Watch your habits, because they will be the difference between success and failure

I am often bewildered at work when people consistently fail to meet the same minimum standard, week in, week out. For us public practice accountants, one of the most basic things we have to do is complete our timesheets, since this is how we record our time, how we know what we can bill clients for, and therefore how we make money.

But some people, even at senior levels, simply cannot manage to do this consistently, and I just cannot comprehend how this happens. For a while there I thought these people were lazy, or lacking in discipline, or just plain stupid (as we can guarantee that they will be named/shamed for failing this most basic of tasks, but they still fail anyway). But then I started doing some more investigation, and I believe that the reason they fail is because… …of their habits!




What are habits?

The Iron Lady: "Watch your thoughts, for they become words. Watch your words, for they become actions. Watch your actions, for they become habits. Watch your HABITS, for they become your character. And watch your character, for it becomes your destiny. What we think, we become".

The Iron Lady: “Watch your thoughts, for they become words. Watch your words, for they become actions. Watch your actions, for they become HABITS. Watch your HABITS, for they become your character. And watch your character, for it becomes your destiny. What we think, we become”.

For those of you who don’t know, habits are routines or behaviours that are repeated regularly and tend to occur unconsciously. For example, I get home from work every day, put my wallet and keys down on the bench, then get changed out of my work clothes. Every time, my little girls greet me at the door with squeals of delight and shouts of “Daddy!”, then follow me around demanding that I do stuff with them the whole time, even though they know I can’t do anything until I get changed out of my work clothes.

This process occurs every single working day, and it happens without any of us even thinking about it. Now this is a good example of habits on display. I like to think that there is nothing wrong with some of these activities, but I would like to change the part where I am harassed by my kids while I am trying to get changed every day. I often think to myself “how many times have I told you that I can’t play with your Barbie dolls while I am getting changed?”, but it’s not that they don’t remember, they just do it without thinking. While this is a good example of some habits, it’s not really something that we need to change as I actually quite like the attention from my kids when I get home.

It does however illustrate how the repetition of behaviours regularly can then make them continue to occur unconsciously. Now, back to my timesheet-missing buddies, and where they fit in. When I look at who is on the list of offenders, they are people that for whatever reason have seen it as OK historically to not do their timesheets or do them very late, with no real consequences. This has happened consistently throughout their careers and I would therefore say that it is “just” a habit that they need to address.

How do we analyse habits?

Habits can be broken down into three key components, these being:

  1. Cue: What causes the habit. In this example, the cue is getting to the end of the day and thinking “Shit! I haven’t done my timesheet! What have I been doing all day?”.
  2. Behaviour: The habit itself. In this case, it is deciding not to complete the timesheet until the next day. This is essentially deferring a task that it is “hard” or that you don’t want to do, otherwise known as procrastination, and is how pretty much everyone sabotages their financial future.
  3. Reward: The positive feeling that one gets from completing the behaviour loop. In this case it is the feeling of having “got away with” not completing the timesheet until the next day with no ramifications.

A 2010 study found that on average it takes 66 repetitions for a habit to form, however there was a range of 18-254 days. Even despite this wide range, I would think that the formation of the timesheets habit would be at the lower end of the spectrum, certainly below 66 days, although changing that habit could be a different matter.

What do habits have to do with success?

In our timesheet example, we have proven time and again that those that complete their timesheets on time have better financial performance overall. So at a simple level, one could conclude that completing timesheets on time = financial performance (or “success” in this area). While this is relatively straightforward to understand in this example, it shouldn’t be surprising that those that have good habits and the ability to identify and break bad habits (using their determination) are far more like to be able to retire early and achieve financial independence.

I’m sure everyone agree that the control of spending (and making this control become instinctive) is not the norm in our society, and achieving FI will therefore take great determination and good (rather than bad) habits. While ER and FI are goals of our blogging community, I firmly believe that good habits are critical for success in any goal in life (e.g. losing weight). This needs to become instinctive or habitual if you are to be able to repeat them consistently over the long term.

So how do we change habits then?

The best way to change habits it to eliminate both the cue and the reward. In our timesheets example this could be as follows:

  • Cue: Complete the timesheets as you go, thereby removing the cue of getting to the end of the day without even starting the timesheet and thinking “Oh shit! What have I done today?”.
  • Reward: Bringing in a consequence at the end of each day if timesheets aren’t done. This needs to be more than just “naming and shaming”, potentially linking through to a higher authority or having an effect on performance ratings/remuneration.

To transfer this into an example that is more applicable to a wider audience, people might buy a coffee every day, and in doing so waste $5. To address this habit, one might need to identify and eliminate the cue (e.g. stop having morning tea with a set group of people that always want coffee) and replace the reward (e.g. the buzz from having a great cup of coffee) with something else (e.g. dropping $5 into a jar and seeing the jar fill up).

While eliminating the cue and replacing/eliminating the reward may not be easy, the most important part is to identify the cue. Once you identify this then you can experiment with all sorts of alternatives to avoid the cue from occurring.

Good habits are one of the keys to success

If you look at anyone that is successful in their field, you should be able to identify some good habits that they have addressed, and the most successful people should have an abundance of habits that have essentially put a huge portion of the job on autopilot.

If you can get your habits under control, you reduce the amount of tasks to which you need to devote significant willpower, thereby increasing your effectiveness and longevity.

What about you?

So what are your bad habits? Can you identify them and their cues? And do you believe that you have the willpower/determination to change them?

IA.

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