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Marketing

The Little-Known Quirk in the Way Our Brain Evaluates Goals

Amitava Chattopadhyay, INSEAD Professor of Marketing; Antonios Stamatogiannakis, IE Business School Assistant Professor of Marketing; and Dipankar Chakravarti, Pamplin College of Business Professor of Marketing |

Contrary to popular belief, pursuing a modest positive change is sometimes perceived as easier than maintaining the status quo.

“Maintaining possessions is more difficult than acquiring them.” – Demosthenes

Most managers, whether they are in charge of setting sales quotas or other KPIs, often search for that holy grail-like balance between compelling results and keeping the troops happy. Things get even trickier when the context is less than ideal – a recently expired key patent, a competitor waging a price war or a more chaotic than expected merger, for example. Is it realistic to ask your staff for more or is it better to keep targets as they were?

In our paper, “Attainment versus Maintenance Goals: Perceived Difficulty and Impact on Goal Choice”, we show that, at odds with lay intuition, modest attainment goals in isolation can be perceived as less difficult than objectively easier maintenance goals. If the incremental change is modest enough, the brain seizes on that easy-to-bridge gap and concludes that the goal is easy. However, in the absence of any gap-related cue – such as when the goal is merely to maintain the status quo – the brain turns to the next best cue: context. When negativity bias sets in, the brain starts thinking of all the things that could derail the established project and prevent the same results from being replicated. The goal doesn’t appear to be easy. Especially when the status quo goal is directly compared to one requiring an incremental gain.

Difficult is always relative

In our first study, we recruited 305 participants on Amazon’s Mechanical Turk and asked them to rate the difficulty of hypothetic goals related to academic grade point average (GPA), personal savings and tennis wins.

Participants were split into five groups. One group only judged goals that involved maintaining the status quo (“maintenance goals”), e.g. keeping the exact same GPA, etc. The other four groups each judged the difficulty of attaining goals that involved either a small, moderate, large or very large change, respectively, vs. a common baseline (“attainment goals”).

As expected, the judged difficulty of attainment goals matched the size of the gap between the baseline and the desired result. On a scale from 1 to 7, the difficulty of realising a very large change was rated as 4.01 (the hardest) while the difficulty of achieving a small one was rated as 2.82 (the easiest). Strikingly – but just as we had posited – maintaining the status quo was deemed more difficult (3.23) than achieving a small positive change. The difficulty fell just a hair below that associated with attaining a moderate change (3.49). We thus demonstrated that when evaluated separately, modest attainment goals are seen as less difficult than objectively easier status quo goals.

In our second study, participants not only evaluated goal difficulty (again in isolation), but also listed the reasons for their ratings. This time, participants were split into two groups: One evaluated the hypothetical difficulty of achieving modest increases in savings, charity donations and weekly sales, while the other judged the difficulty of maintaining the status quo in these domains.

As we had predicted, the group that evaluated the modest attainment goals were more optimistic about success as they focused on how small the gap was. On the other hand, participants who rated the difficulty of maintaining the status quo were more pessimistic as they listed more potential reasons for failure that dealt with context (e.g. a downturn in the economy that might prove a hurdle). The difficulty of modest attainment goals was rated 1.76 vs. 3.04 for the status quo goals.

When evaluating goal difficulty, the brain first looks at the size of the gap that separates the desired result from the baseline. The bigger the gap, the more difficult the goal, as logic would suggest. Only later does the person think of the context in which the goal is to be achieved. However, in the absence of any gap, i.e. when the goal is merely to keep things as they are, the mind immediately starts examining the context. An all-too-human negativity bias then tends to kick in, with the mind generating reasons why things might fail.

The third study similarly showed that people are more sensitive to context-related information when assessing the odds of maintaining the status quo – and all the more so if the context is unfavourable. In this case, difficulty ratings nearly doubled (1.98 vs. 3.93). A negative context also made attainment goals seem more difficult, but to a lesser extent.

Head-to-head evaluations

In the fourth study, participants were asked to compare the difficulty of maintenance and attainment goals, as opposed to considering them in isolation. When evaluated jointly, modest attainment goals were judged as somewhat more difficult than maintenance goals (3.02 vs 2.43). Per past research, participants took their cue from the gaps between the desired state and the baseline, and logically concluded that it was easier to maintain the status quo than to increase results.

Nonetheless, when participants were asked which of the two goals was more likely to be chosen (assuming someone could pick between the two), modest attainment goals won all around. This finding held whether it was about achieving a higher GPA, exercising more, completing more tasks or working more hours. Further analysis revealed that participants anticipated greater satisfaction from achieving modest positive changes as opposed to maintaining the status quo.

Our fifth study involved participants making goal decisions based on real money. We recruited 233 participants on Amazon’s Mechanical Turk and paid them $0.60 to complete a savings and spending simulation task. Half the participants were asked to choose between a bank account that would pay them a bonus of $0.40 if they increased their bank balance by at least $1 per month and one that would pay them a $0.20 bonus no matter what (no goal). The rest of the participants chose between that same goal-free bank account and one that would pay them a $0.40 bonus if they simply maintained their initial bank balance.

In both groups, most participants chose the potentially more rewarding bank account that entailed setting a goal. That choice was actually even more popular (80.7 vs. 69.3 percent) in the group which could pick an account that required them to increase their bank balance, even though, objectively, this goal was more difficult.

What this means for managers

Our findings suggest that status quo goals may be a less attractive proposition for workers than goals involving a modest increase in results. Even if attainment goals are correctly perceived as harder through direct comparison, they are more valuable and preferred over maintenance goals.

In challenging environments, such as a bearish economy, managers might be inclined to assign softer maintenance goals. However, such goals may draw even more attention to the untoward market conditions. Modest quota increases may be perceived as easier, unless employees can somehow choose between maintaining the status quo and a higher quota.

In terms of marketing, modest attainment goals may persuade individuals to participate in promotions which they would otherwise ignore. For instance, a bank may successfully entice customers to increase their account balance slightly instead of maintaining the same minimum balance.

When it’s a win-win, what is to prevent a manager from making good use of a little quirk in human psychology?

Amitava Chattopadhyay is the GlaxoSmithKline Chaired Professor of Corporate Innovation at INSEAD. He is co-author of The New Emerging Market Multinationals: Four Strategies for Disrupting Markets and Building Brands. You can follow him on Twitter @AmitavaChats

Antonios Stamatogiannakis is an Assistant Professor of Marketing at the IE Business School.

Dipankar Chakravarti is the Sonny Merryman Inc. Professor in Business at the Pamplin College of Business of Virginia Tech.

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