67. The Psychology of Goal-Setting for $1mm Founders

January 14, 2026

When I ask founders and CEOs about their goals, some respond with excitement while others become tense. Those reactions tend to reveal far more about how someone relates to themselves than about the goal they're setting.

In this episode, I explore why so many ambitious entrepreneurs have a complicated relationship with goal setting and what's actually happening beneath the surface. Drawing from a 35-year body of research by Edwin Locke and Gary Latham, we look at how goals create standards that trigger self-evaluation and why that mechanism determines whether your goals energize or paralyze you.

Episode Summary:

This episode examines the psychology behind goal setting and why the goal itself is neutral. What matters is how we relate to the self-evaluation that goals activate. Through the lens of research and patterns observed in coaching, we explore why some leaders only set safe goals while others set fantasy goals that sound bold but lack accountability. Both are ways of protecting identity rather than building something real. For CEOs and founders, this episode offers a framework for understanding how your relationship with yourself shapes your relationship with your goals and your team's ability to achieve them.

Key Takeaways:

Goals Create Standards That Trigger Self-Evaluation:

A goal immediately creates a standard against which we measure ourselves
That standard triggers internal questions about capability and self-worth
The goal itself is neutral but our interpretation of it determines what happens next
This mechanism is present from childhood and follows us into adulthood

Healthy vs. Unhealthy Self-Evaluation:

Healthy self-evaluation interprets mistakes as data and believes improvement is possible
This leads to studying more and seeking support and staying engaged
Unhealthy self-evaluation interprets failure as proof of inadequacy
This leads to anxiety and avoidance and procrastination and giving up

Growth Mindset vs. Fixed Mindset:

Healthy self-evaluation aligns with Carol Dweck's growth mindset
Believing improvement is possible keeps us engaged with our goals
Fixed mindset leads to reduced effort because we believe we cannot change
The healthier your self-relationship, the bigger goals your nervous system can hold

Two CEO Traps:

Safe goals protect self-image by avoiding embarrassment or disappointment
The company maintains momentum but never builds new capacity
Fantasy goals sound bold but have no real path or accountability
Both are ways of managing emotional risk rather than maximizing growth

What Teams Need to Achieve Bold Goals:

Team members must believe the goal is attainable
They need to see a clear path forward
Feedback must be received as information rather than judgment
CEOs must create psychological safety for bold goals to be achieved

Episode Highlights:

[00:00] Welcome and podcast milestone recap [02:30] Spotify Wrapped highlights and gratitude [04:00] Why this episode exists [05:30] Research foundation from Locke and Latham [07:00] How goals create standards and trigger self-evaluation [08:30] Children learning math as an example [10:00] Two paths of self-evaluation [12:00] Connection to growth mindset and fixed mindset [14:00] Reflection prompt on your relationship with self-evaluation [16:00] Goals as psychological instruments for CEOs [18:00] Why goal pressure changes as you grow [20:00] Trap one: setting safe goals to protect self-image [22:30] Trap two: fantasy goals that avoid accountability [25:00] Cautionary story about goal setting and psychological safety [28:00] CEO responsibility to create the right environment [30:00] Pattern of delaying hard upgrades and senior hires [32:00] Key CEO self-inquiry questions [34:00] Research-based performance conditions for teams [36:00] Closing thoughts

Memorable Quotes:

"A goal creates a standard. And that standard triggers self-evaluation."

"The goal itself is neutral. What determines whether it motivates or paralyzes us is our relationship to that self-evaluation."

"Goals don't push you. They reveal you."

"The healthier your self-relationship, the bigger goals your nervous system can hold."

"Do your goals require you to become a more evolved version of yourself?"

"Goals improve team performance only when team members believe the goal is attainable, see a path forward, and receive feedback as information rather than judgment."

Resources Mentioned:

"Building a Practically Useful Theory of Goal Setting" by Edwin Locke and Gary Latham
Carol Dweck's research on Growth Mindset vs. Fixed Mindset

Connect with Carolina:

Website: carozuleta.com
LinkedIn: linkedin.com/in/carolinazuletacoaching
Book a consultation: carozuleta.com/consult

Subscribe & Review:

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Episode Transcript

Welcome to Visionary’s Pursuit, a podcast where we explore what it takes to turn your bold and inspiring ideas into reality. I'm Carolina Zuleta. I'm a life and business coach and your host for this podcast. I'm thrilled to have you here.

Hi. Welcome back. This is episode 67 of the Visionaries Pursuit Podcast. How are all of you? I imagine that by now, you know, second week of January, we're all back in our business getting in the groove of things, connecting even more to our goals and starting to work to make them happen.

Last year for the first time Spotify created a wrapped, you know, the ones we get as listeners, well, they do the same thing for podcast creators, and there's some stats that we thought were very cool, so some of the highlights, you know, our total new audience grew 182%. We reached 18 countries. I think that's incredible. I am so excited that I get to sit in my house, talk about things that I'm passionate about, and , you in 18 different countries get to listen to it. And we also got three awards, one for a marathon show. Which is that people listen for long time to our episodes. Two talked about show, which means people are commenting and engaging with our episodes. And three, most shared show, which means you are sharing our episodes with a lot of your friends and colleagues and coworkers and business partners.

And I just wanna say thank you so much, because you commenting on the episodes, sharing them with your friends, colleagues, business partners, it's the support we need to keep on going.

So if you haven't done that yet, please give it a rating. Follow it. It really goes a long way, and thank you so much for tuning in every week.

Alright, so now moving to today's episode. Actually I have to confess, I wasn't planning on creating another episode about goal setting, but I've been digging a little bit into some research about goal setting and here's why. When I'm coaching people, I start finding patterns and I see them in my clients.

I see them in myself, and I also see them in my friends and family members. And I start capturing those patterns in my head and I start identifying them when they happen for someone else. Which I think it's amazing and coaching for thousands of hours that's the gift I received.

And I also love when I can go to the research and find a scientific explanation for the patterns that I'm witnessing. So I'm gonna first explain to you a little bit about. Pattern or the behaviors I see. And then I'm going to tell you how this applies specifically to you if you're a CEO or you're a leader within your company because I think keeping in mind what I'm going to share is really going to set you up for creating the best type of goals and for helping your team follow through with those goals.

So for context, in case any of you want to go and look into the research, it's a paper called Building a Practically Useful Theory of Goal Setting. And this is a 35 year review of goal setting research and this research was done by Edwin Lock and Gary Latham. So first I wanna explain the research in a very simple way.

So what they found in the research is that when we set a goal, we immediately create a standard for ourselves and that triggers a self evaluation. For example, think about when you are in school, you know, I have kids that are young, so I see it happening with them. They're learning math and they're learning it through games and Legos and worksheets with colors and drawings, and it's all fun.

And then they start second grade or third grade, and all of a sudden they have a test. And the test, they know that to pass the test. They need to get an A or A or a B, for example, and that sets a standard for them that says, if I get an A or a B, I succeed. If I don't get an A or a B, I fail.

So before they got the test, that is the new goal, right, they were learning math for fun. There was no judgment about it. But the moment there is a test and the test has a score, and that score means you pass or fail immediately you have something to measure yourself against, right? So you immediately go into what these researchers call self-evaluation, and what your brain starts saying is, Hmm, how am I doing compared to the goal? Am I good at this? Can I get an A or a B? What does accomplishing those goal or not accomplishing this goal, say about myself?

So basically what the goal does is it makes you look at yourself and compare. Now that is neutral, right? That's like setting a goal, creating a standard, triggering self-evaluation. The interesting part here, which is the pattern I had seen with my clients is how we relate to that self-evaluation.

If we have a healthy perspective on the self-evaluation, and again, going back to the kids that are doing math, they can say, okay, I'm going to do this practice test and I'm gonna get some answers wrong. That doesn't mean I cannot get an A B, it means that there's things that I don't understand yet, but I can ask for help.

Or you know what? These mistakes I've made in my practice are pointing to those things that I need to work harder on. Trying is safe. Making mistakes is safe. And when we have a healthy relationship with self-evaluation, what we do is we study more, we ask questions, we keep going. We find motivation within ourselves to continue pursuing that goal.

The other option is that we have an unhealthy relationship with our self-evaluation. This is all of us who, when we're self-evaluating, we think things like, if I don't get an A, I'm bad at math. If I fail, it means I'm stupid. I don't want to fail because I don't wanna feel bad about myself.

And when we're having these type of thoughts, what that triggers for us can be anxiety, worry. We might start avoiding studying because we don't want that uncomfortable feeling. We can sometimes give up, we can procrastinate. So the relationship to the goal is not one that is motivating us. It's one that is scaring us and hurting us.

I think this relates a lot to Carol Dweck's research around growth mindset. So if we have a healthy relationship to our self-evaluation, it means we have a growth mindset, which tells us, you know what? I don't need to do it perfectly from the get go. I get to make mistakes and learn and do better through time versus a fixed mindset that tells us I can't learn, I can't improve. Right? What I know right now is what I'm going to know forever, and I will never get better at it. So why would I even try?

I want you to take a moment and pause, and ask yourself, what is my relationship with self-evaluation? Do I start trying things and if maybe I'm failing, I tell myself a story that encourages me to try again, or am I so hard on myself that I feel defeated, I procrastinate. And I hurt inside, I feel shame.

How are you self-evaluating? When at the beginning I told you that I saw a pattern was this, that the people who love to set goals have an incredible relationship with themselves. They are encouraging, they're kind. They do assess and they do look at where things went wrong, but not in a way to determine their self-worth. Instead in a way to see how they can continue growing. So I believe that the healthier your relationship is with this self-evaluation, the bigger goals you can set and the more your nervous system will allow you to hold those big audacious, bold goals.

So remember, like goals alone are not pushing you forward. What they're doing is they're holding up a mirror and the way you look at yourself in that mirror determines if you're moving forward or you're getting stuck.

So now let's talk about what happens with this theory, or how do we apply this theory when we are at a CEO level.

When we look at business books and we're talking about business goal setting seems very neutral and purely strategic and most CEOs look at it that way. You know, we're gonna set a revenue goal, we're gonna launch this product, right? It's like, okay, this is the strategy of our business. But really what's happening and what we need to be very aware of is that goals are psychological instruments, not just business tools.

Why? Because of what I just explained, right? Because they trigger a standard and they trigger a self-evaluation. And not only for you as the CEO, when you set a goal for your company, these same process gets triggered for everyone in your team.

Okay, so first let's talk about you as a CEO. You are a leader. You're successful. I know you're listening to this podcast it's because you've already achieved incredible things with your business. And you still have a human brain like me and everyone else that's listening to this podcast. So we need to pay close attention to what that human brain is doing as our businesses grow.

When you are a new entrepreneur, I've seen some people who are very encouraging of themselves, who are very graceful when they make a mistake, when they're scared about doing something, when they maybe don't reach those first goals.

And those people are the ones who continue growing their businesses to millions. And then there's those that are so scared because their self-worth is so attached to being successful in that first year of business, that I believe that's why a lot of people quit. When they missed a mark, when they don't perform how they were expecting to perform, then it's so painful personally that they quit.

But the other pattern I've seen is when you've grown your business to, let's say, a million dollars of revenue or more, all of a sudden your relationship to goals, that started as, okay, I can make mistakes. Let's see what happens. Let's try this. Starts getting more tied to your identity, to your self worth. Because you've evolved and now you're the CEO who has been successful. There is more to lose. What if I make a mistake? What if we fail? And we've always had a track record of winning, and that's when the self-evaluation becomes more critical.

So what happens when you as A CEO are attaching your goals the results of your goals to your self worth? Going back to patterns, when I start working with A CEO, whose self-worth is attached to the results of their goals and their business, they go one of two ways.

One way is they set safe goals that will help them protect their self image. Or they set fantasy goals, which are goals that are not realistic. But make them sound ambitious and creative and really don't hold them accountable to the results.

My intention with this podcast is that you can notice if any of these patterns are happening within you. So you can adjust or you can bring them to coaching because those subtle thoughts that we have or those beliefs are the ones that end up holding us back or taking us to failure with our business.

For example, one of the things I hear some CEOs say is, okay, you know what? We're gonna aim for five to 10% growth this year because I don't wanna stress the team because I prefer that we're steady and predictable, and that sounds so reasonable.

But often what's really happening beneath that is that unconsciously we are asking ourselves, what is a goal I can hit without risking embarrassment or disappointment? So when we attach our goals to our self-worth, we choose easier standards. Another thing I've seen is when CEOs start playing defense against offense.

I've read books about big CEOs, about big businesses that started failing because they were playing defense instead of ovens. For example, they start prioritizing cost control over growth investment. They start avoiding new markets or making bold offers, or they often say, well, it's not the right time.

Again, you know, it can sound reasonable. We don't wanna rock the boat, things are working well. Why would we change them? But if we look in coaching, which is the beautiful thing, I get to look underneath that.

Often some of the fears I hear are being visible if they fail, fear of actually taking a real close look at their business and realizing that their current model can't scale. When goals feel threatening to our identity, we start avoiding risk.

Here's another problem. When we set these goals that are achievable, we're kind of maintaining the momentum from the past you are not creating any structural growth for your business. Yes, it is predictable. Achievable. Maybe it protects your ego, but the organization is not building any new capacities. Leaders are not finding more evolved versions of themselves. Growth inside a company only happens when we are forced to use new strategies.

In last week's episode I was talking about how doing goals have to be accompanied by being goals, meaning you have to also have a plan for the beliefs you have to let go of the new habits you need to adopt, the ways you need to evolve as a leader and as a human being in order to achieve those goals.

But if you listen to last week's episode and you told yourself, I don't need to change anything about mean in to achieve those goals, that means that you're probably choosing goals to protect your self identity.

If the goals you're setting are not requiring you to become a more evolved version of yourself, you're actually not growing as much as you could be growing.

And another common reason why I CEOs not setting bigger goals, but staying in the safety zone is because they really don't wanna take a closer look at their team. They don't wanna see the gaps they have. Instead they tell themselves, well, the team isn't ready. We'd have to change too much. It would create a lot of tension. I remember talking with one CEO last year and she was telling me, listen, we've already let go X number of people and in order to achieve that goal, we would have to let go more people and we don't wanna disrupt the culture, which right, again, it sounds good, but it means that you know, you are keeping people who are not the right people to grow the business.

Because my intention for this episode is for all of you to take a pause and look at the goals you've set and ask yourself some questions so you don't fall into these traps. Ask yourself, are the goals that you set this year designed to expand what's possible? Or did you create goals that are protecting the way you feel about yourself? Often under stretching or setting smaller goals isn't a strategy it usually is a way to manage your emotional risk. Okay, so the other pattern that I've seen, CEO stake is create these big unrealistic fantasy goals.

And listen, I'm all about you setting bold, audacious goals. I love that. Goals that you think i'm not sure exactly how I'm going to get there, but what I'm talking about is these fantasy goals. That are these, but what I'm talking about are these fantasy goals.

For example, I remember some years ago I was at a networking event and I met this woman who was starting her business. And when I asked her about her goals, she told me that she wanted to reach a hundred million dollars in revenue in the next three years. But when I asked her how she was planning to do that, she had no clue and not in a way that she had some hypothesis, right? Because a lot of the times what we do when we have these big, audacious goals is we create a hypothesis of how we think we are gonna get there. But it was more that really she was living in this fantasy, something so big that she wasn't holding herself accountable to a real plan.

So why do we do that as CEOs? Why do we create fantasy unrealistic goals? Again, one is because we wanna sound ambitious, but it's so big that we really don't have to face looking at the trade-offs we would have to make right now.

I've seen CEOs create these huge goals and then delegate to their team so they can outsource the how and the emotional load, and that doesn't work.

Let me tell you a story of a company that I observed this happening to.

This is a beautiful company. They were growing well, they had been in business for several years and one year the CEO decided that the next year they were gonna double their revenue and basically gave the directive to the COO to double the revenue. Now the COO had never done sales or felt like they knew how to really get to that huge goal, didn't feel prepared and right, the COO is also a human being, so this goal created a standard for them and created a self-evaluation process. And in the self-evaluation, the COO started. Telling themselves, I haven't done sales. I don't know how to do this. I actually don't believe the product we have can be up sold to actually double the revenue.

So when the COO went to talk about this with the CEO, the CEO didn't react very well and the whole conversation became very personal about the COO's capacities. So that triggered even more negative self-evaluation and feelings of not having the support, not having the training, not having the resources to be able to accomplish this goal. Through time the communication that had always been so wonderful between the CEO and the COO, It started deteriorating. Instead of talking every week like they used to, the conversations were spaced out. Every time they were gonna meet the CEO felt frustrated. The COO felt scared. They really never got to solutions or collaborations. And if the COO was the person in charge to accomplish this goal and their self-evaluation was negative. What ended up happening is this person started procrastinating. It started not doing the works, holding back, being incredibly anxious and stressed, and end up leaving the company.

The problem is how that goal was established and the structure or the system, the CEO created to have conversations with his team, especially with the COO.

So I want you to pause here and ask yourself if the goals you are setting are bold but that you have a belief that there's a path to getting there or there's such a big fantasy that you're disconnecting from them. I want you to notice and ask yourself, what is the environment I'm creating for the team to be able to achieve this goal?

Am I giving them the training, the tools, the support, the space to make mistakes? Am I creating psychological safety so all of us can work towards this big goal? Because if not. Then you might set the goal, but you're not gonna make it.

One of my other clients who also wanted to double, I think almost like three x the revenue one year to the next. One of the biggest concerns was that the team was not at the level to be able to three x.

So this CEO knew that they had to hire more senior people, experts, people who had a lot more experience, who were more expensive, and the CEO procrastinated for months to hire these people. When we looked at it, there were two fears there. One was the fear of risking money, which I think it's tied to your belief that you can actually three x and two, which was more interesting, and again, so human because I think all of us can relate with this, was the fear that if I bring people who know so much, they will notice my weak parts as A CEO. They might start thinking that I'm an imposter, that I shouldn't be here. And really, it's not even about what those people think. It's more about our self concept, about us believing that we need to have all the answers or do what we need to be better than anyone we hire in our team to protect our self image.

But I hear incredible entrepreneurs like Richard Branson or jJ Abrams, the director of Star Wars, and they both talk about surrounding themselves with the best of the best. I even remember in an interview with JJ Abram, they asked him if he was scared of doing these new versions of Star Wars, because Star Wars has all these fans that are very attached to how things should be, and the risk of failure was very big. And his answer was no. Because I have the best team, the best people for each job, and I know that all of us together we're gonna make a great movie.

I want you to take a moment and ask yourself, do I have the right people in place to accomplish these big audacious goals? And if the answer is no, I really want you to be very honest with yourself. Why not? What is the work that you're not wanting to do? What are the difficult conversations you don't wanna face? What is the self-image you're protecting?

And this is what I help you do in coaching. What I love about the relationship I have with my clients is that we can look at all these human beliefs, thoughts, behaviors with so much compassion because that says nothing about your self worth or your capacity. It just means that it's your brain trying to protect you.

Another interesting fact I read in the research is that goals only improve the performance of your team when the people in your team one believe the goal is attainable. Two, see a path forward, and three, receive feedback as information and not as judgment. So your job as a CEO is to take care of your relationship to your self-evaluation, your relationship to goals, and be able to sell the vision of why that goal is attainable to your team. Show them the path forward and make sure the feedback you're giving to them is constructive. It's helping them grow and become better and not judgmental and critical about who they are as a human being.

I'm looking forward to seeing what my clients are gonna achieve this year, what results we're gonna create together, and also from meeting new founders and new CEOs and helping them cultivating a very positive relationship with themselves.

That's all for today. Thank you for listening, and I hope you have a wonderful week.

If you're currently pursuing a big, bold idea and would love some support, let's talk. In my coaching program, I'll teach you how to manage yourself, your own thoughts and emotions. as well as your team and your money so you can turn your beautiful idea into a reality. Go now to carozuleta.com slash consult that is c a r o z u l e t a dot com slash consult and complete the form to book a complimentary call with me.

See you there!

67. The Psychology of Goal-Setting for $1mm Founders

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