The Gap and the Gain

In the last few weeks of the year, many of my coaching calls become a time and space for reflection. How did I do this year? What do I want for next year? Whether this takes the shape of formal goal-setting or informal reflection, it’s a natural part of the end of the year for most of us. At times, that reflection can shift from productive to punishing. From “What did I accomplish this year?” to “How did I fall short?” When I notice that shift, I share a frame, the Gap and the Gain, that I was introduced to a couple of years ago. Without exception, this frame has made a difference in how my clients see their work and even more broadly, how they see themselves. So, it seems like exactly the right topic for an end-of-year post.

The Gap and Gain framework comes from the author and coach Dan Sullivan. If you’re intrigued and want to learn more, he has made a number of resources available for free and through a short and easy-to-read book about the subject.

Sullivan suggests there are two distinct ways of thinking about goals and achievements—one that emphasizes the gap, and the other that emphasizes the gain. When we adopt a gap mindset (the left side of the graphic), we envision an ideal and then measure ourselves against that ideal. The problem with this? Ideals, by definition, are hard to achieve and often become moving targets. When we measure ourselves against an ideal, we minimize our accomplishments or our gains. Alternatively, we can use the ideal as a source of inspiration—but when it comes time to reflect and assess we measure our accomplishments—the gain. We do this by looking backward to where we started and how far we’ve come. Measuring the gain keeps us from comparing ourselves to others and against a moving target. Instead, we can honestly look at how far we’ve come and celebrate that. The result? When we’re in the gain we experience success, our confidence increases, our sense of efficacy grows, and our motivation to keep going increases. Alternatively, when we consistently measure the gap, it’s the opposite—we find ourselves discouraged and unmotivated.

When we focus on the gap we are faced with the enormity of the challenge and all that lies ahead—seeing how far we are from achieving it. For one of my clients, whose mission is preparing African youth for meaningful livelihoods, a gap mindset would mean putting their attention on the millions of African youth that they haven’t touched. A gain mindset allows them to continue to be inspired by their mission and celebrate the number of youth they have reached, the innovative new programs they have launched, and the ways they have worked together in often challenging contexts. They can maintain their commitment to the ideal because they are celebrating their accomplishments. If they were to turn their focus only to the gap between the ideal and the work that is left to do, the mission itself could become a source of discouragement. When we are in the gap mindset, we end up feeling that we’re failing and experience mostly frustration and disappointment.

We can get caught in the gap mindset because we mistake it for a pursuit of excellence and think we’re letting ourselves “get off easy” if we focus on the gain. I know there’s a voice in me saying exactly that, even after having spent a couple of years consciously working on and even teaching this framework. So, even though this framing makes sense, it can be challenging to adopt. The gap mindset can sit below the surface and is at times almost outside of our awareness. Adopting a gain mindset doesn’t happen just because we read or hear about how much it matters— it’s a practice of paying attention to and consciously shifting to the gain if we find ourselves drawn to the gap. It begins with the practice of noticing where we are.

Being in the Losses

Possibly my favorite podcast of the last couple of years was an episode of Econtalk. Russ Roberts interviewed Annie Duke just after she published the book Quit. Duke posits that in our society we overindex Grit and don’t exercise Quit enough—to our detriment. We need the muscle to do both and the discernment to know when to invoke each. As part of the talk, she speaks of the cognitive state of “being in the losses”—drawing on the work of the economist Richard Thaler:

So, if you buy a stock, the mark is going to be the price that you bought it at. And, if you're below that, you're 'in the losses.' If you're above it, you're 'in the gains.'

So, that would be on an actual ledger, right? On an actual balance sheet. But, we have this mental accounting that occurs, which gets distorted. If I buy a stock at 50 and it's trading at 40, both on my physical ledger and my cognitive ledger--my mental accounting--I'm in the losses in both.

But, if I buy a stock at 50; it goes up to 75 and is now trading at 60, on my actual physical ledger, I'm in the gains $10. But, in my mental account, I'm in the losses $15 because I'm 15 short of 75 now. Right? Okay? So it doesn't matter that I was up 10.

We don’t like to close mental accounts in the losses. One of the stories that Duke centers her book around is the 1996 Mount Everest disaster when many climbers died because they kept going even when they knew that they had already passed the point of the day when climbing would be safe. She makes the point that they couldn’t see that they had climbed 29,000 feet and could only see that they had not climbed the last 300. This commitment to the “ideal”, the need not to “be in the losses,” was so great that they took risks that resulted in their deaths. A gap mindset can not only be harmful to our psyches but also puts us in real danger.

Russ Roberts, also an economist and the host of the podcast, challenges Annie Duke—with the one potential problem with the gap and gain frame:

If you start off to climb Everest or run a marathon and say, 'Well, I'll just get as far as I'm comfortable and I'll try to get far and whatever it is will be gravy. If it's five miles, great. If it's 13.1, I'll be proud. Twenty would be wonderful. And, if by some chance I finish, 'Oh that's nice.'

You don't get very far. Often, that we feel--at least, maybe it's wrong--but we feel that if we take that approach, we're going to cheat ourselves. We're going to quit too soon.

Annie Duke’s response is that goals can and should be motivators—aspiring to the ideal is not a problem. It’s when they become the only way that we measure ourselves that they become the problem. She doesn’t specifically talk about adopting a “gain” mindset—but it strikes me as a good solution to the problem of fixation on the ideal. If we really can’t do those last few miles (she shares the story of a marathon runner who kept going with a broken bone causing even more damage to her leg,) we can still celebrate the 20 we ran or we can plan for another run. And if the goal inspires us to work a little harder and get to the finish line—that’s great.

The great thing about goals is that it sets a finish line and it gets you to continue to run toward it even when it's hard. The bad thing about goals is that it sets a finish line and it gets you to run toward it no matter what. Even when your leg is broken.

Duke points to something else that Thaler talks about, that ideals can actually prevent us from moving towards what we desire. If the only success we can have is by achieving an ideal, we might never start things that are worthwhile.

Because as he [Thaler] said, if the only thing that is success is getting a gold medal in gymnastics, why would you ever take your first lesson?

So, as you reflect on the year that was and look ahead to the one that is shortly beginning, think about where you are putting your focus and energy. How are you using the ideal? As a motivator or as a punishment? Where is holding onto an ideal getting in your way? Take some time to really look at what you have done this past year. Celebrate it, appreciate it, and be motivated by what is possible. And when you catch yourself in the gap, notice it and shift. It gets easier to do this every time we make that shift—and it’s a path to feeling better about ourselves as we now are and powerfully orienting us towards what’s ahead.

Wishing you a peaceful holiday season!