To achieve your biggest goals, gain or maintain industry leadership, or attract wide brand recognition, it may be necessary to set stretch goals. These are audacious, scary, and almost impossible goals that inspire your team to go beyond their normal abilities to create novel approaches and solutions.
Stretch goals are aggressively ambitious and rarely achieved. When they are, the results are exponential, attracting rewards and opportunities and boosting your teams’ confidence. Stretch goals can move a team to new levels of competence and productivity. They improve employees’ mindsets and strengthen team bonds.
If you want to boost motivation among your team, stretch goals just make sense. Setting goals are associated with increased self-esteem and autonomy, while a study by The American Society for Training and Development (ASTD) found that the probability of completing a goal increases by 25% if you consciously decide to work towards that goal. Research has long indicated that setting goals is associated with success, so it should be a priority of your team to focus on them.
However, if not managed correctly, stretch goals can create a disconnected work environment and demotivate employees. As a leader or manager, how you set and communicate stretch goals to your team is critical.
But what is a stretch goal? How do you benefit from them while tackling their challenges? This article defines stretch goals and explains how to get the best results from them in your organization. Let’s get started.
What is a stretch goal?
A stretch goal is a high-effort and high-risk goal. It is intentionally set above normal standards to attract exponential rewards, opportunities, and experience.
Stretch goals are not expected to be achieved one hundred percent. They are set to inspire growth and counter complacency in teams. When a stretch goal is achieved, it’s recognized as high performance. When it’s missed, it should not be judged as low performance. Stretch goals are deliberately set out of reach. Achieving a substantial fraction puts your company ahead of peers and teaches your team valuable lessons.
What are the benefits of stretch goals?
If a stretch goal is not expected to be achieved, why then do we set them? Are we setting our teams up for failure?
There are several reasons why stretch goals are beneficial. Regardless of the outcome, they breathe new life into uninspired work environments and challenge teams to create better results.
It’s best to set stretch goals alongside regular SMART goals. The juxtaposition between the stretch and SMART goals creates direction for your teams, clarifying the organization’s vision, roadmap, and minimum targets for employees.
Here’s an example of the difference between SMART and stretch goals:
- SMART goal: Increase revenue by 20% in the next quarter
- Stretch goal: Increase revenue by 500% and become a European market leader in four years
Your SMART goal is specific, measurable, achievable, realistic, and time-bound. Your stretch goal is grand and calls for rethinking current processes and solving more expansive problems for your market.
Your teams can see the company’s long-term vision, what peak performance looks like in the short term, and how their role contributes to it.
Other benefits of stretch goals include:
- Stimulating peak performance in employees and encouraging giant leaps of innovation across the organization
- Inspiring more commitment, creativity, and effort from team members, birthing new ways of doing things, and discovering hidden talent
- Encouraging your teams to rethink how they work and leverage available resources
Inspiring employees to try new, out-of-the-box methods to solve old problems
- Increasing your organization’s chances of success. Even when you miss the stretch targets, you’re likely to achieve more than you would have without them
- Providing a strategic way to control and impact our environments, although many elements are out of our control
- Keeping teams aligned, improving productivity and collaboration as everyone knows the markers and their importance
- Adding insight and managerial foresight to the executive team, helping to make better decisions for the organization’s future
- Creating opportunities to chart exciting and proactive paths for your teams and organization
What are the challenges of stretch goals?
Despite their many benefits, the very nature of stretch goals brings many challenges, including:
- Your stretch goals may be too vague and ambiguous, leading to a disconnection from the teams working to achieve them. Clearly articulating your goals is crucial as this informs the metrics, tasks, and activities managers break the stretch goals into.
- Stretch goals provide employees with motivation, but not the required skills. Just because you set goals and your team is aligned doesn’t mean they immediately know how to tackle the work. Stretch goals do not provide employees with the ability to execute.
- Outlandish stretch goals can cause frustration with high-performing employees and teams. When teams that usually exceed their targets find themselves behind and unable to catch up, they may become frustrated, reducing productivity and morale even further.
- Setting stretch goals may only positively impact employees pursuing them for the first time. Employees who have been involved in the previous pursuit of stretch goals may be uninterested in new moonshot goals.
- Failure to meet stretch goals can lead to a crisis of confidence and low employee engagement. If there’s immense, unrelenting pressure to achieve these goals, employee dissent may spread.
- Stretch goals may cause tunnel vision in teams and managers. They may become fixated on the measured outcome of the stretch goal and lose sight of what drives the organization forward. This happens if your goals do not fully align with your company vision or product roadmap.
- Lofty stretch goals may cause unethical behavior in employees, leading to negative consequences for the company. Studies show links between ambitious goals and cheating in academic and professional settings. When employees are up against the wall, they may try unethical means to hit their target by any means necessary.
The stretch goal paradox explained
The stretch goal paradox shows how stretch goals are often misused. Organizations that could most benefit from them rarely use them and businesses with less chance of success set them, leading to failure and team demoralization.
A much-cited Harvard Business Review article on the stretch goal paradox explains that stretch goals are most likely to work when an organization or team is on a winning streak with recent good performance and high employee morale. When these winning organizations also have slack resources to expend on the stretch goals, their chances for success become higher.
On the other hand, companies on a losing streak are not in the right place or emotional space to tackle stretch goals, especially when resources are tight and the organization needs to cut costs or make money urgently. Employees in such fragile organizations may snap under the pressure of stretch goals or resort to unethical means to achieve them.
Though perfectly positioned to take advantage, companies with recent good performance may become satisfied or complacent with their market position and feel no need to set ambitious stretch goals. Inversely, companies on a losing streak, who are least likely to succeed, often set lofty stretch goals, leading to high-pressure, sometimes toxic work environments for their teams.
It is essential to be aware of employee morale when setting stretch goals. In the right environments, stretch goals inspire workers to exhibit optimism, attract opportunities, and reach new heights. In deflated teams, stretch goals may seem like threats, causing employees to grasp for quick fixes and exhibit fear or defensiveness.
How to set stretch goals
Stretch goals should focus on developing original and innovative approaches to complex challenges, and not necessarily lead to longer hours at work. They should inspire teams to try new things and think beyond the standard.
When setting stretch goals, start by asking open-ended questions like:
- What is the best possible outcome you can imagine?
- How can you accelerate the process to achieve this outcome?
- How can your team improve current work processes?
- How can the company improve?
- How can employees create maximum value?
- How can organizational resources be used best?
- How can your products bring more joy to your customers?
- How can your company positively affect your industry and move the needle?
To set your own stretch goals, start with a simple template like the one below, which ties in with our open-ended questions and can help you to more clearly define your goal.
- Q. What is my ideal outcome for my time in this role? What is the best-case scenario for me and my team?
- Q. What can I do in my current role to move towards this scenario?
- Q. What would I need from my team to achieve this goal?
- Q. What would I need from my wider organization to achieve this goal?
- Q. What are my next steps towards this goal?
These questions help you think widely and come up with an ideal roadmap. Keep in mind that you may not achieve your stretch goals, but they serve as a picture of the future your company is working towards.
Before you set a stretch goal, remember to consider your organization’s position regarding:
- Recent performance: If your team recently had a win, you are in a good place to strive for more audacious goals.
- Available resources: If your company has spare resources to allow for little margins of error, you’ll get better results from setting stretch goals.
More tips for setting stretch goals
Once you’ve confirmed your company’s position and gotten enough answers to focus your stretch goals, follow the tips below to increase your chances of setting impactful targets.
- Use ranges for goals, not single points. Set stretch goal metrics as ranges, not fixed, single points. Setting ranges helps to reduce employee anxiety and provides options for tackling the stretch goals. Focusing on a range gives managers and teams room to stretch their performance with less pressure.
- Allow autonomy for teams and employees. Leaders may set stretch goals, but it’s best to leave it up to the teams to figure out how best to achieve them. When employees have autonomy, it liberates them to use their specific knowledge and expertise creatively.
- Break your stretch goals into SMART goals. Stretch goals are great as long-term goals and an aperture into the company vision. To effectively implement them, break them down into smaller SMART projects and tasks. Use work management software like Wrike to assign tasks, collaborate, and track results.
- Allocate time. Give your team a shot at success by allowing enough time to tackle the stretch goal. Include slack time for trial and error.
Examples of stretch goals for employees
Depending on your industry, organization size, and market position, stretch goals for your employees would vary. Here are some examples of stretch goals for employees:
- Fast-paced marketing team: Reach one million marketing-qualified leads within the next year and develop a world-class marketing curriculum to train and certify young marketers
- Digital marketing team in a seed-stage B2C startup: Build a social, professional, and personal brand that attracts a global audience and commands ≈40% engagement every week
- Software developers at a legacy organization: Refactor the entire backend code and reduce technical debt by 80%
- Operations manager: Cut down customer waiting time from 1.5 hours to ten minutes
- Project manager: Develop a system to maximize cross-functional collaboration and achieve 100% project success
Can stretch goals go into OKRs?
Adding stretch goals to OKRs (Objectives and Key Results) is tricky as they can be so ambitious that employees do not believe they can achieve them. However, in the best cases, moonshot goals inspire teams and create an exciting work environment.
The key to using stretch goals in OKRs is communicating the rationale and expectations behind them and the thresholds for success. For most companies, success means achieving 70% of the objectives — fully reaching the OKRs is acknowledged as extraordinary performance. When aiming high, even failed goals result in substantial advancements.
Be realistic when adding stretch goals to OKRs. Note what’s possible and what’s not. Keep the key components of OKR goal-setting in play:
- Objectives are what you want your team to accomplish
- Key results describe how you accomplish it
Can a business have a stretch goal?
There are many examples of businesses that set and achieved audacious stretch goals. There are also examples of many that failed.
The time it took to develop new products at Motorola famously fell tenfold in the 1990s after the company mandated stretch goals throughout the organization. Stretch goals created a culture of excellence at Apple, caused ethical issues at Wells Fargo, and led to failure at Yahoo.
For the best results, managers should define strategically aligned metrics and ethical guidelines to achieve stretch goals. Here are some examples of stretch goals for businesses:
- To be in the top 5% in its industry, based on brand recognition and customer loyalty
- To be the fastest in terms of customer fulfillment and satisfaction (e.g., fastest Wi-Fi connection)
- To become one of the best places to work globally, based on attracting and retaining the best talent
- To be in the top three green corporations, based on the carbon emission ratio in your specific industry
- To reduce customer service complaints by 90% by improving core product and user experience
Who should set a stretch goal?
Founders, executives, and managers can set stretch goals. However, teams and employees should be given autonomy in brainstorming, experimenting, and innovating to achieve these goals.
How to motivate your team to reach stretch objectives
Teams may become complacent and resistant to change — especially when a company is successful and everything is working as it should.
If you’re in this situation, motivate your team by reframing your company’s future in terms of potential losses, instead of continued success. Emphasize what could happen if you don’t take action. To keep your team challenged and invested in your stretch goals, it’s important to:
- Define metrics and give a clear picture of what achieving the stretch goal would look like
- Encourage focus on excellence and innovation and less on fixed, financial targets
- Encourage employees to see things from new perspectives where the only way forward is to tackle your stretch goals
- Imagine yourself as your competition and encourage your team to come up with solutions to your organizational weaknesses
- Celebrate small wins to build momentum and commitment
- Foster a learning culture that allows your team to take on more ambitious goals