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If you want to save money the best way of doing so is to be focused and have one savings goal in mind. Research has found that those people who have several goals tend to save less because they are not so focused.
Marketing professors from the Rotman School of Management at the University of Toronto looked at savers in three different markets - rural India, middle income Canada and Hong Kong. Despite the range of incomes they discovered that multiple savings goals led to individuals “thinking about trade-offs between goals, rather than focusing on implementing their savings plan”.
In contrast, a single savings goal encouraged people towards a more action-oriented mindset and helped them to save more. Having just the one goal for saving worked particularly well when it was harder to save the researchers found.
In their paper, The fewer the better. Number of goals and savings behaviour, Min Zhao, an assistant professor of marketing and Dilip Soman a marketing professor suggest that their findings could well have repercussions for banks and financial advisors for example, that tend to advertise a list of reasons extolling the virtues of multiple saving. Such advertising messages with more than one goal, could well “backfire” they say and state that banks should revise their approach.
Where there are several goals - for example retirement, education and mortgage repayments - the authors suggest integrating all these goals into one abstract goal such as financial independence.
● It is a common perception that knowledge workers - lawyers, journalists and software engineers for example, rely on their experience and instinct to a large degree in decision making at work. Such work it is believed cannot be reduced to a formula or a set of practices because to some extent that knowledge is locked inside the head of the individuals concerned.
However academics on both side of the Atlantic have found that even creative work can benefit from “lean production principles”.
David Upton, a professor of operations management at Saïd Business School, University of Oxford and Bradley Staats, an assistant professor of operations, technology and innovation management at Kenan-Flagler Business School at the University of North Carolina say that creating rules and systems for workers can lead to increased collaboration and increased efficiency.
The authors of Lean knowledge work, published in the October 2011 issue of Harvard Business Review gathered information from almost 2,000 knowledge-intensive software projects, as well as interviewing knowledge workers. After examining the most often cited principles of lean operations they were able to focus on those that delivered real performance improvements, using what they describe as “an evidence-based, scientific approach for knowledge-based settings.
The pair’s suggestions include solving problems quickly and consistently and that tacit knowledge should be made explicit. In this latter point they say that some knowledge work can be “captured in protocol with no reduction in the quality of the work”.
Prof Staats accepts that some skilled workers will be sceptical and resistant to having information captured in this way and suggests that organisations spend time explaining the benefits, such as telling workers that it will give them additional time for more interesting work.
“Articulating what people do, and how and why they do it, enables the organisation to learn, to exploit best practices and transfer knowledge across the organisation, all of which contribute to its competitive advantage,” he says.