This 60-Year-Old Theory Help You Get More Done
Tim Sykes here, filling in for Nilus.
Today I want to tell you about a dusty old theory that will change how you get things done.
The theory was actually the topic of my first Tedx Talk in Sydney, Australia.
It has to do with a specific approach to setting goals that will make you more likely to achieve them.
It all started with the pioneering research of Dr. Edwin Locke in the late 1960s. In 1968, he released the article, “Toward a Theory of Task Motivation and Incentives.”
Locke stated that employees are motivated by clear goals and appropriate feedback. Working toward a goal provided a major source of motivation to reach the goal – which, in turn, improves performance.
Locke’s research showed a relationship between how difficult and how specific a goal is and people’s performance of a task. Specific and difficult goals led to better task performance than vague or easy goals.
Telling someone to “try hard” or “do your best” is far less effective than specific instructions. “Try to get more than 80% correct” or “concentrate on beating your best time” are better.
Further, easy goals are not a motivating force. Hard goals are more motivating than easy goals, because it’s more of an accomplishment to achieve something that requires hard work.
Dr. Gary Latham was to expand on Locke’s work. Latham studied the effect of goal setting in the workplace…his findings supported Locke’s…and the inseparable link between goal setting and optimal workplace performance was formed.
Later, Locke and Latham went on to publish “A Theory of Goals Setting and Task Performance”. They reinforced the need to set specific and difficult goals, and outlined a few other characteristics of successful goal setting…which I will cover below with an eye toward goal-setting for traders.
Set Big, Specific Goals
Specific goals will help your career in many ways.
For one, they keep you motivated. As a trader, you should focus on things that really fire you up.
And aim big, not small!
Nobody’s ultimate dream is “pay off student loans”. That’s just a pit stop on the road to what you really want out of life.
So set big, lofty goals and the smaller stuff will often fall into place.
Let me be clear: While I am a big believer in setting big, specific goals, I also believe in breaking them down into bite-sized chunks.
For instance, if paying off debt is keeping you from getting ahead, getting out of debt should absolutely be a sub-goal on your way to realizing your much bigger goal.
Only when you set specific long-term goals will you be able to break down the steps necessary to reach them.
Evaluate Your Performance
As you work toward your goals and gain more experience as a trader, you can use your own past performance as a marker for your productivity moving forward.
Say you are successful in 6 out of 10 trades this month. Next month, try for 7 out of 10.
The idea here is to use your past performance to improve in the future. Make a game out of it…a challenge with yourself.
A mentor or peer can be very helpful here. It might be an informal thing, or it might be more scheduled: say, a five minute check-in on a weekly basis. If you know that you’ll have to discuss your progress toward your goals with someone on a frequent basis, it increases motivation and makes you more likely to stick to your goals.
One last bit of advice before I sign off: Make sure your goals remain inspiring.
Even as you evaluate your progress toward your goals, be sure to stay in touch with just how inspiring your goals are. Over time, priorities and desires can shift.
Maybe your original goal was a luxury car, but for whatever reason that no longer fires you up. Clearly, if you want to stay inspired, you need to change your goal.
Wealth was once my chief motivation, but now I am more focused on charity. Give yourself room to grow.
Goal-setting theory is hardly new, but it can improve your trading career. Not only does it give you something specific to work toward, it helps you maintain inspiration and motivation.
This is necessary for trading success!
for, The Rich Life Roadmap