Why do your quarterly plans seem to fall flat year after year? Why do you think you can achieve a lot more in a given period of time than you have capacity for?
Turns out there are two extremely common cognitive fallacies that are behind our biggest planning blunders: optimism bias and planning fallacy. Your operating cadence around your RevOps roadmap and goal setting is extremely important in how you overcome these challenges.
These phenomena are so deeply rooted in our ancient brain and so sneaky that despite having experienced the negative effects of them for many years, revenue leaders continue to believe they can start and finish 10 massive projects and magically increase their conversion rates by an unreasonable amount all within the span of a quarter.
OPTIMISM BIAS causes someone to believe that they themselves are less likely to experience a negative event.
Remember when you signed up for 10% uplift in SQL to Win conversion? When you were presented with this goal, your brain wanted to lock into the victory at the end vs. what it will take to achieve that goal in the nitty gritty.
When people think about future goals in what terms, they are focused on the the actual mechanics of getting from Point A (i.e. baseline conversion rate) to Point B (target conversion rate.) When we are presented with goals that are in a fairly distant future, our brains are furthest away from this what thinking and we are more prone to optimism bias.
This is supported with scientific evidence.
Psychologists Yaacov Trope and Nira Liberman asked a group of undergraduates to choose the best descriptions for a set of everyday activities.
One group was asked to imagine doing each activity in the near future (“tomorrow”), while another group was asked to imagine each activity in the more distant future (“next month”).
Trope and Liberman found that the students preferred to describe an activity such as “moving into a new apartment” as “packing and carrying boxes” (a what description) when imagining doing it tomorrow, but preferred the more abstract, why-based “starting a new life” when imagining the same activity a month from now. (source: Succeed)
Optimism bias combined with the long term nature of goals makes you overlook red flags and warning signs.
PLANNING FALLACY, on the other hand, feeds on your optimism bias. It is that overwhelming reassured feeling that a future task will take a lot less than what it will actually take.
Most projects go over time because of this fallacy.
So there are actual mind tricks that are being played on you... by your own brain and you somehow avoid these as you plan for future periods.
You need the right balance of what thinking (shorter term and more grounded in the reality of what it takes to get something done, obstacles along the way etc.) and why thinking (longer term, lofty, and reaches for more to overcome meaningful challenges for your business.)
Your planning window and operating cadence is extremely important in how you overcome these cognitive challenges we all deal with as we create roadmaps and set goals for future periods.
Too long of a planning window and you will be a lot more prone to having a plan that is too general. A plan that doesn't give adequate consideration to the details that matter is likely to over-commit you to unreasonable targets.
Too short of a planning window and you are taking on projects that are likely going to span outside of your planning window and you are not seeing the full results before you move on to the next shiny thing. More importantly, because the planning window is too short, you will be less likely to want to tackle lofty challenges that will have a meaningful impact on your business.
We took all of these factors into consideration in setting the perfect operating and planning cadence... this cadence allows to sign up to lofty goals yet remaining grounded in the reality.
- We use 6-month increments to set operating plans. A quarter is simply too short for any new program to achieve results.
- We have formal check ins quarterly to adjust the plan if needed, so we get to reality check as we go.
- We use January - July to observe, gather information / data, and understand our problems better and hypothesize on possible solutions.
- We use July - October to set objectives and strategic tactics to overcome these issues...
- We formalize the plans between October - November and get everything rolled out before the new year begins.
Adhering to this cycle allows us to get in touch with reality and do fewer things better to solve meaningful problems that have a high impact on our business.
Follow for more tips and the breakdown of the science behind goal-setting and creating an achievement culture.