By An-Chih Andrew Wang

Effort without a goal is like an expedition in the dark. At the start of each new year, setting realistic and practical plans for your team and yourself can help organise the work ahead. But, what makes for a good plan? And, how can we create plans which are practical?

Individuals should be honest with themselves, be realistic in goal-setting, and be self-motivated in order to convert those goals into achievements, whilst leaders should avoid setting unrealistic goals for their teams, and use KPIs and OKRs properly in team planning.

Be honest with yourself

Both study and work plans are essential, and there’s no better time to make plans at the beginning of a year. But planning is not simply a matter of ‘wishing’ – on the contrary, there is often a complex psychological logic behind a robust plan.

According to the self-discrepancy theory developed by American psychologist Edward Tory Higgins, there are three basic domains of the self: (a) the actual self (one’s representation of the attributes that someone – yourself or another – believes you actually possess); (b) the ideal self (one’s representation of the attributes that someone – oneself or another – would like you, ideally, to possess); and (c) the ought self (one’s representation of the attributes that someone – oneself or another – believes you should or ought to possess.

Both the ideal self (the representation of someone’s hopes, aspirations, or wishes for you) and the ought self (the representation of someone’s sense of your responsibilities, obligations, or morality) are the self that one wants to be – collectively known as self-guides or self-directive standards. However, there is always a discrepancy between a person’s actual self and his/her self-guides, which we refer to as self-discrepancy.

People experience different types of discrepancies between self-state representations that are related to different kinds of emotional vulnerabilities: A felt discrepancy between the actual self and an ideal can result in depression, disappointment, frustration, and embarrassment, while a significant discrepancy between the actual self and ought self can lead to anxiety or restlessness.

But what implications does the self-discrepancy theory have for annual planning?

When planning for a new year, people tend to focus on ideal and ought standards (i.e. “What does my boss expect from me? What should I accomplish in my current role?”) without enough considerations to the actual self. This gives rise to self-discrepancies.

Many goal-setting theories propose that realistic goals involve a reasonable level of self-discrepancies (i.e. discrepancies between people’s actual self-state and their self-guides). Therefore, it is advised that you set reasonably higher goals that your actual self can manage to achieve – but don’t aim too high. Only moderate self-discrepancies can translate into self-motivation that pushes you towards your goals.

Please note that excessive discrepancies can lead to depression or anxiety, neither of which are conducive to achieving your goals.

Setting your goals

Reasonable planning is an art. Aiming too high or too low, regardless of your day-to-day experiences and emotional states, won’t produce good results. One should take into account certain factors such as state of life, family life, and relaxation.

When it comes to goal setting, the actual self is as important as, if not more important than, the ideal/ought self. Your “ideal” goals will hold you back rather than help to motivate if the self-discrepancies therein induce negative emotions. In addition, you will be deluded into thinking that you can achieve any goals set for you in the end by working hard if you don’t have sufficient self-knowledge.

For example, students preparing for an exam often have trouble reviewing lessons as planned because they don’t have enough self-discipline to stick to their goals.

Educational psychologists believe that goal setting is by no means a simple calculation, because people are not perpetual motion machines. In order to devise a truly achievable plan, you will need to avoid over scheduling yourself and instead give yourself some time to relax.

Further research shows that when students realize they have less study time than others, they will value it more and make better use of their time. In contrast, when they feel they have more time than others, they appear to slack off a little bit in their studies, often going too far and setting themselves up for failure.

Implementing your plan

Plan implementation is more important than plan development. You will give yourself your best shot at success if you are self-motivated. Self-motivation is always better than other drivers, both internal and external.

Self-discrepancy theory suggests that self-motivation only occurs when the gap between one’s actual self and ideal or ought beliefs is within a manageable level.

Case in point: An athlete unqualified for an Olympic qualifying tournament sets himself a big stretch goal of winning a medal in the next Olympics. Although it is a very ideal plan, he will probably not be able to keep it up for long, because he will always suffer intensely from the discrepancy between his current state and the ideal goal of making it to the Olympic finals.

More often than not, reaching a goal can increase your intrinsic motivation, which in turn can spur you to go on. If you want to be a self-motivated person, your first priority should be to avoid taking too big a step and setting goals that fall too far short of yourself. Moreover, if you are plunged into negative feelings when moving towards your goal, you will need to stop immediately.

Leaders should avoid setting unrealistic goals

While goals are often the most important part of an individual plan, budget, incentives, and results are crucial in a team plan. To contribute to team planning, individuals should follow two steps:

First, individual team members should think about what their ought self is supposed to do, what their ideal self is looking to achieve, and reflect on their actual self. In doing so, individuals will better understand which goals are doable.

Second, individuals should think further about the resources needed to achieve their goals, as well as the due rewards of accomplishing those goals.

In reality, leaders often rush into creating a team plan for the year by identifying overarching objectives and breaking these down into specific goals and tasks, irrespective of team members’ self-concepts and self-guides.

This creates a strange phenomenon in the workplace: The boss and employees take on a bet, where there is always someone willing to give it a shot as long as the rewards are attractive enough.

The truth, however, is that if employees believe that there is a huge discrepancy between goals and reality, they will suffer from negative emotions and be unable to achieve the goals due to a lack of motivation.

Worse still, employees may attempt to deceive when the rewards are tempting and resources are adequate.

Therefore, leaders should first understand the three selfs before setting goals from personal and team/departmental perspectives, and decide how much budget is needed and what incentives to offer.

In addition, team planning should be closely related with a company’s mission, vision, and values. Businesses that set out the mission of “seizing a market share of X% in five years” are not creating actual value. If business owners focus on such things, employees will be unlikely to face up to their actual self.

Team planning is in some sense the process of identifying the ideal state and the ought state of the business. Business owners or leaders should be realistic, and ensure that the discrepancy between the current and the ideal/ought state of their business is acceptable.

Unachievable goals outlined in team plans can have a devastating impact on teams. Since goals are pie-in-the-sky, leaders will have to aim lower to get further. However, team members won’t be fooled into thinking they have fulfilled the predetermined plan.

This brings us to another question: When other people set a certain goal, do I have to follow suit? And, if I don’t keep up, does it mean that I’m not good enough? In fact, this feeling of being not good enough is related to self-awareness. The clearer you understand yourself, your team or business, the less you will be influenced by comparing yourself to others.

How can we use KPIs/OKRs for planning?

For employees, KPIs (Key Performance Indicators) and OKRs (Objectives and Key Results) are the most frequent buzzwords at the end or beginning of a year. As a goal-setting technique, OKRs/KPIs are meant to push employees forward. In practice, people mistakenly believe that performance-based salaries and bonuses are given out for meeting or exceeding KPIs/OKRs. They are so anxious to reap rewards that they may pay “excessive” attention to goal completion, rather than the original intentions behind their work.

It is quite common that service firms design their staff appraisal systems around service quality, and measure their service staffs’ performance in terms of customer satisfaction scores. Consequently, some staff may prompt customers to give them full marks via text messages or telephone surveys following delivery of the service (and many customers are happy to do them this favour). In this case, the significance of customer satisfaction ratings is lost.

It would be better for employees to be honest when customers are dissatisfied, and companies and leaders should encourage employees to respond positively. This can improve customer satisfaction in the true sense of the word when situations are remedied in the moment. The core of any service-oriented firm lies in improving customer satisfaction rather than focusing on satisfaction/dissatisfaction rates.

All in all, after a company sets its goals, it should constantly review and reflect on them to ensure the goals are aligned with its mission, vision, and values.

A “healthy” company should be able to develop personalised growth plans for employees and employees should not be afraid to expose, rather than cover up, their shortcomings or failures to achieve the desired goals.

Tips for planning

▶ Individuals

•   Accept your actual self and be objectively self-aware;

•   Set manageable goals that involve an acceptable level of self-discrepancies;

•   Allow for leisure and relaxation in your planning;

•   Stay self-motivated and take steps to achieve your goals.

▶ Teams

•  Leaders should abandon unrealistic goals when developing team plans;

•  Goals set out in team plans should take into account the company’s mission, vision, and values;

•  Set different goals for different team members to ease peer pressure and eliminate internal friction;

•  Make performance-based salaries and bonuses less relevant to KPIs/OKRs.

Andrew An-Chih Wang is Associate Professor of Management, and Programme Co-Director of the Leadership Development Programme at CEIBS. For more on his teaching and research interests, please visit his faculty profile here.