Tesla chief executive Elon Musk outlined last month an update to the “master plan” he published a decade ago. He was vague on detail, but the car manufacturer is to develop electric cars, trucks, buses, and an app through which customers will be able to lease their vehicle.
Next to his other venture, Space X, Musk’s ambitions for Tesla look conservative. But the firm’s path to profitability is unclear, and yesterday it emerged that Musk has missed 20 targets, including financial and output goals over the last five years. Still, the share price has risen a whopping 760 per cent in the same period; investors have clearly bought into Musk’s grandiose vision. So are apparently unreachable goals a good way to motivate us to achieve more, or just a prelude to disappointment?
The context of our failure is important. High expectations are seen as a source of inspiration by some, and demotivation by others.
In The Folly of Stretch Goals, Daniel Markovitz argues that such targets can lead to excessive risk taking and unethical behaviour by employees who are eager to please, and that the inevitable failure has a demotivating effect. Instead, he says managers would be better off breaking up complex tasks into smaller steps for their staff, as suggested by psychologist Karl Weick in “Small Wins”. Workers can then measure their progress and feel more satisfied in completing their work.
That said, nobody is likely to achieve a ambitious feat without trying. “Performance is a function of expectations, since we rarely exceed our expectations or outperform our ambition,” Dartmouth’s Vijay Govindarajan told the Harvard Business Review.
Of course, it is entirely possible that we may stumble across big opportunities in the pursuit of other ones. Slack’s founders developed an office messaging system based on a programme they were using to communicate while they developed another product. The product – a game – failed but Slack’s messaging system has earned it unicorn status, with a valuation of more than $1bn.
The focus of our goals is also important. Huge profits, for example, may be a welcome symptom of a successful and growing business, but they are not perhaps a useful end goal. “Outlandish financial goals are usually in tension with genuine excellence,” management author Steve Denning told Forbes.
Coping with failure
Moreover, the psychological impact of failure may not be damaging if we think we have failed for certain reasons.
A study of students in 1999 by Melissa Cardon and Rita McGrath found that, provided people attribute their failure to a lack of effort, not ability, many would not be deterred from trying again.
Equally, if we want something badly enough, failing is unlikely to stop us. Research by Joachim Brunstein and Peter Gollwitzer in 1996 found that failure in a domain relevant to an individual’s self-definition may heighten their motivation to make up for it by succeeding in challenges that would help them satisfy that definition. In other words, if Musk sees production of affordable electric vehicles as an integral part of his identity, setbacks are unlikely to deter him.
Read more: City A.M. Unregulated: How to fail well
The emotional impact of failure in one area of our careers may be less acute if we have other projects on the go. According to research by Warwick Business School’s Deniz Ucbasaran, entrepreneurs who own a number of businesses simultaneously may be in a better position to cope when one goes under than serial or sequential entrepreneurs who only focus on one venture at a time.
Of course, this raises the question of whether we can really hope to achieve a lofty ambition if it’s not our only focus. Well, Musk is certainly trying it.