Photo Credit iStockPhoto
Making financial decisions in the moment can be one of the riskiest things that you can do in your business. Particularly if it is a big bet kind of decision. You know what I am talking about. The “all in on 10 black” kind of decisions that your gut tells you is a good idea but you haven’t tested that assumption at all. It might work out and pay off big. But it is a big risk that may end in disaster for you and your business if it doesn’t work out.
If you have been in business for a while, and you are still in business, you probably recognize this as a poor strategy. This way of thinking isn’t first and foremost in your mind. But, you may struggle with the less deadly version of this. Just simply not having any guardrails around your decision making to check yourself. That impulsive purchase of a new software program likely isn’t going to sink you…but the question needs to be, how could I have made a better decision? What habits and routines can I establish around that process that will help me do a better job?
“We are what we repeatedly do. Excellence, then, is not an act, but a habit.”
― William Durant
This has been an endlessly fascinating topic for me when it comes to how people make money decisions, both in their business and personally. What habits and routines can help with this process? Why does one solution work for one person but not for another? Even though we know that people are unique individuals, there is this desire to have a one size fits all solution. “If you would just do X, you will get result Y!” But that isn’t reality. If it was, this wouldn’t be a problem.
I have been studying habits and routines a lot lately, trying to figure out what things actually work and why. I just started reading a new book by Gretchen Rubin called Better Than Before. She has been researching this very question and so far I find her conclusions very compelling. When I finish the book, I will do a detailed review but I found what I have just read so useful that I wanted to write about it now.
She says that the first and most important habits question is “How does a person respond to an expectation?” When we try to form a new habit, we are setting an expectation for ourselves. Therefore, it is important to understand how we respond to expectations. But there are also two different types of expectations that we face, outer expectations (those coming from outside ourselves, i.e. work deadlines, traffic regulations) and inner expectations (what we expect from ourselves, things we turn into New Year’s resolutions).
From this first question, she identified four groups that just about everyone falls into:
- Upholders – readily respond to both outer expectations and inner expectations.
- Questioners – they question all expectations and respond only to the ones that they feel are justified
- Obligers – respond readily to outer expectations but struggle to meet inner expectations
- Rebels – resist all expectations, inner and outer.
This framework provides good insight into why some people easily keep their New Year’s resolutions (Upholders) and others resist the process completely (Rebels). It also supports why coaching and mastermind groups are such powerful tools for most people.
I am excited about finishing this book because I think that success toward any goal that you have starts with self-knowledge. What are your goals and why are they meaningful to you? What has gotten in the way of you achieving your goals? What strategies have you used in the past and how have they worked? Now, with this additional insight I think it will be another great tool to help answer those questions and to build the systems that make the execution of the behavior that we want automatic.
Comments
Share this Post