Power Players

How Bill Gates, Richard Branson and Ray Dalio approach goal-setting

This is how billionaires Richard Branson, Bill Gates and Ray Dalio set goals
This is how billionaires Richard Branson, Bill Gates and Ray Dalio set goals

For many people, it's that time of year again when setting goals is top of mind. But with so many methods, strategies, tricks and tools, just figuring out how to approach your New Year's resolutions can be a lofty goal in itself.

Here are how three billionaires approach goal-setting, and what you can learn from them.

Bill Gates uses the OKR method

Billionaire and co-founder of Microsoft Bill Gates takes a very specific and measured route to goal-setting. He uses what's called the OKR method — a project management system first championed by the late Intel CEO Andy Grove, who was one of Gates' favorite business leaders, and further developed by venture capitalist John Doerr. It's also a method used by successful companies like Google.

OKR calls for first setting objectives (the "O" in OKR), meaning what you want to accomplish; they should be significant, action-oriented and aspirational. Then you identify key results ("KR") that help you meet your objectives. Key results should be specific, measurable and verifiable.

For example, you might set a goal of becoming the best dog-walker in New York City. To accomplish that, a key result might be to secure 10 new clients by the end of March 2019. The objective steers you in the right direction, while the key result is a measurable achievement along the way.

According to Gates, "Having a good mission is not enough. You need a concrete objective, and you need to know how you're going to get there."

Gates recalls using OKR when he was running Microsoft and starting the Bill & Melinda Gates Foundation: "[M]y time was limited, and [we] had to make things very efficient," Gates says in Doerr's book "Measure What Matters." "The goals process was a big part of that."

Richard Branson writes it all down

Billionaire and Virgin Group founder Richard Branson is known for his big, out-of-the-box ideas. To help make his ideas a reality, Branson writes things down.

"It's time to get your New Year's resolutions down on paper. The simple act of writing it down will help you stick to it," Branson says in a post on his blog. "Share your goals with your family and friends but ultimately it's down to you to make your resolution happen."

Indeed, research underscores the importance of physically writing down your goals: It's been reported that you become 42 percent more likely to achieve your goals and dreams if you write them down on a regular basis.

Branson also recommends having short-and long-term goals, as he says it's motivational to rack up small successes while working toward loftier resolutions.

"If you set daily goals and work through your list every day, you can mark off every completed task with a satisfying tick," Branson says. "This helps keep you motivated to aim for the big targets."

Ray Dalio knows to focus

Billionaire Ray Dalio certainly knows a thing or two about setting — and reaching — his goals. The financier grew Bridgewater Associates from an operation run out of his apartment to one of the world's largest hedge funds.

To achieve your goals, Dalio says be selective.

"While you can have virtually anything you want, you can't have everything you want," he explains in his 2017 book "Principles: Life & Work." "Life is like a giant smorgasbord with more delicious alternatives than you can ever hope to taste. Choosing a goal often means rejecting some things you want in order to get other things that you want or need even more.

"Some people fail at this point, before they have even started," he says. "Afraid to reject a good alternative for a better one, they try to pursue too many goals at once, achieving few or none of them. Don't let yourself be paralyzed by all the choices."

Dalio also cautions against confusing goals with desires. Goals, he says, need to be achieved (such as achieving good physical fitness), while desires can actually prevent you from reaching goals (like eating good-tasting, but unhealthy, food).

And, don't forget to aim high, Dalio says.

"What you think is attainable is just a function of what you know at the moment," he says. "Remember that great expectations create great capabilities. If you limit your goals to what you know you can achieve, you are setting the bar way too low."

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Financial resolutions to ring in the new year
Financial resolutions to ring in the new year