Goal setting

To stretch or not to stretch goals?

By on July 2, 2016

Every team, however small or big sets goals for itself as a whole as well as for all the individuals. While some believe in setting up goals that are ‘highly ambitious’ others think ‘being practical’ is more important to keep the team members’ morale up.

When it comes to ‘stretch goals’ what makes people have opinions that are on extreme opposites?

Before we form an opinion based on the views of others, it’s better if we understood what stretch goals are. By definition, it means you are stretching yourself beyond what your mind might think is safe.

In organisational context, it means setting goals that put you out of your comfort zone. As employees, you are meant to challenge your assumptions, limitations and perceptions and set a target that goes beyond business as usual.

Simply put, as a salesperson you may be cold calling 70 suspects in a day. You should now set an ambitious target of making 120 calls in one day to ensure you get a much higher conversion rate. While stretching yourself to achieve this task, you may not complete 120 calls but 90-100 calls. The chances of converting these into prospects increase significantly.

While some feel this leads to increase in productivity, others see it as over-exerting employees. Even experts are divided on this debated and no clear answer seems to be in sight.

Daniel Markovitz has termed stretch goals as ‘managerial absurdity’ and made it pretty much clear when he titled the article as ‘The Folly of Stretch Goals’. What makes his case even stronger is that Harvard Business Review has carried the article. He has demonstrated how the cons of stretch goals far outweigh its pros.

Disadvantages of Stretch Goals:

Stretch Goals can be terribly demotivating:

As with the previous scenario, consider that you are made to call 120 suspects in a day. By the end of the day, irrespective of the number of conversions, your energy might be completely drained.

Just the thought of making almost twice the number of calls in one day can daunting for most. And if you are overwhelmed even before you begin the task, you probably won’t feel inclined to give your best efforts.

Stretch goals have a dangerous tendency to foster unethical behavior:

We have seen this happen all too often. When salespeople are given very difficult targets, they resort to unethical behaviour.

You may be tempted to give fake information to show that you have fulfilled your daily quota. It is an act of self-preservation. You don’t want to be seen as an under-performer.

Finally, stretch goals can also — tragically — lead to excessive risk taking:

You could be one of those who are hell bent on being perceived as a consistent achiever. You may reach your targets every time and converted many into your prospects. But does your company have the capacity to deal with these?

Imagine a scenario where your company is selling international roaming sim cards. You call and convince a 100 prospects to buy these in advance for their upcoming trips. You may even promise attractive discounts. But what if only 70 cards are left to sell? You will have leads in your pipeline but not the ability to convert them into customers. And now social media being such an easy option to vent your disappointment, you can expect strong reactions from them.

However, like everything, this theory too has another side to it. Another expert is all for adopting stretch goals to improve employee performance. Steve Denning, in his own words says, “let’s celebrate stretch goals.” In contrast, his article’s title is ‘In Praise of Stretch Goals’ and published on Forbes platform.

Steve has identified that the problem with failure of stretch goals is that more often than not, they are about financial targets and not human excellence. When your company sets financial targets, you tend to see only the monetary benefits. You eye only the rewards that you will get on achieving the targets. You do not seek to develop yourself. That is the reason stretch goals fail in such organisations.

Stretch goals need to be about human excellence, not about financial targets. Financial goals bring out the selfish gene that lurks in all of us. Instead, stretch goals need to appeal to what is best in us. (Source: Forbes )

The core philosophy of stretch goals is to challenge yourself and attain that which you thought impossible. Take an example of running as a fitness routine. You start with 1 mile a day. For the first few days you just concentrate on your breathing and your posture. Once you get used to it, you increase that to maybe 3-4 miles a day. You push yourself to run more each day. It is this attitude that helps you overcome your limitations and set bigger targets for each day.

It is similar to setting goals in your organisations. You should gradually increase your targets so that you are not overwhelmed and can focus on consistent development. As you improve, your productivity is bound to increase.

While both sides of the conversation do have some substance, we at UpRaise believe in balancing ‘stretch goals’ with ‘operational goals’. What do you think, tell us in the comments.

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