Should Stretch Goals Now Shrink?
Many an Enterprise salesteam uses stretch goals.
I first came across the concept way back in B-school. Although I don't recall that specific term for what were meant to be challenging goals. Going beyond the mere minor incremental percentage point YoY increase in targets. They certainly captured corporate budgeters' attention.
Then later early in my sales management days I came across software sellers that had to stand up in meetings and commit to a specifically outrageous item on their forecast. Known as their 'pledge'.
A little later, the BHAG become hot. Not so much a financial aim, but along similar lines.
Each idea purposely went farther than commonplace SMART procedures of goal creation.
I'm not such a big fan. For instance, when I've seen the 'stretch' take over as main focus, it doesn't end well. 120% becomes the new 100. Ambitious gets aggressive where unrealistic numbers erode performance.
There's even a warning in the so-called stretch goal paradox. As coined a decade ago in an HBR piece (see foot for their sample decision maker chart).
So I was intrigued to read an addition to this thinking, reported in The Economist; The pros and cons of stretch goals - Setting really tough targets encourages risk-taking, for good and bad.
This example line gives us the flavour; "before you rush out and tell everyone to double revenue by Tuesday or colonise Jupiter, a few caveats".
An Australian study ran (startup airline) simulations on E-MBA students.
"... tougher targets did lead to higher performance for a few firms, but that most participants either propelled their fictional airline into bankruptcy or, if things started to go wrong, changed their goals to focus on survival."
Imagine that trio of outcomes as a distribution curve.
Researchers list a number of trade-offs. Considering disruption - sometimes great, often disastrous - of radically changing the ways things are done. How 'stretchier' goals can ultimately demotivate. And signing off with this;
"The solution in most organisations is to have a blend of goals, some that must be hit and some that are more aspirational. If that sounds reasonable, it is."
