3 key mistakes to avoid in setting goals

Mexico's CF Monterrey goalkeeper Jonathan Orozco fails to save a penalty shootout by Japan's Kashiwa Reysol final taker Ryohei Hayashi, right, in their quarterfinal match of the FIFA Club World Cup soccer tournament in Toyota, central Japan, Sunday, Dec. 11, 2011. Kashiwa advanced to the semifinals after a 4-3 penalty shootout win. AP Photo/Shizuo Kambayashi

(MoneyWatch) If you set goals for yourself or for others as part of your job, it is imperative you don't make the goal-crushing mistakes discussed below. You already learned how positive fantasies hurt real-world success -- namely, that when you imagine the positive result too vividly, you experience some of the joy and become less energized to actually do the work. But that's just the beginning. Not all goals are created equally. According to research from Harvard Business School, you need to avoid these common errors in setting goals:

1. Goals that are too specific. One benefit of goal is that is focuses your attention. It forces you to focus all of your attention, resources, and energy on a single objective, rather than a range of disparate and even conflicting goal. That can be incredibly powerful. People without goals diffuse their energy across multiple objectives. But have them train their sights on something specific and you will begin to see results. That's the good news.

The bad news? Goals can be too specific. The biggest problem is when you set the wrong goal. You decide to lose 15 pounds. Seems reasonable, but it may be too focused on a specific number and distract from what you really want -- better health. Remember Enron? Their goal was laser-focused on hitting revenue targets -- so much so that bonuses and other incentives were pegged to sales, when a much better goal would have been to target profits.

Another side-effect of excessively targeted goals is that you can become blind to important, but seemingly unrelated, issues. A tragic example of this is the Ford Pinto, which had a tendency to explode in rear-end collisions. The automaker's goal was to bring the car to market, overriding safety concerns.

2. Too many goals. According to the Harvard report, "Individuals with multiple goals are prone to concentrate on only one goal." But which one? Research shows that when we have both quantity and quality goals, we will focus on meeting the quantity goals because they are easier to achieve and measure. The lesson here is to strip away as many of your goals as possible and focus more intensively on a smaller number of objectives.

3. Inappropriate time horizon. We see this play out every quarter in the stock market. For many companies, it's all about hitting this quarter's earnings, even if if that harms long-term growth. It's the kick-the-can approach to goal achievement. And if your time frame is off, your goals may act as a ceiling to performance.

Take an enduring question that the Harvard report addresses -- why it is so hard to get a taxi on a rainy day. Too much people looking for a cab, right? Yes, but there is more to it than that. Cab drivers typically set daily fare goals -- usually double the amount it costs them to rent their cabs for their shift. With rain comes more customers, so they hit their daily goal early and then go home early. In short, for cabbies the daily goal time-frame is not the most effective. If they set weekly or monthly targets, they could work longer hours when it rains and get off early on days when it is dryer (and slower).

What are your goals? Are they too focused? Do you have too many? Or do you have time limits that aren't realistic? Review each of your goals so you don't commit the mistakes above and to ensure your goals are designed for maximum success.

  • Robert Pagliarini On Twitter»

    Robert Pagliarini is obsessed with inspiring others to create and empowering them to live life to the fullest by radically changing the way they invest their time and energy. He is the founder of Richer Life, a community of passionate people who want to learn and achieve more in life and at work. He is a Certified Financial Planner and the president of Pacifica Wealth Advisors, a boutique wealth management firm serving sudden wealth recipients and affluent individuals. He has appeared as a financial expert on 20/20, Good Morning America, Dr. Phil, Dr. Drew's Lifechangers and many others.

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