This is why failure is the key to success

Anyone who has ever been on a diet or tried to quit smoking knows how difficult it can be to attain a personal goal. One nibble of a chocolate chip cookie or puff of a cigarette can feel like failure, making it tempting to give up altogether. But research from Wharton marketing professor Marissa Sharif offers something better than an all-or-nothing strategy. She recently spoke with Knowledge@Wharton about how including cheat days — which she calls “emergency reserves” — can help people stay on track with their goals. Her findings also have implications for businesses that want to build stronger connections with their customers.

Knowledge@Wharton: You have co-authored studies about the benefits of emergency reserves. Tell us about that and the context of your research.

Marissa Sharif: On a very broad level, I imagine how to help consumers reach their goals, like trying to lose weight or trying to save money. In these papers, I examine how incorporating a type of flexibility called an emergency reserve into goals can help people become more motivated.

For example, in one study I had people download an app to track their steps on their phone, and I gave them one of three goals. One goal was to reach their step goal, say 7,000 or 10,000 steps, seven days of the week. I gave another group a goal of reaching 7,000 or 10,000 steps five days of the week. Lastly, I gave another group a goal of reaching their steps seven days of the week, but I gave them two emergency skip days that they could use just in case they needed it. I call these emergency skip dates an emergency reserve. You can imagine other types of emergency reserves like an emergency skip day in your diet — one day where you just don’t follow it. You can imagine it as skipping from the gym. Or you can imagine it as an emergency budget within your budget — $20 spending on whatever you want, for example.

What I find is that people with emergency reserves are more likely to reach their step goal than the others. They also on average take more steps. So, it seems like giving these people emergency reserves in their goals helps them perform better.

Knowledge@Wharton: What are the key takeaways? Does having an emergency reserve simply make people feel better psychologically, or is something else going on?

Sharif: I think there are two things going on for why people with emergency reserves are performing better. The first one is that people try to resist using their emergency reserves. They try to hold on to them. They’re waiting for a better or more emergency situation to use them later on, and they kind of feel bad using them if it’s not an emergency situation.

The second thing is if people do fail for whatever reason to go to the gym one day or reach their step goal one day, they can use these emergency reserves and feel less bad. They feel like they have failed less, which makes them feel more committed to their goal and leads them to persist more. I think the general takeaway here is that incorporating these emergency reserves helps people perform better. On a more broad level, sometimes incorporating flexibility in goals can help people perform better in the long run.

Knowledge@Wharton: Many companies are trying to encourage employees to meet health goals. You see brands creating goal-oriented apps. Even some stores set out to help customers achieve particular goals. Should the concept of emergency reserves play into that?

Sharif: Yes, definitely. I think the most direct application would be for companies that are helping consumers reach their own goals — weight loss programs, trainers, something like that. The clear kind of benefit from what I was just talking about is that incorporating these emergency reserves can help people perform better. But another benefit that I found is that people really like having emergency reserves. I found that if people have these bigger goals of trying to lose weight or trying to become fitter, they prefer goals with emergency reserves to goals without. What this means is that not only can companies help their consumers perform better by incorporating emergency reserves into their goals, but they can also attract them to sign up initially by offering emergency reserves within their program.

Knowledge@Wharton: It seems that having emergency reserves humanizes the process of reaching goals. It makes it more realistic.

Sharif: Exactly. I think there’s kind of two parts of that. One is that people feel like it’s more attainable than a hard goal and never having that slack at all. Another part of it is that people want to feel motivated to try every day to not use their emergency reserves, which makes them feel like they can perform better than [when they have] an easy goal.

Knowledge@Wharton: What’s next for this research?

Sharif: I think the next step for research about emergency reserves would be looking at what is the optimal emergency reserve. Is there is a boundary condition? If you give people too many emergency reserves, does it backfire? For example, if I give people a goal of reaching their steps seven days a week but give them four emergency reserves, will it work in the same way or will it backfire? Then, more generally, I’m looking at other factors that help people persist more in their goals.