Blinded by Success: How Obsessive Goal-Setting Can Backfire in Finance and Beyond

Within the fast-paced world of funding administration, success is usually measured by arduous numbers — returns, mandates received, belongings underneath administration. However an obsessive deal with hitting targets can result in goal-induced blindness, the place professionals overlook the long-term penalties of their actions. An instance of goal-induced blindness that’s typically cited in psychology literature is the deaths of climbers on Mt. Everest. 

From burnout to moral missteps, the pursuit of short-term wins can come at a steep price. Simply as corporations like Wells Fargo and Volkswagen suffered from prioritizing efficiency metrics over integrity, funding professionals threat making selections that enhance speedy features whereas undermining sustainable success. Recognizing the hidden risks of unchecked ambition is important for sustaining each skilled longevity and moral management within the monetary business.

There are examples in all places of extremely motivated people who find themselves “blinded by the objective” (cue the “Blinded by the Mild” tune), from younger bankers hooked on Adderall to a girls’s soccer group utilizing a drone to spy on their opponent’s follow. But, in profitable organizations, this matter is nearly by no means mentioned. Will probably be a speaking level on my panel at CFA Institute LIVE 2025 in Chicago in Might.

Within the early years of my profession in finance, I labored within the analysis and buying and selling division at a number one financial institution. I managed a small group that offered asset allocation recommendation to massive institutional purchasers. More often than not, we needed to crunch numbers and ship suggestions rapidly as a result of our agency was competing to win the associated portfolio reallocation mandates. We had clear targets for rising our actions. We counted the research, the suggestions, and the wins/losses of buying and selling mandates. We coated the globe. Lots of of research yearly. It was fast-paced, and I beloved it.

However I developed goal-induced blindness. I wasn’t caring for myself. I used to be touring continuous, and wasn’t getting sufficient sleep. More often than not, upon waking up, I wanted a couple of minutes to remind myself which period zone I used to be in. If a salesman requested me to fly to Japan for a presentation with one or two days’ discover, I used to be blissful to rise to the event. It made me really feel essential. I spent most of my time on the street whereas remotely managing the remainder of the group by way of BlackBerry (keep in mind these?).

Sooner or later, I developed a head chilly that lasted a 12 months. I used to be careworn and exhausted. It took me some time, however I finally realized that my frenetic work ethic was dumb. Simply plain dumb. Lack of sleep weakened my immune system and made me much less productive. I like to recommend Matt Walker’s ebook Why We Sleep on the hostile results of lack of sleep.

I’ve typically observed excessive performers who aren’t maximizing their potential as a result of they deal with a slender set of measurable targets on the expense of their long-term wellbeing. More often than not, it’s not full goal-induced blindness, nevertheless it’s a blind spot. 

Firms can even endure from goal-induced blindness. Consider Wells Fargo workers opening dummy accounts, presumably to extend the measurable objective associated to the variety of new accounts opened. Or Volkswagen dishonest their carbon dioxide emissions numbers. Or buying and selling and funding corporations taking an excessive amount of threat to juice short-term returns. Examples abound.

One of the highly effective elements of the psychology of management, borrowed from economics, is that individuals reply to incentives.

You need to encourage your group to attempt towards bold targets and, by all means, connect incentives to them. Nonetheless, you must insist on two non-negotiable guidelines. 

1. Nobody ought to ever compromise their well-being. In the long term, a mentally and bodily wholesome group will crush any overworked competitors. Many younger bankers are hooked on Adderall, experiences the Wall Road Journal. This will enhance their short-term productiveness, nevertheless it’s a path that nearly definitely results in unfavourable long-term outcomes. 
2. Make it crystal clear that everybody ought to keep miles away from any moral gray zone. Simply ask the Canadian girls’s soccer group. From The New York Instances:

Canada’s girls’s soccer group entered the Olympics because the reigning gold medalist and the No. 8 group on this planet. But its Paris Video games started with an accusation of spying on New Zealand, a group ranked twenty eighth that has received solely two Olympic matches in its historical past. Soccer’s world governing physique FIFA then handed Canada coach Bev Priestman a one-year suspension, deducted six factors from the group’s Olympic group-stage complete and issued a positive. Canada’s enchantment in opposition to the factors deduction was unsuccessful.

Ambition fuels success. It pushes people and groups to attain extraordinary outcomes. Nonetheless, too many organizations neglect that the relentless pursuit of measurable targets can result in burnout and moral missteps.

With out perspective, ambition narrows our focus, making us blind to warning indicators. The fallout may be extreme: strained relationships, broken reputations, and even the collapse of organizations.

Ask the important questions: Is that this objective value the price? Are we reaching it in a approach that aligns with our values? What’s the influence on our well-being and the well-being of these round us? When ambition is guided by perspective, it transforms from a dangerous obsession right into a pressure for achievement.

Key Takeaways

Ambition is a strong driver of success, however with out perspective, it might turn into a legal responsibility. Whether or not in finance, sports activities, or company management, goal-induced blindness can result in moral compromises, burnout, and short-sighted decision-making. True management requires balancing ambition with consciousness—making certain that the pursuit of success doesn’t come at the price of well-being, integrity, or long-term sustainability. By fostering a tradition that prioritizes moral decision-making and private well being, people and organizations can obtain not simply short-term wins, however lasting, significant success.

Sébastien Web page, CFA, is the writer of The Psychology of Management.

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