great post, Cal.

    My thinking on goals has evolved to 2 kinds of goals –
    1. Process goals – i.e. how I aim to approach the problem
    2. Directional goals – i.e. where I intend to get to

    And the directional goals are called “directional” for a reason – they are not too specific. I’m sure this will evolve more but I’m glad to hear about effectual thinking.

    THanks for sharing!

  3. So, in other words, effectual thinking is about having a hammer and looking for things that look like a nail while causal thinking is about identifying a problem and looking for the best solution to it.

    I can see why the effectual approach might work better when you are really good at something but you lack breadth. However if you’re really good at one one thing and moderately good at many others (multiple strengths) it seems to me that, once you have hammered down all easy to find nails, you are better off looking at a wider variety of problems instead of keep looking for nails.

  4. I’m glad you linked to The Lean Startup but somewhat unclear, if you’ve read it, how you think it doesn’t (clearly) apply to the world outside business startups.

    For my own part, I think that book is the perfect complement to So Good They Can’t Ignore You. I actually think it allows people to go about building “career capital” in a smarter way.

    For one, “minimal viable products” are a more rigorous and much better way to learn about what the market values than “small bets.” For another, the deliberate creation of products through many iterations is better to focus on than the deliberate practice of skills through many hours.

    The latter may result in someone with a considerable amount of talent, but talent alone does not pay the bills. Only talent as it is embodied in a product or service that people value does. And showing how to get to that over many iterations is what The Lean Startup excels at.

    I honestly don’t know how anyone could not benefit greatly from reading this book after So Good They Can’t Ignore You (or vice versa). This is especially true since everyone today would do well to view their own career as a startup.

  5. In the last sentence you ask if this can be applied to book writing. It certainly can, and I will discuss your post with my faculty who are in book and article publishing groups (I’m running nine groups this summer). Books should arise more or less organically from the body of research that the scholar tests in the world via conference papers, published articles, and other scholarly interaction, especially in direct conversation with a variety of top editors as the book grows. However, often the opposite is preached, and a scholar hides away from the world, writing an entire manuscript without growing it in this way. Many subscribe to an insidious myth that academic books should be completely finished before sending one-at-a-time to publishers for exclusive consideration. Even though from a business perspective that’s absurd –How can most people write effective books in such intellectual isolation? How can it possibly make sense to send to one publisher at a time before you’ve queried the entire field to assess the range of interest? Why squelch potential competition for your book? etc.–many still insist, loudly and with great influence on their cowed peers, that this “develop in a vacuum and then fling to just one victim” method is the way it should be done.

    The more organic method, where you build a book via creative, dynamic, flexible, adaptable scholarly conversations at many levels over time including conferences, journals, and colleagues, plus having key university press editors in the game from the beginning (editors who will compete for the book!), allows your points 3 and 4 to flourish: “(3) Work with other people who bring new abilities to the table; and (4) Take advantage of the unexpected.” Also, I’m continually amazed by the generosity of scholars and top editors willing to suggest constructive ideas for a book that is growing in view of others.

    If you ever want an amazing, real world example for your blog, let me know.

    • Good advice but I don’t think that’s true for everyone. Gary Becker, Nobel Prize winner in Economics, avoided conferences and most public events because he didn’t agree with mainstream research trends and felt he had nothing to gain from attending them. What if the ideas you’re working on don’t benefit from discussion from others and simply need to be developed on your own?

  6. Wow, this was an intriguing post that definitely captured my attention! I want to mostly echo, but also modify and rephrase, the apt observation above by Daniel that Cal’s book So Good They Can’t Ignore You superbly complements what Sarasvathy has identified as the four main principles to approaching your work. Also in this area, Tim Harford’s book Adapt: Why Success Always Starts with Failure has a few good ideas; the idea that especially resonated with me was where Harford cites Google’s Eric Schmidt as saying that a particularly effective approach to your work is to figure out, and then put into action, the most at-bats that you can fit into a workday. In other words, establish a cadence of creatively experimenting with, and tweaking, approaches to any and all ongoing projects that can be crammed into any given day.

    I had previously read Geoffrey Colvin’s book Talent is Overrated: What Really Separates World-Class Performers from Everybody Else; it’s quite good, but its message never quite got driven home until I had read the take on that message in Elizabeth Grace Saunders’ The 3 Secrets to Effective Time Investment: Achieve More Success with Less Stress and in Cal’s book.

    Cal is flat down one of my favorite writers, and I own a copy of every single book he has written so far. In particular, his book How to Win at College is amazingly helpful in the strategies it presents for mastering hard, technical material – That’s all stuff which is highly relevant to what I do daily as a software developer… I recently posted on my blog Programming Digressions, which you can check out by clicking on my name as it appears above), an essay in appreciation of the invaluable ideas that both Cal and Elizabeth routinely share with us readers, by way of their books and blogs. Thank you, both!

  7. How do you feel this concept applies with something like deliberate practice, where you are setting concrete goals to work towards mastery of a certain domain? The deliberate practice approach seem like an inherently top-down approach.

  8. This echoes much of what N. Taleb describes in his book “Antifragile.” It’s all about mitigating the downside and maximizing exposure to a potential upside.

  9. This kind of reminds me of the whole “agile development” term that comes out of software development — basically my understanding is that you want to put stuff out to your customer as quickly as possible, so you can respond to feedback, rather than wait for a “final product” that might not be what anyone wants.

  10. I’m reading Anti-Fragile at the moment and I can’t help but think that this approach is exactly what Nassim Taleb would recommend.

  11. Effectuation seems to work in any field. This week I was studying a book by Teresa of Avila, a 16th century nun and mystic. Here’s what she says: “let us strive to get to know ourselves better and better, even in the smallest matters, and take no notice of the fine plans that come crowding into our minds”. Grand plans are irrelevant if we can’t execute the smallest matters right in front of us.

    After many years in business, here’s my observation. Obsessive goal-setters are really good one thing: setting goals. Successful people are extremely good at being disciplined and effective in context.

  12. My view has always been that the process of thinking about goals is more useful than the goals themselves. The contemplation and introspection that creating goals requires are definitely useful things.

  13. Hey Cal,

    Great post. I also want to echo what Jonathan H and Luke have said in the comments. I would highly recommend you Google Nassim Taleb (of Black Swan fame) and his ideas in Antifragile. Specifically, the second point reminds me of choosing convexity over concavity; where the latter introduces you to incremental benefit but fat-tail risk of loss, the former gives minimal downside (as a cost) but provides maximum exposure to positive Black Swans. Your fourth point here, about taking advantage of the unexpected, is big point he makes in his books, altogether known as Incerto.

    Would highly recommend checking out his work.

  14. Survivorship bias:
    I note that Sarasvathy’s approach as you’ve presented it is highly subject to survivorship bias. Rather than identifying an approach and noting that most who follow that approach succeed, she’s identified those who have succeeded and looked for the approach they’ve taken. Selecting for those who’ve succeeded we’d see the same thing if:
    1. the approach is awesome; and
    2. the approach is high variance but low expected return.


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