Better decisions result in more success. Better decisions help with better solutions to problems, improvements in performance, and the ability to achieve the goals you set.
A common goal is to become wealthy, to be a millionaire or to earn $200,000 a year. I want to tell you why you should avoid this trap based on two reasons:
Driven by Performance
Money is an outcome measure, not a performance measure. If you love to bake, then some performance measures are the number and quality of the loaves of bread you produce. By focusing on performance you are motivated to tweak your process, improve your ingredients and find ways to supply your delicious bread to hungry consumers. Performance measures are action-oriented.
If you charge money for your delicious bread, then one outcome of your performance will be the money you receive. This outcome measure can be helpful, it can be used to benchmark if your bread is more or less delicious than the bakery next door. Regardless, the outcome does not drive performance but rather is a lagging indicator of relative success. I say relative, because it is only a comparison to other bakers.
Static vs. Dynamic Measurements
When you set a goal to lose 20 lbs. that outcome is static. There will never be a time when a pound of oranges ceases to be a pound of oranges. If you bake bread, a 20 lb. bag of flour will forever remain a fixed measure. On the other hand, money is not fixed but dynamic.
If you set a goal to earn $1,000,000 this outcome is constantly fluctuating. Each day the value of currencies rise and fall. Sometimes currencies crash or are devalued. If you are baking bread and the price of grain skyrockets it is a factor out of your control, yet it impacts your goal, right?
While an admittedly extreme example, in 1922 a loaf of bread in Germany cost 163 marks. By November of 1923 that same loaf cost 200 billion marks! Just think about anyone living in Germany who set a goal in 1921 to earn 200 million marks within two years. How would it feel to achieve your goal and not be able to afford a loaf of bread?
The Bottom Line
I recommend you never set money as a goal. Instead, focus on your performance and results will come. Try to use fixed outcomes, not outcomes that will fluctuate. I’m not saying that money as an outcome measure has no value, just be careful not to fall into the money trap.
Each of us hold a number of different beliefs about the world in which we live. Some are minor beliefs, but others can have a profound influence on success. For instance, to what degree do you believe in destiny, fate, or luck? People that hold a strong belief that control is external will have less personal success than people that believe they are in charge of their own destiny.
Beliefs influence our motivation which then shapes our behaviors. One reason behavioral analysis has struggled is the difficulty in tracing an observed behavior to a single root cause. Two people may commit a similar crime (theft), but hold radically different self-beliefs that led to different motivations for the commission of the theft.
As the number one enemy of success, there is some good and bad news. The good news is that self-beliefs are adaptive, your beliefs can evolve over time. The bad news is self-beliefs are stubborn and modifying one's beliefs is not a clearly defined linear process.
The stubborn nature of our beliefs results in behaviors that are highly adaptive in one environment, but maladaptive in another. Consider a child raised in a large family, developing a strong collectivist belief verses a belief in individualism. As the child leaves the family environment to enter the workforce he or she will most likely find it more difficult to find success in certain industries where a collectivist belief is often maladaptive, e.g. a stock trader or car sales.
The bottom line, the beliefs we hold are a powerful key that can drive or inhibit success. The main challenge is that we most often do not even realize how our beliefs and environment interact to influence our motivations and corresponding behaviors.
If you want to know how you can combat this enemy there are various techniques that revolve around the larger concept of "self-regulation". It is through self-regulation that both the symptoms and causes of maladaptive behaviors can be addressed.
I have included a link to a 1991 article published by Dr. Albert Bandura, arguably the leading expert on self-regulation, and a link to Dr. Hoffman's work which is more current, published in 2015.
Note: This article was initially a response to the question, "What is the Biggest Enemy of Success?" on Quora.com.
Okay, okay, I know my title is a really bad Meghan Trainor reference, but when it comes to making better decisions, using base rates can help you stay out of trouble. From what you pay for insurance to deciding whether or not to start a business, base rates are key to reducing your risks and maximizing results. That said, there is plenty of scientific evidence from psychological studies that demonstrates people tend to ignore base rates. This tendency is a well-established cognitive bias known as "base rate neglect" or the "base rate fallacy". In this article I explain base rate neglect, why base rates are ignored and how you can harness this bias to help you make better decisions.
Explaining base rate neglect.
For a real life example, take the $50 opportunity currently offered by insurance giant AIG to provide you “FlightGuard” coverage that guarantees a $500,000 payout to your beneficiary in the event your flight crashes and you die. This means every 10,000 flights without loss of life AIG will make a profit.
Now using the base rate we can calculate the extent to which $50 for $500k in coverage is a fair offer. The actual odds that you will die in a plane crash are approximately 1 in 11 million. Based on this base rate, over time AIG is making slightly more than 1,000 times the money they will pay out. Indisputably this is a horrific deal for the consumer. In fact, it is such a bad deal that you would be much better off taking that same $50 and buying fifty lottery tickets in the “Texas Lotto”. The minimum you can win in the lotto is $4 million, 8x the insurance payout. And your odds of winning with 50 tickets are roughly 1 in 500,000 or 22x higher than the odds of dying in a plane crash. Now I’m not saying playing the lottery is a great deal either, but using the base rate I can definitely tell you it is a deal approximately 175x better than buying “FlightGuard” insurance from AIG.
Why then do people ignore base rates?
This question has been of great interest to psychologists for quite some time and there are a number of theories that revolve around different forms of cognitive bias. Reduced to practical reasons, people ignore base rates due to:
Using base rates to your benefit.
Given base rates are often ignored, the same as insurance companies or casinos, you too can profit. You can use base rates to make better decisions, but using a different strategy. Almost every company across a diverse range of industries such as medical, insurance, entertainment and technology use base rates to target millions of consumers who make small, seemingly insignificant decisions. These individual decisions collectively add up to billions in profits, a “nickel and dime” strategy.
Your strategy to profit from base rates must be different, basically the opposite of the “nickel and dime” strategy. Instead of targeting relatively insignificant decisions, you will benefit by looking at those major, tough decisions in life where making a mistake may have significant consequences. You need to factor in base rates when making a major purchase like buying a house or car, when deciding to open a business or pursue a specific degree, or more importantly when determining if a risky medical procedure is your best option.
Using a risky medical procedure, say heart surgery, let's go through a quick example. Thanks to the Internet there is now a wealth of base rate information only a few clicks away. You can find out what are the base rate odds of surviving the heart procedure, but don’t stop there. You can then begin to adjust from this base by factoring in the base rate performance of specific hospitals and/or specific doctors. In addition, you can find out base rates of post surgery rehabilitation and life expectancies. Using this base rate information can help you make a more informed decision, give you a better chance of surviving the procedure and know what to expect after the procedure is over.
In summary, one way to avoid trouble and make better decisions is recognizing that it's all about that base rate. When faced with a tough decision, taking into account the possibility of base rate neglect can improve your chances of success. And if you don’t happen to know Meghan Trainor or the song, then click here to see my shameful attempt at humor.
About the Author:
Richard Feenstra is an educational psychologist who adamantly denies the existence of a video of him singing "All About That Base".
This is the final article in the series on how you can get the most out of using SMART goals. My previous articles discussed establishing goals that are Specific, Measurable, Actionable, and Relevant. Now I want to discuss the final concept, Time Bound. In the article I cover why it is important to include things such as action feedback loops, incentives for process, and the need to account for the psychological principle of the planning fallacy.
Action Feedback Loops
A common issue I see when using SMART is failing to harness the time driven power of action feedback loops. If you want to stay motivated and on track, structuring your goals to provide feedback at the correct frequency, i.e. the correct time, is critical to success. Scientific research using both rats and humans has shown that we prefer smaller rewards more frequently than a larger reward that is delayed. Applied to goal setting, this means you want to ensure to establish intermediate time frames to provide the right frequency of feedback and help keep you on the right track in pursuit of a longer-term objective.
As an example, take the specific goal to lose 10 pounds in 10 weeks. Do you weigh yourself once and then 10 weeks later weigh yourself again? Or do you weigh yourself twice a day or once a week? Feedback spread too far apart is unlikely to keep you motivated and feedback that is too frequent is not very useful, efficient or actionable.
Establishing the correct frequency that works for you is important. You want the frequency to be often enough to give you useful information that is actionable. If you step on the scale once every two weeks, this will provide you actionable feedback about the extent to which your process is working.
Speaking of Process and Rewards
When you set up feedback based on time, it is not simply to decide “yes” or “no”, did you achieve your milestone or goal. Instead, time is a trigger to evaluate and adjust your process as needed. If after two weeks you have not lost any weight then maybe your process of going to the gym two days a week and eating less than 2,000 calories is not working. This evaluation based on the feedback loop you created allows you to adjust the process and try again. Maybe you need to go to the gym three days a week, try to cut back to 1800 calories a day or maybe you need a new action plan all together. After adjusting your process give it another two weeks and then evaluate again. Over time the adjustments will help you zero in on the process that works for you.
Now this may sound a bit odd in a results oriented world, but I personally reward myself for process more so than outcomes. This does not mean I ignore outcomes, but that I choose to focus my recognition on process, because process is what drives results and that is where I want my motivation to originate, from an intrinsic desire to continuously improve my process. If two days a week at the gym and eating under 2,000 calories a day did not result in achieving my milestone of losing two pounds, my first question is did I follow my process? If the answer is yes, then while I may not be excited about the results I do not consider it a failure, rather a lesson in what doesn’t work. If on the other hand I failed to follow the process, then it is another issue all together and a topic for a different article.
The Planning Fallacy
Another aspect of Time bound, is learning to account for the well-established psychological principle called, the “Planning Fallacy”. Not understanding this principle can help set you up to fail, at least it will feel like failure when after 10 weeks you have not lost all the weight you had expected to lose. On the other hand, if you understand the planning fallacy you can take the results not so much as failure, rather as valuable information that you can use moving forward to make a more accurate estimate in the future.
The planning fallacy was initially published by psychologists Daniel Kahneman and Amos Tversky in nineteen seventy-nine. What they discovered was the tendency for individuals to underestimate the amount of time and resources it will take to achieve their goals.
In one study, college students were asked how long it would take them to finish a term paper. The average estimate was thirty-four days. They were also asked to provide an estimate if everything went horribly wrong as well as if everything went smoothly. The smooth scenario, where the grass is green and the skies are blue, resulted in an average of twenty-seven and a half days while the worst-case scenario, where a dog ate your homework; the average estimate was forty-eight and a half days. The interesting thing is that the average actual completion time was fifty-five and a half days, well above even the worst-case scenario.
With further studies they found that whether it is an individual prediction or a team effort, the planning fallacy results in project overruns and missed deadlines. A well-known example is the Sydney Opera house, initially scheduled to open in 1963. It took ten years longer than estimated, opening a scaled-down version for roughly 15x the original estimated costs. How could those involved in the project been so bad at planning?
Why You Can’t Plan
There are a number of theories as to the psychological reasons we are so bad at estimating into the future. One of the more popular theories is that when we recall our past performance, any delays we experienced, we tend to attribute those delays to external factors that were beyond our control, while discounting any factors related to our personal performance.
Another theory is that when making future predictions, it is difficult to estimate the cumulative factor of small, individual distractions and mishaps that will occur, such as an unexpected phone call. Instead, we only look at the major elements we believe we can control and build future predictions based on this ideal scenario.
So what can you do to deal with the planning fallacy?
The number one way technique is to make sure that you anchor any future predictions based on your actual past performance. This means to avoid substantially altering predictions without having a very good reason to expect different results. It does not mean to ignore projected changes or benefits of a new idea, method or process, but just to make sure that any predictions of improvement or growth are firmly rooted on the foundation of your past results.
The Bottom Line
When it comes to establishing SMART goals, you want to harness the power of time by making sure that your goals are Time Bound. This means making sure that you consider things such as;
To put it all together, the SMART format is a structured method to goal setting that provides an evidence-based approach to achieving your goals. While it is not the panacea for all of the challenges we face in life, if you have read all of the articles, it is another tool that you can now place on your metaphorical tool belt. You now have the means to use SMART as a way to establish and monitor goals that are specific, measurable, actionable, relevant and time bound.
If you have not read the other articles, you can use the following links:
If you have any questions or suggestions, please contact me at email@example.com.
About the Author:
Richard Feenstra is one of the unfortunate individuals in life, cursed with getting just slightly better looking each day. By the time he is in his 90's he will be an international heart throb. During the meantime, Richard enjoys sharing what he has learned over the years about the art and science of decision-making.
(Keywords: cognitive dissonance, Maslow's hierarchy of needs, goal setting, scaffolding, cognitive bias, judgment, bounded rationality, SMART goals, motivation, self-regulation, goal achievement.)
My last three articles have addressed SMART goals and structuring your goals to be Specific, Measurable and Actionable. In this article I am going to discuss the next aspect of SMART, which is to ensure that your goals are Relevant. I will explain why it is important and provide two techniques that you can use to make sure that at any given point in time you are pursuing those goals most relevant to your success.
Most versions of SMART do not use relevant. In my opinion those versions neglect two key aspects of goal setting, (1) that we all have more goals than the time we have available and (2) that goals are not strictly independent of one another. Versions of SMART that do not use relevant are silent on these issues, providing no guidance on how to evaluate multiple goals. Therefore, to get the most out of goal setting and improve your chances of success, you not only want to make sure your goals are aligned with your vision and your values, but you want to maximize your time and resources to pursue only those goals most relevant to your long-term success.
Value and Effort
One way to evaluate multiple goals is to place each goal relative to one another on a matrix that looks at perceived value verses effort. When you look across goals, you want to focus your resources pursuing those goals most relevant to your vision that are low effort and high value.
To reinforce, the use of the matrix is a relative process. Hopefully any goal you are looking to achieve has a degree of challenge that will involve substantial effort. The method then, when ranking effort, is simply a comparison between competing goals.
For instance, I have a goal to publish a book. Should I write a work of fiction that tells a story of an evil mastermind and his plans to conquer the world or should I write a book that explains 7 key psychological principles that you can use to harness the power of the human mind? Both would be a challenge to write, both will take significant effort, but given my values and my background as an educational psychologist, the book about the human mind will take less effort and have a higher value than the work of fiction.
The Pareto Principle
A second method for determining which goals are most relevant is to use the Pareto principle, also known as the eighty twenty rule. This takes all goals that are under consideration and asks which are the 20% of your goals that will provide 80% of your results. It is this top 20% that are the goals most relevant to your success. This does not mean to discard the remaining goals, simply to hold them in reserve as you pursue your most relevant goals. Periodically, as you accomplish a goal or new ideas present themselves you will want to revisit the Pareto Principle, dusting off old ideas to determine what to pursue next.
And an additional use of the Pareto principle is to help manage your resources in pursuit of those most relevant goals. One option is to commit all of your time and energy to the 20% of your goals that are most relevant. However, another option provides a bit more flexibility, committing 80% of your time to the most relevant goals and 20% of your time to goals not necessarily aligned with your vision. The benefit of this arrangement is that it helps focus the majority of resources on the most relevant goals, yet leaves some room to experiment with new ideas. Maybe I can write my book about an evil mastermind after all, it may just take me a lot longer to complete.
The Bottom Line
If you are anything like me then your to-do-list expands as you pursue multiple goals in life. You have more ideas than hours in the day. But, every idea is not created equal so you need a mechanism to evaluate your ideas and establish those goals most relevant to your success. Two techniques to evaluate multiple goals are:
-1- Use the Value/Effort Matrix: this will compare your goals along two criteria to help ensure you are focused on low effort, high value goals.
-2- The Pareto Principle: this lists all your goals and then you select the 20% of goals that will give you 80% of your results.
In my next article I will be discussing the last aspect of SMART goals, the importance of ensuring that your goals are Time bound.
About the Author
Richard Feenstra is an educational psychologist who at the age of only seventeen became an expert in throwing hand grenades. Richard enjoys sharing the psychology of decision-making with a vision to help transform the world, one decision at a time. This includes writing about scaffolding, cognitive dissonance, cognitive bias or other keywords he wanted to list here in a feeble attempt to influence search engines.
My last two articles discussed when you want your goals to be Specific and ways to ensure that goals are Measurable. In this article I am going to discuss the third concept in using the acronym SMART, making your goals Actionable. An alternate version of SMART uses the term achievable instead of actionable, but for reasons I will talk about next, I personally find actionable to be more useful.
I would be remiss to say that it is not good to at least consider the extent to which a goal is achievable. Research has shown that when it comes to goal setting, the most successful individuals are those more capable of accurately making self-assessments of their capabilities and resources available. Those individuals that fail to accurately gauge their abilities or resources are more likely to fail. This may make it seem then, that success is dependent upon setting goals that are achievable.
However, there is also research on motivation that supports what Henry Ford was known to have said, “Whether you think you can, or you think you can’t—you’re right.” As it turns out, your individual beliefs regarding if you can or cannot achieve a goal has a significant impact on success, including if you are motivated to even begin working towards a goal in the first place. Individuals with beliefs that support high levels of success set stretch goals, goals that are challenging without the guarantee of achievement.
Consider the laundry list of ludicrous, unachievable goals people at one point in time dared attempt. There was circumnavigating the earth in a wooden ship, running a mile in under 4 minutes, landing a man on the moon, me being chosen male model of the year, transplanting a human heart, cloning a sheep and the list continues. With recent advancements in technology it seems like the pace at which the once unachievable is being achieved is accelerating at an unprecedented rate. Maybe I am just watching too many YouTube videos.
I admit my personal bias here. It is because of my firm belief in mankind’s ability to achieve the unachievable that I prefer using the term Actionable when structuring my SMART goals. It is within the context of what is actionable that I endeavor to use my decision making skills to accurately assess my abilities and the resources I have available.
“Shoot for the moon. Even if you miss, you'll land among the stars.”
- Norman Vincent Peale
Instead of achievable, focus on what is actionable, what is your plan for success? For simple or short-term goals it may not take much effort to quickly write down the exact actions required. On the other hand, for complex or long-term goals the plan for success will most likely be more dynamic. Larger goals most often will require breaking them down into smaller sub-goals or establishing milestones.
Personally, for my action plans I use Microsoft OneNote, but there are plenty of comparable options on the market you can choose from. The reason I prefer OneNote is because of the flexibility to create a custom format that works for you. In my case, being able to insert links and set up tasks as deep as I like are important features.
The degree of detail you want in your action plan will vary. While creating a comprehensive action plan might seem ideal, regardless of the type of goal, when it comes to dynamic or long-term goals, you want to focus most of your effort on near term actions and leave the rest for later. The main reason for this approach is because by definition, dynamic goals ebb and flow, so you are better off not wasting time getting too specific with milestones that are distant.
For instance, in my goal to conquer the world my energy is spent developing detail for my first two milestones, leaving the last two as general concepts. Until I have the hidden island, it is only important to know the island needs to be big enough to accommodate a laser. If then something goes wrong with my island plan and I have to switch to a luxury submarine, I benefit from having maintained efficiency and flexibility in the face of a dynamic environment.
The Bottom Line
Without action a goal is just a dream, therefore when structuring your SMART goals make sure the goal is actionable. To accomplish this, take the end goal and then set intermediate steps or milestones you need to accomplish along the way. After you have determined your milestones, focus on establishing next actions, those actions that will get you to the first milestone. As you progress, the actions you take will provide feedback that you can then use to adjust your plan.
If you missed my articles on Specific and Measurable, follow the links. If you want to be notified next week, be sure to sign up for my free newsletter.
About the Author
Richard Feenstra is an educational psychologist and world renowned thumb wrestler. His focus is on judgment and decision making, including topics like cognitive dissonance and confirmation bias. He admires the work of Daniel Kahneman and highly recommends the book "Thinking Fast and Slow". Now that he has talked about himself in the third person and added some nice keywords for search engines, he hopes you enjoyed this blog and sends his best to friends, family, and his readers in their efforts to conquer the world.
In my last article I discussed the SMART format for setting goals and the research behind Specific goals. In this article I want to discuss the next step, how you can ensure Measurable goals to achieve better results. This is arguably my favorite part of goal setting and an area where I think it is easy to get off track by establishing measurements that are less than helpful. In fact, I think in our digital world getting off track is easier than any other time in history.
The most common error I see is establishing measurements that track results, but not performance. I think in order to obtain the best results you should try to use both. The second most common error is allowing the way you decide to measure to drive your goal instead of the goal driving the way you measure. Last, I want to cover the concept of triangulation, discussing when and why you might want to use multiple measurements.
Outcomes vs. Performance
A simple example is the common goal to lose a specific amount of weight as part of a resolution to live a healthy life. For purposes of the example let's say you determine that you could stand to lose 10 pounds. This provides you a result or outcome that you want to achieve and you can easily monitor how your goal is progressing by using a scale to weigh yourself periodically. Still, establishing this measurement does nothing to help you as it relates to actual performance.
A performance measure on the other hand is a particular action you can take that is measurable, and that you have reason to believe will help you achieve results. In trying to lose weight common methods include diet, exercise or taking a supplement. For diet you can track the number of calories you eat each day and for exercise you can track the number of calories burned or the total distance you walk or run. The supplement is a matter of tracking the frequency. These are all actions you can take that are based on some task you need to perform. From these measures or variables you can begin to tie your performance to results. As the general wisdom goes, performance drives results.
Measuring What You Manage
Speaking of general wisdom, management expert Edward Deming is known for his statement, "What gets measured gets managed." If you set a performance measure to eat less than 2,000 calories a day then it is this aspect of the goal to lose weight that will get managed. And management requires resources, including time and energy. Given we all have a finite amount of resources available, a sneaky trap you want to avoid is allowing a method of measurement to dictate what you will manage.
Sticking with the fitness theme, a growing trend is wearable technology that helps measure all sorts of neat statistics. Fitbit is a popular brand of wearable tech, providing a wireless wristband to help track things like heart rate and even the number of flights of stairs you walk up each day. Because of these measurements, it is tempting to fall into the trap of searching for stairs you can climb or trying to develop a fitness routine to use the heart rate monitor. If you are not careful the measurement tool begins to drive what you are managing instead of the other way around.
An example that is also a growing trend is the use of analytics in business. I love analytics. I think it is fun to check my websites and see people from all over the world visiting. I can see how long they have stayed on the site, what type of the device they used to connect and sometimes I even get data on age and gender. There are hundreds of analytics available from which I can choose and a mountain of data at my fingertips.
It is this mountain of data that becomes the double-edged sword. You want data to help make informed decisions, but you also need to avoid letting analytics be the measure that drives your goals. Instead, you first want to use the data to inform and help establish your goals and only then select the analytics that are the correct measurement tools for the job. It is a subtle, but important difference between measuring what you manage verses managing what you measure.
Another key to measuring a goal is knowing when and why you should use more than one measurement to gauge success. We have already discussed the need to use both performance and outcome measures, but there is another concept called triangulation. The idea behind triangulation is that like the three sides of a triangle, to use three measurements to help verify and validate outcomes.
Eating less than 2,000 calories a day is performance based, the expected outcome is a loss of weight. What happens then, if after two weeks no weight has been lost? Having the single measurement weight, it would appear no progress is being made. However, if you also were measuring inches around your waist and body fat percentage, the three measurements taken together may tell a different story.
For goals that are short term, simple or low impact the added effort to manage multiple measurements is probably not worth the resources. But, for goals that are long term, complex or of high consequence, using triangulation is something to consider. For the best results, I recommend using three types of data that include both quantitative and qualitative forms of measurement.
The Bottom Line
A critical part of establishing a goal is to know how you plan to measure success. For better results consider:
-1- Make sure to use both performance and outcome measures.
-2- Measure what you manage, not the other way around. First establish your goals, then select the correct measurement for the job.
-3- For goals that are complex or high consequence and long term, consider using triangulation. Select multiple measurements to validate results and keep you on the right track.
To view the initial blog post on "When Setting Specific Goals is a Bad Thing", click here.
About the author:
Richard Feenstra is a decision researcher, studying and sharing how we make better decisions. He holds a Ph.D. in educational psychology and an M.S. in workforce development. His work experience includes military service, law enforcement, fire prevention and workplace safety. Richard is an international speaker and a recognized expert witness regarding issues of safety and security.
Richard teaches a number of online courses, check out his instructor profile.
A little over a year ago I put up a 5 minute video on my YouTube channel that provided a brief overview on how to use a version of SMART goals to better structure your goals for success. The positive response has been terrific, so after receiving multiple requests to expand on the topic, I decided to write a five part series, starting with discussing the research behind when and why goals need to be specific, including when setting specific goals is a bad idea.
If you are not familiar with SMART, it is an acronym you can use to help structure your goals to make sure they are Specific, Measurable, Actionable, Relevant, and Time Bound. There are other variations of the SMART format with the 'A' standing for achievable or the 'R' for realistic, but for reasons I will explain later, I find actionable and relevant more useful. (original video)
Like most people I enjoy a tasty scoop of ice cream, especially Oreo blizzards, but what few people realize is how dangerous a treat ice cream has become. First there is the issue of obesity, second there are higher crime rates, third there is the loss of life due to a rise in the number of drowning deaths, and finally, as more ice cream is sold there is an increase in forest fires. Given these indisputable facts, I need you to support my vision of an ice cream free world.
While banning ice cream trucks from entering your neighborhood may sound far-fetched, when it comes to problem solving, the above paragraph describes a common issue of misunderstanding the difference between correlation and causation. This misunderstanding can influence our decisions, sometimes with serious consequences that ripple throughout a community.
When two things are related, but one does not cause the other then it is correlation, not causation. Usually this means the two are in some way related to a third factor, but not always. If you have a big enough pile of data, you will even find relationships that are purely coincidence, like the strong relationship between the sale of margarine and divorce in the state of Maine.
With the sale of ice cream a third factor is weather. When it is hot outside people buy more ice cream, they are more likely to go for a swim, and there is a general increase in people out and about enjoying the weather, helping improve conditions for crime to take place as well as the dry conditions associated with forest fires. When everyone is snowed in, the trees and grass are wet and it is time for a marathon session of Netflix. To my knowledge no one has yet drowned while watching Netflix, but I guess technically it could happen.
A note of caution, there is a growing trend in the digital world called “data dredging”. This is using analytics to sift through mountains of data hoping to find useful relationships. Instead of a problem in search of a solution, dredging data is a solution looking to identify a problem. This does not mean correlations are without value. In fact, correlation is a vital part of helping us move to the next step, the discovery of causation.
Unlike correlation, to claim one thing actually causes another thing to happen means you need to be able to demonstrate an actual cause and effect relationship, preferably a strong relationship. Arguably the gold standard of cause and effect is physics, but for an example I will use the pharmaceutical industry.
To make the claim that a particular drug causes a certain effect, such as lowering your cholesterol or growing hair, the FDA requires that pharmaceutical companies support those claims, putting the drug through a rigorous, four phase, twelve step process that takes roughly 12 years. The process is strictly regulated using control groups and clinical trials to test the drug, making sure that X causes Y and that the drug is safe (relatively speaking). The acceptable error rate can go as high as 5% for some drugs. This means that the clinical trials prove that there is a 95% chance the drug does actually cause hair to grow. Other drugs are held to an even stricter standard, requiring proof up to 99% effectiveness.
Back to ice cream. What about ice cream and obesity? While it may seem like common sense that eating ice cream causes weight gain, the fact is that we don’t yet know the true strength of the relationship. If we look at the sale of ice cream, there is actually an inverse relationship with weight. People gain weight in the winter when sales are low and lose weight in the warm summer months when more ice cream is being consumed. While this suggests ice cream might be the new diet food, knowing about correlation you can avoid drawing a causal conclusion.
Instead, recent research on the subject has been looking at different types of sugars used in making a wide range of sweet foods we tend to enjoy. What scientists have discovered is that the hypothalamus, which is an area of the brain that regulates appetite, reacts differently when we consume foods with fructose instead of glucose. This has researchers speculating that eating high fructose foods, such as ice cream, may result in people not feeling full, so they continue to eat. This theory proves difficult however when we start considering apples and other natural fruits also contain fructose, not just ice cream and chocolate cake.
As you can see, causation is difficult to prove, especially the more variables that are involved. No wonder it takes 12 years just to prove a pill causes hair to grow.
The Bottom Line
Personally, I do suspect that researchers are onto something with this whole fructose thing, but this article is not really about discussing the relationship between ice cream and forest fires or obesity. Instead, I want to reinforce the major difference between correlation and causation. When it comes to your ability to be a better problem solver, understanding this difference is critical.
In the real world, away from laboratories and clinical trials, on the news, in boardrooms and coffee shops, everywhere you go, you will hear claims that X causes Y. From politics to the weather, from the stock market to personal relationships it is human nature to try and explain things, to create stories that make sense. As you hear these stories or as you create the story, try to keep in mind one thing, that correlation is not causation.
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Stanovich, K. E. (2012). How to Think Straight About Psychology (10th Edition) (10 ed.). Pearson.
Vigen, T. (2015). Spurious Correlations. Hachette Books.
About the author:
Richard Feenstra is an educational psychologist with a focus on innovation, problem solving and productivity. His work experience includes military service, law enforcement, fire prevention and workplace safety. Richard is also a recognized expert witness regarding issues of safety and security. Richard holds an M.S. in workforce development and a Ph.D. in learning and technology.
Temptation can be tough. Whether tempted to eat an extra piece of chocolate or go ahead and take a little out of savings, we could all use a little help, and that is exactly what researchers Dilip Soman and Amar Cheema explored. In two experiments, one providing scrumptious chocolate and a second financial advice, Soman and Cheema found that if you partition a resource, it makes a significant difference. This “partitioning effect”, causes you to make an extra decision that normally you would not need to make and this can be enough to help conquer temptation.
In the first experiment they provided participants 6 pieces of Godiva chocolate to be eaten over a period of one week. Those participating were only informed that the experiment was a taste test and that in one week they were to turn in their surveys. Half of the participants were provided a box with the pieces inside unwrapped (aggregated). The other half received boxes with each piece individually wrapped in foil (partitioned). This small difference had a dramatic effect. Within the first two days, 82% of those in the unwrapped condition had gobbled up all their tasty treats, while only 45% had finished in the individually wrapped condition. Almost twice as much chocolate consumed in two days!
In a second experiment, 146 workers in rural India agreed to participate in a study in exchange for free financial advice. At the time of the experiment the workers were paid 670 rupees (US$15.50) every Saturday and the average saved each week was .75% or roughly 5 rupees. Financial planners set a target goal for families to save either 40 or 80 rupees per week. Participants were separated into several groups, and within these groups over the next 14 weeks savings would be placed in either a single envelope (non-partitioned) or in two different envelopes (partitioned). While in both conditions savings rose dramatically, when two envelopes were used families saved 48% more (377 rupees vs. 230 rupees over the duration of the experiment).
The next time you find yourself struggling with motivation, take some time to reflect on your goal and consider if partitioning might work. By partitioning out a resource, whether food, cigarettes, money, etc. research shows it can help to create a psychological trigger. While the effort may seem insignificant, the need to make a decision to go ahead and open that second bag of potato chips or dip into the account that was set aside to for that Mediterranean cruise, is enough to make you think twice. It seems that partitioning helps provide a kind of rule or barrier that in order to continue presents a small, yet significant dilemma to help keep you committed to achieving your goals.
Cheema, A., & Soman, D. (2008). The effect of partitions on controlling consumption. Journal of Marketing Research, 45(6), 665-675. Retrieved from http://journals.ama.org/doi/abs/10.1509/jmkr.45.6.665
Heath, C., & Heath, D. (2013). Decisive: How to Make Better Choices in Life and Work (1 ed.). Crown Business.
Soman, D., & Cheema, A. (2011). Earmarking and partitioning: increasing saving by low-income households. Journal of Marketing Research, 48(SPL), S14-S22. Retrieved from http://journals.ama.org/doi/abs/10.1509/jmkr.48.SPL.S14
Richard Feenstra is an educational psychologist, with a focus on judgment and decision making.
Bobby Hoffman is the author of "Hack Your Motivation" and a professor of educational psychology at the University of Central Florida.