Why Learning Goals Are More Superior in Building a High-Performing Business

There is no doubt that in order to be highly productive and effective as an entrepreneur, you must be able to set smart and meaningful goals and pursue them relentlessly. However, when it comes to building a high-performing business, what is rarely emphasized is the limitations of goal setting specifically performance-oriented goals.

If you fail to achieve your business goals, many would blame you and say that your goals were not smart, or that you were not committed enough. But is that entirely true?

Apparently, there is evidence to suggest that goal setting is not all that you think it is and that most people are doing it wrong.

Goal Setting through Scientific Eyes

Research has begun to prove (in fact it has been proved many times before) that there are numerous side-effects of goal setting that are not emphasized by many so-called “management gurus” and motivational speakers. In their 2009 research paper titled Goals Gone Wild: The Systematic Side Effects of Over-Prescribing Goal Setting, Max Bazerman of Harvard Business School and his colleagues argued that “the beneficial effects of goal setting have been overstated and that systematic harm caused by goal setting has been largely ignored.”

The research goes on to conclude that “Goal setting has powerful and predictable side effects. Rather than being offered as an “over-the-counter” salve for boosting performance, goal setting should be prescribed selectively, presented with a warning label, and closely monitored.”

The Invisible Trap in Goal Setting

The underlying problem with goal setting is that it can lead to “tunnel vision” which is a narrow focus on reaching the goal while ignoring to develop and acquire the necessary skills required to reach that goal. For example, you can set a goal to attract new customers for your business while ignoring to develop the necessary sales and customer engagement skills that are essential to both acquiring new customers and retaining old ones.

Tunnel vision was observed in a 2006 research paper by co-authors Edwin Locke of University of Maryland and Gary Latham of University of Toronto titled New Directions in Goal-Setting Theory. Their research proved that too much focus on goal setting leads you to develop a narrow focus that neglects other non-goal areas that are important to your success. In their view, goals whether they are smart or not, can lead to a failure to recognize obvious problems unrelated to your target.

I see this all the time with entrepreneurs that obsess with social media as a platform to increase sales while ignoring to learn, capture, understand, and respond to the diverse needs and wants of their customers in a thoughtful, consistent and authentic way. If you have noticed a drop in participation or followers on your social media platforms, it maybe because your social media goals are too performance-focused.

You maybe bombarding your target customers with advertisements, products or services you are hoping they buy, and in the process are probably paying less attention to how your current customers feel about your overall brand. In other words, you are not learning, listening, appreciating, or treating your customers with the respect they deserve. I believe when it comes to social media engagement or productivity at work, learning goals are much more effective than a too much focus on performance.

Learning Goals Are More Superior to Performance Goals

If you are an entrepreneur or small business owner, instead of obsessing about performance goals, for example, page views or clicks on your website, try setting a learning goal. This might include asking your audience for their opinions, comments, and ideas on how you could make things better for them. This focus on learning from and listening to your audience is not only beneficial in generating new leads and acquiring new customers, but also helps you create long-term customer loyalty.

A large body of research shows that people are high-performing when they set learning goals instead of performance goals. For example, a learning goal “I want to learn how to network” is more superior to a performance goal “I want to grow my network by 20% this year”. Learning goals put more emphasis on the process (i.e., learning, personal growth and application of new ideas and strategies) while performance goals tend to focus too much on the end result (i.e., increase my sales by 10% this quarter).

While performance goals appear to be more effective, research has shown that it is learning goals that lead to high performance and long-term results. For example, Gary Latham co-author of New Directions in Goal-Setting Theory, found that MBA students who had specific learning goals (e.g., learn to network or learn to master specific course subject matter) “had higher GPAs and higher satisfaction with their MBA program than did people who simply set a performance goal for GPA at the end of the academic year.” Thus, having a learning orientation when building a business is more superior to a narrow focus on performance.

In another study in The Academy of Management Journal by authors Gerard H. Seijts, Gary P. Latham, Kevin Tasa and Brandon W. Latham titled Goal Setting and Goal Orientation: An Integration of Two Different Yet Related Literatures, MBAs given a goal of "learn six new strategies for increasing market share" had 42 percent higher market share than those given the goal to "increase market share to 21 percent".

I believe it's important for leaders and entrepreneurs to switch from a too much focus on performance goals and start learning from their audience. Products and services are pushed on consumers throughout their day, so if they do not like the way you do business, they will likely be able to easily find a replacement. This is why treating business development as a means to serve the customer and enhance their overall customer experience is vital to growing your business now and in the future.

Why Are Learning Goals More Superior to Performance Goals?

It really is about the mind-set. Performance (e.g., increase my market share by 5% this year) focuses on the end result, while learning (e.g., discover effective strategies to improve online customer engagement) focuses on ability and the process that leads to the end result. Research shows that learning oriented thinking produces more results (e.g., How can I give my audience more value every day? How do I improve this process to provide a more remarkable brand experience to my customers?). You cannot guarantee results, but what you can guarantee is learning and growing every day.

Also, because with learning goals your focus and your attention are away from the end result, your anxiety is reduced and your mind is free to focus on process, innovation, cooperation and the discovery of effective strategies to achieve results. This is more useful in our increasingly complex and fast-changing world.

More so, with learning goals you are less likely to abandon a task or project. Scott Button of Pennsylvania State University, who is the co-author of a 2002 research paper titled Goal Orientation in Organizational Research, found that people with a learning orientation were less likely to abandon a task than those who hold a stronger performance goal orientation.

High Performance is a Function of Learning and Growth

Your business, product or service is never perfect. There will always be something you can work on to improve the overall audience or customer experience. It is because of this reason that learning goals are superior. The problem is that many of our goals focus too much on performance and we miss out on the competitive edge that comes through a focus on learning and growing every day.

Gerard Seijts and Gary Latham authors of Learning goals or performance goals: Is it the journey or the destination? cite a story of PricewaterhouseCoopers (PWC) that shows that employees with a learning orientation in their jobs perform better than those with a performance-orientation. This is because real performance is a function of learning and growth.

At the end of the day, goal setting in itself doesn’t change anything. Goals do not guarantee success. Goal setting is only a tool. It is a vehicle. Setting goals does not mean you have succeeded. It only means that the learning and growth process has just begun.

If you are ready for more in business and in your life and want help building the joyful, passionate, and profitable business you deserve, book a free consultation call with me. I’ll help you get clear on who you really are as an entrepreneur, be more confident about your unique brand voice, and empower you to expand the quality of your presence and influence in the global marketplace. You’ll know how it feels to build your business differently and pursue the right goals. You’ll stop wasting your time on people who don’t value you or people you can’t make a difference to.