Mindset 6 min read

Great Expectations Create Great Capabilities

Our potential expands to fill the magnitude of our goals. In order to thrive, we must set goals that are beyond what we think we can achieve today.
“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.” —Ray Dalio

“Mr. Miyazaki interrupted. ‘Mr. Knight—what company are you with?’ he asked.

“‘Ah, yes, good question.’”

Long before Nike became a global brand, long before Nike even made its own shoes, Phil Knight, its creator, went to Japan to see if he could turn his crazy idea of importing Japanese shoes to America a reality. Somehow, he managed to arrange a meeting at Onitsuka, one of Japan’s oldest shoe companies who manufactured a running shoe he really liked. He was still in his early twenties, and not only did he not have a company, he didn’t even have the money to pay for a sample order. But that didn’t matter.

“Blue Ribbon,” Knight blurted out, recalling a wall in his house he covered with blue ribbons from track—“Gentlemen, I represent Blue Ribbon Sports of Portland, Oregon.” The Japanese took him seriously, discussed their American ambitions, showed him around, and he ended up placing a sample order. Because he didn’t have the money pay them, he gave them his address and rushed away to send a letter to his father, asking him to wire Onitsuka the money.1

After some delay, the shoes arrived in America. He sold them, he ordered more, he sold those, and the virtuous cycle began to spin. In time, Blue Ribbon would start producing its own shoes, and change its name to Nike. To be sure, Nike’s growth is the result of countless hours of hard work by a team of talented individuals, but none of that would have ever beed possible had Phil Knight not taken that first courageous step to launch upon an enterprise without experience or guidance. He wasn’t going in completely blind. He did extensive research on the market in college and, being himself a runner, had a good idea of what a great product should be like. But his knowledge was all theoretical. To turn that knowledge into experience he had to take action. We don’t know what’s possible until we try, but the magnitude of our success is largely dictated by how high we set the bar.

During its meteoric rise in the late 1960s, McDonalds was working on renovating its restaurants. One of the aims of this renovation was to increase seating capacity. Ray Kroc—the man responsible for growing the McDonalds franchise from a couple of restaurants to an international chain—experienced pushback on his aggressive expansion plans. His managers wanted a slower, more conservative approach because they were afraid of building restaurants for a level of demand they had not yet reached.

What they did not realize, or did not agree with, is that—as Ray Kroc writes, borrowing a phrase from Fred Turner, his top executive and future CEO:2

business will expand to tax the facilities provided. In other words, if you have a few extra feet of griddle and an extra fry station, or if you install one more cash register than existing business required, you’ll be challenged to put them to use.

Our effort and ingenuity expands to fill the vessel that is our goal. While it’s possible that we might aim too far and overstretch ourselves, what’s certain is that if the vessel is too small, if the goals is below our capacity, it will limit our potential.

In The Third Door, Alex Banayan tells how his mentor, Elliot Bisnow, started Summit Series, an annual conference for young entrepreneurs and artists which boasts famous guests like the founders of Zappos, YouTube, Twitter and Facebook:

He rallied the founders of CollegeHumor, TOMS Shoes, Thrillist, and more than a dozen other entrepreneurs, and they all went skiing for a weekend on Elliott’s dime. Elliott even paid for their flights. Of course, he didn’t actually have that kind of money, so he put the $30,000 cost of the trip on a credit card and gave himself until the end of the month to pay it off.

To pay for the trip, he cold-called companies, asking them to sponsor a conference of twenty of the country’s best entrepreneurs. The offer was attractive and the sponsors came aboard. Even though Bisnow had never ran a conference before, he knew he could figure out the details later. And it worked. The conference grew every year to a point where Summit ended up purchasing Powder Mountain, America’s largest ski resort for $40 million. From that first conference, this is how Bisnow lived his life: “Bite off more than you can chew. You can figure out how to chew later.”

The life of David Goggins is an example of how overcoming mental limits allows us to perform at levels we never imagined. After a difficult childhood of poverty and abuse, Goggins found himself in a bad place, both physically and mentally: he was fat and working a job that gave him little satisfaction and future prospects. He hated his situation, and one day he took action. In a dramatic reversal, Goggins transformed his physical and mental self to qualify (after three attempts) for the Navy SEALs, one of the most elite special operations forces in the world. After his service with the SEALs, Goggins continued to push himself by competing in countless marathons, triathlons and ultramarathons, placing highly in many of them and winning several, as well as breaking the world record for the most pull-ups in 24 hours (4,030).

In Can’t Hurt Me, Goggins writes about the extent to which our mind restrains our full potential. He likens these mental limits to a car governor, a piece of hardware that caps the performance of an engine to prevent it from overheating.

Our governor is buried deep in our minds … It’s the software that delivers personalized feedback—in the form of pain and exhaustion, but also fear and insecurity, and it uses all of that to encourage us to stop before we risk it all.

The point at which we start wanting to quit is only about 40% of what we are capable of, which means that if we can push through the mental barrier, we can break through into an untapped reservoir of potential. Even the very idea of setting an ambitious goal is limited by our insecurities and fears. We can overcome this by switching from a fixed to a growth mindset, transforming the way we view failure: from failure being the outcome, to failure being not trying.

Ray Dalio, the billionaire founder of Bridgewater, the biggest hedge fund in the world with around $160 billion in assets in 2020, attributes his success to a series of life and work principles he developed and evolved throughout his life. On the topic of setting goals, Dalio writes:3

Never rule out a goal because you think it’s unattainable … What you think is attainable is just a function of what you know at the moment. Once you start your pursuit you will learn a lot, especially if you triangulate with others; paths you never saw before will emerge.

Unreasonable, ambitious goals are what’s known as stretch goals. In Measure What Matters, John Doerr explains the advantage of setting stretch goals over goals we may consider achievable. Doerr cites Edwin Locke’s research on the correlation between goal difficulty and achievement, which found that we actually perform better when faced with more challenging goals. “Although subjects with very hard goals reached their goals far less often than subjects with easy goals, the former consistently performed at a higher level than the latter.”4 Furthermore, challenging goals have been found to boost motivation and engagement.

In practice, this means that if you’re achieving 100% of your goals, it might be an indicator that you are setting your aim too low. While you could start raising the bar much higher, you can also go for a hybrid approach, mixing the achievable with the challenging. For example, teams at Google split objectives into two categories: committed and aspirational. The former should be achieved fully, but the latter are stretch goals where the average rate of failure is 40%. These unreasonable goals fuel your motivation and, even in the likely case that you fall short, you’ll find that you’ve achieved more than if you had aimed for something more reasonable.

They can, because they think they can Virgil

  1. Phil Knight, Shoe Dog 

  2. Ray Kroc, Grinding It Out 

  3. Ray Dalio, Principles 

  4. Edwin A. Locke, “Toward a Theory of Task Motivation and Incentives,” Organizational Behavior and Human Performance 3, 1968, as cited in John Doerr’s Measure What Matters