Why Systems and Habits are More Important than Goals

2020 is over

Reflecting over the last year and trying to focus on the positives, I am very grateful that I was able to work from home for most of the year (not in the office or out on business travel) so I could be there for my wife during her pregnancy and spend time with my newborn son who arrived in November.  My heart goes out to those of you who have been negatively impacted by COVID-19 over the last year.  I’m looking forward to when this virus is behind us and we can continue with the new normal. 

A new year brings new resolutions

It’s the time of the year where people set audacious goals to lose weight, save money, etc.  Unfortunately, a lot of people who set goals are unsuccessful in their pursuits.  A likely cause of this is that most people are too focused on the end-goal itself and aren’t giving enough thought to the habits and actions that it will take to get there!  

When thinking about your New Year Resolution, I encourage you to think beyond the goal itself – focus on the system that you can put in place that will allow you to achieve the goal.  To quote James Clear, “You do not rise to the level of your goals.  You fall to the level of your habits”.  Simply put, the goal itself is not enough to get you there, you need a system whereby you create habits that allow you to take action towards your goals.  Habits that involve taking action towards your goals are crucial to make progress towards those goals. Similarly, bad habits that prevent you from taking action towards your goals will definitely hamper progress.   Habits and individual actions can seem small on a day-to-day basis, however, they can compound over time to produce great results (or the opposite if we are talking about bad habits).   

Success is nothing more than a few simple disciplines, practiced every day; while failure is simply a few errors in judgment, repeated every day. It is the cumulative weight of our disciplines and our judgments that leads us to either fortune or failure.” ― Jim Rohn

The concept of smaller actions compounding into great results is called “the aggregation of marginal gains” and was popularized by Sir Dave Brailsford who turned around the British Cycling team.  The team went from having a single gold medal in its 76-year history to winning 7 out of 10 gold medals in track cycling in the 2008 Beijing and 2012 London Olympics.  He also led Britain’s first professional cycling team to win several Tour de France events (The more complete story here if you are interested: https://hbr.org/2015/10/how-1-performance-improvements-led-to-olympic-gold)

So what is my advice when thinking about your 2021 resolutions?
  1. Identity: Start with the kind of person you want to be (your identity) – not necessarily just in one year but several years down the line
    • It helps to visualize your future self and think in present tense like you are already there.  For example:
      • I am financially independent 
      • I spend plenty of time with my family and friends
      • I contribute to causes that are aligned with my values
      • I am healthy  
  2. Set SMART goals (explained below) that will serve as “stepping stones” to get to your final identity.  Some people say to scrap goals altogether, however, I am of the opinion that it makes sense to have some milestones / goalposts as you move towards your ultimate identity above.  Goals allow you the opportunity to celebrate small wins along the way.   
  3. Create daily habits and actions (i.e. a system) that align with your goals and your identity – this is the most important step.  Without daily habits and actions, you will never achieve your goals or identity.  Examples:
    • Side business: commit to working a minimum of 1 hour a day on my side business 
    • Health: run a calorie deficit every day (calories in < calories out) 
  4. Don’t spread yourself too thin: When setting goals, it is important that you keep the number of goals to a reasonable level.  Given each of your goals will be competing for your most valuable resource, your time, it is important that you focus on only the most important things you would like to accomplish. 
  5. Don’t just focus on your finances and your diet: In my post “Enjoy the Journey through a Balanced Approach“, I tried to emphasize that Health, Wealth, Love, and Happiness are all required for a fulfilled life.  People tend to overemphasize the “Health” and “Wealth” goals and forget about the “Love” and “Happiness” goals.
  6. Play the long game: Bill Gates once said “Most people overestimate what they can do in one year, and underestimate what they can do in ten years.”  Don’t be discouraged if you don’t accomplish as much as you expect in a single year.  Similar to compound interest, it takes a while to realize the full benefit of the aggregation of marginal gains.
What are SMART goals?
  • Specific
    • Bad – I want to reduce my debt
    • Good – I want to reduce the total balance on my credit cards by 50% by the end of 2021
  • Measurable
    • Bad – I want to save money
    • Good – I want to save 50% of my after-tax income in calendar year 2021
  • Achievable
    • Bad – Be the richest person on earth by the end of Q2 2021  
    • Good – Reach financial independence by 2030
  • Relevant
    • Bad – Goals that are not aligned with your identity 
    • Good – Goals that are aligned with your identity 
  • Time bound
    • Bad – I want to save 50% of my after-tax income 
    • Good – I want to save 50% of my after-tax income in calendar year 2021

I’ve designed my coaching program as a system that can be used to reach financial goals.  The system focuses on:

For more information, reach out to me at jonathan@jbfi.ca.