Nobody knows the future. Instead of trying to predict what is going to happen, a more effective goal setting exercise is to optimize for optionality.

In Antifragile, Nassim Taleb introduces the concept of optionality:

“Options, any options, by allowing you more upside than downside, are vectors of antifragility.

If you “have optionality,” you don’t have much need for what is commonly called intelligence, knowledge, insight, skills, and these complicated things that take place in our brain cells. For you don’t have to be right that often. All you need is the wisdom to not do unintelligent things to hurt yourself (some acts of omission) and recognize favorable outcomes when they occur. (The key is that your assessment doesn’t need to be made beforehand, only after the outcome.)

Option = asymmetry + rationality.

The mechanism of optionlike trial and error (the fail-fast model), a.k.a. convex tinkering. Low-cost mistakes, with known maximum losses, and large potential payoff (unbounded). A central feature of positive Black Swans.”

In other words: having lots of options is the only way to outperform the average in this unpredictable world.

The Old Way of Planning Doesn’t Work Anymore

Here’s the truth:

Nobody can predict what is going to happen. Planning might as well be called guessing.

And that’s why the old way of planning goals doesn’t work anymore.

First, because there isn’t a single right way to achieve a goal. There’s more than one way to skin a cat.

And second, the world is moving much faster. Because of this, by the time you finish your strategy plan, it will be outdated.

But that changes when you optimize for optionality.

You still focus on a single goal but have many options to achieve it.

By doing this, you can test your assumptions and get results faster. And by accelerating the feedback loop, you’re quicker to drop what’s not working and double down on what is.

Effective Goal Setting: How to Plan By Optimizing for Optionality

To be more effective at goal setting, plan for optionality in 4 steps:

1. Review Your Previous 90 Days
2. Choose Your One Goal
3. Define Falsifiable Success
4. Optimize for Optionality

For best results, do this exercise every 90 days.

Copy my template here.

Step 1: Review Your Previous 90 Days

To optimize the future you must first understand the past.

So the first piece is evaluating your efforts and results from the previous 90 days.

Use your weekly review to uncover your previous period’s biggest wins and lessons.

Do a quick 80/20 analysis of your last 90 days using these questions:

• “What are the 3 actions that brought the biggest results?”
• “What are the 3 actions that brought no results?”
• “If I could only work 20 hours per week, what actions would I focus on?”
• “And if I could only work 20 hours per month?”

Write down your answers on the sheet “Step 1: Review”.

Don’t do weekly reviews? Then you’ll have to do this process now. Go through each week and try to remember your work.

Prompts to do a quick review of each week right now:

• “What did I achieve that week?”
• “What went wrong this week?”
• “And what was the biggest constraint on my output?” (from the book “The Goal”)

Yes, it will take longer. But, it’s a much-needed exercise. So don’t skip this step.

Step 2: Choose Your One Goal

Time to choose one goal to focus on for the next 90 days.

Not 5 goals. Not 3. One. You get only one goal.

Why?

Having too many goals complicates things. Plus, multiple goals need a complex tracking system.

Simplify. When it comes to goals, less is more.

So, what goal should you choose?

Here’s a simple heuristic to help you:

“Which one goal would have the greatest positive impact on my life?”

Brainstorm and write down everything that comes to mind. We’re after quantity more than quality at this point. More food for thought in my goal-setting article.

Also, think on a high-level basis about:

1. Your long-term vision for your life – “What do I want?”
2. The rewards of the market – “What does the market pay?”
3. How you can use your skills – “What am I good at?”

Ideally, you want to choose a goal that checks all 3 criteria.

Write down your answers on the sheet “Step 2: Goal”.

Step 3: Define Falsifiable Success

Great, you have defined your one goal.

The biggest mistake most people make is ending the process here.

Goals by themselves are empty. They’re aspirational.

So to transform your goal from aspirational to actionable, you need to define success in a falsifiable (yes/no or quantifiable) way.

For example:

• “Get better at my job” is not falsifiable
• “Be promoted” is yes/no falsifiable
• “Get a 10% raise” is quantifiable

Ask yourself:

“If I am reading this in 90 days, what needs to have happened for me to feel happy with my progress?”

It also helps to create a goal statement. For example: “I will get a 10% raise in the next 90 days.”

Write down your answers on the sheet “Step 3: Success”.

Falsifiable goals give you a single focus for the next 90 days.

And that’s an extremely helpful heuristic to have when evaluating future opportunities. This works both on the macro and micro levels.

You can decide on the value of joining a new project or attending a meeting by assessing “if it brings me closer or farther to getting a 10% raise.”

Step 4: Optimize for Optionality

So now you know what you’re working towards and what success means. It’s time to hypothesize the best way to get there.

Ask yourself:

“What are all the different ways I could achieve my goal?”

Start by listing possible actions you could do in the 90 days to achieve your goal. Again, we’re after quantity for now.

You can write your options on the sheet “Step 4: Options”.

Then, rank each opportunity from 1-10 based on 3 criteria:

• Impact. Your gut-feeling of how likely the action will succeed. The bigger the score the more confident you are.
• Time. The amount of time it will take to test your assumption. The bigger the score the less time it takes to get results.
• Ease. How easy it is to implement an action. The bigger the score the easier the action.

The combined sum of these 3 criteria is the final score of your hypothesis. You can rank them using this number.

Like this:

The best options have a limited downside with large, open-ended upside.

For example:

If you apply to a new job, there’s a high probability to get a better offer (large upside). And you can always say no to an offer with minimal consequences to your life (limited downside).

Every 90 days pursue the 1-3 opportunities with the highest score.

A few notes:

• By default, each criterion has the same weight. But if you value one factor above others, you can adjust this
• You can also modify the criteria or add more factors. But remember to keep it simple

Effective Goal Setting Field Notes

Instead of trying to predict the future, a more effective goal setting exercise is to optimize for optionality.

Step 1: Review Your Previous 90 Days

• “What are the 3 actions that brought the biggest results?”
• “What are the 3 actions that brought no results?”
• “If I could only work 20 hours per week, what actions would I focus on?”
• “And if I could only work 20 hours per month?”

Step 2: Choose Your One Goal

• “Which one goal would have the greatest positive impact on my life?”

Step 3: Define Falsifiable Success

• Transform your goal from aspirational to actionable by defining success in a falsifiable (yes/no or quantifiable) way
• “If I am reading this in 90 days, what needs to have happened for me to feel happy with my progress?”
• Falsifiable goals give you a single focus for the next 90 days

Step 4: Optimize for Optionality

• “What are all the different ways I could achieve my goal?”
• Rank each opportunity based on impact, time, and ease
• Every 90 days pursue the 1-3 opportunities with the highest score

For best results, do this exercise every 90 days.

Copy my template here.

Tags:: goals, Planning