Author: Christina Sanders / Source: Lifehack
You may have heard of “big hairy audacious goals”[1] that are supposed to light a fire under your team and produce miracles.
If failed, these stretch goals become chained weights on the self confidence of your team. They demotivate and cause hefty stress.
However, if successful, profits will soar and your team will take greater pride in their work. The potential return on investment is huge.The name of the game is risk. Not the military conquest board game, but the idea of going big or going home.
Stretch goals can seem daunting and overbearing. If made too ambitious, they are impossible. If made too easy, they’re meaningless.
There is a careful balance required to create stretch goals that will motivate your team and propel your business.
The good of stretch goals
Stretch goals inspire you to dream big and reach new heights.[2] You can take risks and come out with new business processes, profitable verticals, or greater customer satisfaction. The possibilities are endless because the goal is to break out of your comfort zone.
DaVita, an already very successful company in the health industry, was able to go from $60 million to $80 million in savings within four years by creating such a stretch goal.[3] You can break limits and defy seemingly impenetrable borders.
Already successful companies with uncommitted resources are recommended to set stretch goals. Employees have high morale and are excited to accomplish more.
Motivation is key for stretch goals because they are naturally daunting. They are also often costly. They will require more people, time and effort than a regular goal would.
You can’t keep putting in the same investment and expect a magically larger return. Having uncommitted resources means you’re ready to put your money where your mouth is.
The bad of stretch goals
As with all goals, you are not guaranteed success. If your team does not reach the goal, they are more likely to become heavily demotivated, fixated on unhealthy risks, and prone to lying about their actual results.[4]
In 2013, Wells Fargo set a big hairy audacious stretch goal that backfired as stressed out sales representatives opened 3.5 million fraudulent accounts. Such unethical behavior due to stretch goals isn’t uncommon according to the Harvard Business Review.[5]
As mentioned above, if you’re not riding recent success and don’t have uncommitted resources, stretch goals may not be for you. Your employees don’t have high morale. They will struggle when you tell them that you’re going to accomplish an even bigger goal, after having just failed to meet a smaller one.
Without the extra resources to accomplish it, the desired results just aren’t feasible. If you have one factor, but not the other, a stretch goal is still risky. Your uncommitted resources could probably be put to better use until your company has better morale.
If they have high morale, but you don’t have the resources, then ride off of that morale until the resources accumulate. Don’t push your business in ways it isn’t ready for.
How to set good stretch goals
You’re motivated to create a stretch goal. Now, how do you create that goal and share your motivation? There are five crucial steps to follow:
1. Evaluate the past
Before setting any goal, deep reflection is required.
What are the current strengths and weaknesses of your company or team? How have they responded to goals in the past? What motivates them? What demotivates them?
This is an important moment to decide how you will carry out your plan. Stretch goals will only work for…
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