Recently, one of my coaching clients asked me a question that many people tend to struggle with. And quite frankly, I used to struggle with this topic for years as well. He asked me:
‘Jari, should I set highly ambitious goals or keep them realistic?’
In one book you read to shoot for the moon and set goals so high that it absolutely terrifies you.
And in another book, you’re told to keep your goals as realistic as possible so that you’ll actually achieve them. Even though both mean well, it’s difficult to uncover the truth with these conflicting messages.
So, what goal-setting method does yield the best results? Let’s settle the debate once and for all by looking at arguments from both approaches.
The Argument For Setting Highly Ambitious Goals
The main reason why some people prefer to set highly ambitious goals is that it forces you to grow and upgrade your level of thinking. You’ll need to shift your paradigm, fix blind-spots, develop new skills, and overcome limiting beliefs to achieve a goal 3x — 10x what you’re used to.
For example, if you previously earned an annual profit of $50,000 with your business and your next highly ambitious goal is to earn one-million dollars in profit, you’ll need to come up with entirely new strategies and approaches to get there.
Essentially, setting a highly ambitious goal forces you to level up and become better.
The same thinking that got you to $50,000 won’t get you to one-million dollars. And the same thinking that got you to one-million dollars won’t get you to ten-million dollars.
In other words, your daily habits, strategies, skills, and beliefs need to be upgraded — or else you won’t achieve your goal.
When setting realistic goals, however, there’s much less pressure to upgrade your habits, skills, strategies, and beliefs. You can basically remain who you are and still achieve a realistic goal.
You can stay safely in your comfort zone and won’t be forced to grow that much compared to setting highly ambitious goals.
All in all, pursuing highly ambitious goals spark much more motivation and force exponential personal growth — much more so than setting realistic goals.
The Argument For Setting Realistic Goals
The biggest argument for setting realistic goals instead of setting highly ambitious goals is harsh but true. In most cases — maybe even in nine out of ten cases — you simply won’t achieve highly ambitious goals.
This is because, as humans, we have the tendency to both overestimate our capabilities (known as the Overconfidence Bias and the Dunning-Kruger Effect) and to plan much more than we can realistically accomplish (known as the Planning Fallacy).
Precisely because of these fallacies, the gap between where we are and where we need to go is intimidatingly big.
After a few weeks, when the initial motivation of setting the goal has worn off, we realize how off-track we are with our progress and how much still needs to be done before the goal is achieved.
This is discouraging, intimidating, and counterproductive.
More often than not, it leads us to stop pursuing our goals entirely — leaving us directionless, frustrated, and demotivated.
Paradoxically, striving for more can leave you with less.
Of course, there are exceptions to this rule. But in reality, most people want to run before they’ve learned how to walk. And even though the ambition can be admired, it often leads to failure.
If you’d set realistic goals instead, you’d avoid these pitfalls of the overconfidence bias and the planning fallacy. You’d be more empowered to make productive progress and less likely to give up as your goals are not as intimidating.
In fact, goals that might seem realistic at first are often much more ambitious than we realize — especially in the early stages of a journey. Again, this is because of the planning fallacy and the overconfidence bias.
Learn how to crawl first. Then, learn how to walk. Then, learn how to run. Then, learn how to fly. Following this process is much more likely to yield success.
How I Fell For The Dunning-Kruger Effect
I’ve personally experienced this ‘wanting to run before you can walk’ tendency. When I started my first business, I dreamed about all the money I’d make, cars I’d drive, and countries I’d travel to. I decided to make these dreams more tangible by setting a highly ambitious goal around it.
I don’t remember the exact number, but I do know that my one-year goal was something like ‘Earn $500,000 by the end of this year’.
In hindsight, I can laugh about my stupidity. But at that moment, I truly believed I could make it work — which is precisely the description of the Dunning-Kruger Effect.
The reality was harsh, however, as I wouldn’t earn a single dollar in my first 18 months of being in business.
I wanted to earn $500,000 in a year before having learned how to make $10,000 in a year.
I wanted to fly before I even knew how to crawl.
This fallacy would almost cost me my dreams, as I was so off-track with my goals that it was hugely demotivating, and I thought about giving up many times.
In hindsight, it was the hard-but-necessary lesson I needed to learn to approach my dreams and goals with a healthy dose of realism from then on.
The Goal-Setting ‘Sweet Spot’
The debate between setting realistic goals or highly ambitious goals isn’t about picking one over the other — rather, it’s about combining the best of both worlds.
As soon as we combine both ingredients, we create the perfect cocktail for high performance, personal growth, and goal-success.
To reach the goal-setting ‘sweet spot’, you need to set goals that are ambitious enough to stretch your limits, spark motivation, force you to grow, upgrade your thinking, and inspire change.
However, these goals must also be realistic enough for you to remain confident in your ability to achieve it — especially after the initial motivation has worn off.
They must accurately reflect where you are in the process, how much (or how little) experience you have, and how much you still have to learn. They must take into account the Overconfidence Bias and Planning Fallacy.
Never neglect where you currently stand. Else, you’re only fooling yourself.
By combing the best of both worlds, you set a goal that’s ambitious enough to spark motivation and stimulate growth — and realistic enough to avoid falling off-track and getting discouraged.
Now Do It
Change only comes from taking action, not just from knowing about stuff. Therefore, as an action point for this article, set a 6 or 12-month goal that incorporates the best of both worlds.
Make it ambitious enough to stretch your capabilities and stimulate personal growth, but keep a sense of realism that accurately reflects where you are in the process right now.
(If you’ve already set goals, re-evaluate them with this message in mind)
To Your Personal Growth,
Founder Personal Growth Lab