How to Use Stretch Goals to Increase Innovation
— April 9, 2018
Have you ever been asked to define your own stretch goals? They’re still remarkably popular, despite a steady stream of articles and research that debunks the value of this approach altogether. It’s not so much the concept that falls to the ground, but rather its execution: Leaders require too much stretch, while providing too little support for advancing the goals themselves.
How Stretch Goals Fall Short
In the typically ineffective use of stretch goals, managers ask employees to hit unrealistic targets, causing employees to feel like they’re under threat. Some employees may become rigid in their thinking out of fear of falling short, while others may take unnecessary risks to deliver on the unrealistic goals.
That’s what I heard from an operations leader at a client company: “They say we’re going to have to double our output. We could definitely handle 30 percent to 50 percent growth if we had a lot of extra support, but 100 percent more is so ridiculous that we’re going to have to do some very weird stuff to even have a shot at claiming to get close. And I don’t know what that will mean for the year after.… Oh well, it’s not up to me.”
Stretch goals can also cause employees to underperform. At another client company, a particular senior exec would dictate the upcoming year’s stretch goals to his team, and direct them to develop corresponding financial and implementation plans. The team would respond with a variety of self-protective and practical caveats and disclaimers. The leader accepted these comments in the draft plans, but would edit them out of the final version of the goals that he presented to the board and ownership.
When the stretch targets inevitably couldn’t be met, the leader treated it as the staff’s failure rather than his own. Not surprisingly, his team’s financial performance consistently ran from lackluster to dismal. Over time, bad behavior increased within his team as he lost credibility — first with his team, and eventually, with his leadership as well.
Create Stretch Goals That Stretch — Not Break — Employees
And yet there’s a way that stretch goals can help you make real headway toward a complex, challenging outcome. People can get energized about meeting targets outside their normal reach when they’re presented with an inspiring vision — and receive leadership guidance that helps them feel personally committed, mutually supported, and trusted by that leadership.
Instead of treating stretch goals like a blunt object and forcing employees to try to reach an unrealistic outcome by any means necessary, you can use them at any level of the company, including in your own work, as a powerful tool for innovation and creativity, à la John F. Kennedy’s moonshot.
Imagine using a stretch goal as a prompt to create a series of new scenarios. For example: What are all the potential ways we could double production within the year? The operations head might consider all possible alternatives, from doubling headcount to buying new manufacturing equipment or buying widgets from an external supplier, even to the extent of acquiring a competitor such as the ABC Widget Company. Evaluating all those courses of action might turn up pockets of unused resources or new, more efficient methods.
Stretch and Expand Your Thinking
When you feel you’ve been asked to deliver on unrealistic or inappropriate goals, consider these questions for your organization or work group.
Asking “What if…” lets you think about what it would actually take to hit the proposed target. Perhaps you still can’t meet the target, but you may gain insight that helps you come in at a reasonable level, make a smart counteroffer, or even turn things around through drastic action over the next couple of years. Once you detail the answers, you can assess whether the appetite exists for this kind of change to get the desired results.
- What if we opened new markets?
- What if we changed our sales process?
- What if we expanded our product line?
- What if we changed our pricing?
- What if we changed our relationship with customers?
- What if we eliminated low-return activities?
- What if we acquired a company that does the work we don’t do?
- What if we hired someone with fabulous expertise that we don’t already have in-house?
- What if we reassigned our people so they were all working on the thing they do best?
When you use stretch goals to design creative solutions and expand collaboration rather than spreading fear and negativity, you may be able to design practical thought experiments, prototypes, and new approaches. Then, not only will you have the opportunity to demonstrate to leadership that the employees are not the problem, you may find that you’ve initiated a cascade of innovations that are well worth rewarding.