Summary
Stretch goals are incredibly popular for individuals and organisations. But are they effective? It depends. This week we explore how to know when to set a stretch goal.
Transcript
Hello and welcome to episode 107 of the Leadership Today podcast where each week we bring research to life in your leadership. This week we explore how to know when to set a stretch goal.
Stretch goals are incredibly popular for individuals and organisations. But are they effective? Well, that depends.
The modern application of stretch goals can most likely be attributed Jim Collins and Jerry Porras. They coined the term Big Hairy Audacious Goal in their book Built to Last. The book encourages people to set extraordinary stretch goals. But, importantly, these goals are typically set across a long-term time frame of 10 to 25 years. By way of example, when Bill Gates and Paul Allen first started Microsoft they talked to each other about having a computer on every desk and in every home decades before that became reality. That all sounds great - I set myself or my organisation a Big Hairy Audacious Goal for 20 years into the future and chase after it. The problem is that people are applying this approach to one year goals, which was never the intent. Microsoft did not have a one or two year goal to have a computer on every desk - that would have been ridiculous. Instead they used that ambitious goal to draw them forward through years of steady progress.
Shorter-term stretch goals are not always right. The work of Sitkin, Miller and See is really helpful for us to understand when a stretch goal might make sense.
In their 2017 HBR article the authors outline two conditions that are important to consider before setting a stretch goal:
Recent performance. Are you coming from a recent history of success and performance, or of failure and underperformance? Recent success provides the mindset and motivation required to apply to the challenge. This is particularly important.
Excess resources. Do we have additional resources available that aren’t already committed? Is there some slack in the system? Stretch goals require committed resources, not just business as usual.
The perfect time to set a stretch goal is when you have recently been successful and you have available uncommitted resources. People will have the motivation, mindset and capacity to chase that stretch goal. Even if you have been successful, if you don’t have the required additional resources you are setting people up for failure.
But hang on - so if I don’t have recent success, are the authors saying I shouldn’t set a stretch goal even if I have available resources? Where there are available resources but not a recent history of success, the authors suggest running more modest experiments that you can afford to fail. Rather than setting stretch goals, it is better in these situations to work on quick fail experiments. Here you try new things that aren’t huge bets, and celebrate giving things a go. As these experiments begin to work, you will build that track record of success needed to then set stretch goals.
If you haven’t recently been successful and lack spare resources, then stretch goals are not your friend. Instead the authors suggest you should chase small wins - taking those small steps forward until you do have a track record of success. Then your people will feel more confident to reach out towards a stretch goal.
A stretch goal needs a recent track record of success and dedicated resources. Too often people set a stretch goal as a last gasp opportunity for redemption - that’s exactly the wrong time. So, yes, absolutely dream big for the 10 to 25 year future. But then consider the kind of goals you set based on your performance to date and the resources you are willing to commit.
I hope you found that helpful. As always, a link to the reference used is in the show notes.
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Have a great week.
Reference
The Stretch Goal Paradox by Sim B. Sitkin, C. Chet Miller, and Kelly E. See. Harvard Business Review (January-February 2017).