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3 Reasons why stretch goals don’t work

Stretch goals — are they a motivator or a de-motivator? Stretch goals are the often employed tactic of giving your employees a goal that is just out of their reach. The idea is motivate them to work harder. But does that work?

Daniel Markovitz is the President of TimeBack Management and the author of A Factory of One: Applying Lean Principles to Banish Waste and Improve Your Personal Performance.

Markovitz told Chris Dorobek on the DorobekINSIDER there is a bit of a folly when it comes to stretch goals.

Markovitz 3 Reason Stretch Goals Don’t Work

  • Stretch goals can be terribly demotivating: When stretch goals seem overwhelming and unattainable, they sap employees’ intrinsic motivation. The enormity of the problem causes people to freeze up, and the extrinsic motivator of money crowds out the intrinsic motivators of learning and growth.
  • Stretch goals have a dangerous tendency to foster unethical behavior: In the early 1990s, Sears gave a sales quota of $147 per hour to its auto repair staff. Faced with this target, the staff overcharged for work and performed unnecessary repairs. Sears’ Chairman at the time, Ed Brennan, acknowledged that the stretch goal gave employees a powerful incentive to deceive customers.
  • Finally, stretch goals can also — tragically — lead to excessive risk taking. Enron rewarded its executives with large bonuses for meeting specific revenue goals, irrespective of the profitability or the riskiness of the moves. Although the final book hasn’t been written on sub-prime mortgages and the ensuing banking crisis, we do know that stretch goals played a large role in putting the investment banks in serious jeopardy.

Markovitz tells us why small wins work

  • Small wins in combination with process improvement will drive your organization forward without the negative consequences of stretch goals.
  • This approach requires a willingness to abandon the “ready, fire, aim” approach to problem solving.
  • Requires a subtle — but critical — shift in focus from improving outcome metrics to improving the process by which those outcomes are achieved.

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Peter Sperry

I disagree. I still remember the stretch goals from basic infantry training that seemed impossible until I achieved them. During the last week of training, when the drill instructors dropped the mask a bit, ours acknowledged the most difficult part of his job was setting those goals for us. They had to be just beyond what we thought we could do but just within what he knew we were capable of achieving, often a very narrow target. Nevertheless, the overwhleming majority of us met those expectations, although rarely on the first or even 50th attempt. At graduation, we walked off the parade field with the knowledge each of us was capable of much more than we gave ourselves credit for. Setting stretch goals correctly may be one of the most difficult assignments required of an instructor or a supervisor. It requires a detailed understanding of the tasks in question and an in depth knowledge of subordinates capabilities, more than they know themselves. But done properly they can be the greatest gift a leader gives to followers.

Carol Davison

At Klemmer and associates they challenged us to raise $70,000 in a morning. We did so. They next day we used the donations to build houses for those who had been flodded out. We wouldn’t have done so without being challenged.

Samuel Lovett

I think in the situations listed by Daniel in the podcast, the stretch goals were irresponsible, setting up unreasonable expectations for workers and companies that grew into malignant situations over time.

But you can’t deny that stretch goals in specific circumstances (such as responding to an emergency, or in relation to physical strength) can have life changing effects. I’ve had one or two athletic stretch goals, and people who held me accountable to them, that changed my life for the better.

Clator Butler

As described in the podcast, stretch goals sound merely like a way for people to hit their level of incompetence as defined by The Peter Principle without even the reward of promotion … only the dangling carrot of it. Sadly, I’ve seen a lot of this in today’s businesses (thankfully not where I work, but elsewhere). Setting high goals is a delightful motivator that delivers high intrinsic reward when achieved. Setting near-impossible goals generally leads to an empassioned rush to succeed, followed by a demotivating struggle, and ultimately a terrible failure by the individual, the team, and the business in the end. Applied repeatedly, this will burn out the people and rob the business of profitability.

Dennis Snyder

Peter is exactly right, the manager must be a leader and truly understand the activities and capabilities of the team before making stretch assignments. Managers who were promoted ahead of their capabilities tend to be critical of the risk-taking necessary to stretch. Employees with a weak leader that is too arrogant to realize the weakness will not take the risk. Weak leaders in my experience are arrogant as a defensive measure. Middle and upper management need to be accurate in first-line management capabilities assessment prior to launching such a precarious operation. Great idea if you know what you’re doing.

Peter Sperry

I would point out that drill instructors in the military are selected from only the most highly qualified NCOs, undergo a long detailed training program themselves and are under constant oversight. Most of them are combat veterans and all of them are experts in one or more military ocupation specialties. They do not just pull stretch goals out of thin air. They carefully observe every trainee from the time they step off the bus until the time they march off the graduation parade field. They quickly throw relatively easy challanges at new trainees and rapidly increase the difficulty level until they reach a failure point. All of this is usually done in the first 1-5 days of training to establish where the stretching begins. They also carefully observe to determine the absolute failure line beyond which no training or motivation or effort will lead to success. The set the stretch goals between these two points. It is not an easy process or one that can be left to over enthusiastic tyrants.

Leaders in civilain occupations need to devote a similar level of effort to setting stretch goals for their teams. Simply walking in one day and putting out a number or a set of expectations based on pie in the sky hopes will lead to disaster. They also need to define the stretch goals as explicitely as a drill instructor describes a pushup. Enron executives hitting unrealistic revenue goals regardless of profitability or risk is no more acceptable than a trainee knocking out 100 head bob pushups in two minutes (body barely moves and shoulders do not break plane is not an acceptable pushup). Reaching difficult but achievable revenue goals that generate good profitability within acceptable risk levels demonstrates to people they can achive more than they knew in the same way a trainee learns they really can do 80 GOOD pushups in two minutes.

First recruit good supervisors. Next train them well. Define expectations that include clear definitions of acceptabel and unacceptable deliverables. Then and only then can they be turned loose to set stretch goals for their teams.

Andrew Krzmarzick

Stretch goals are fine…if you set incremental goals that lead to it. Build in milestones and other achievable metrics along the way. Map progress toward the stretch goals according to those more near-term, achievable markers…

One other thing – Markovitz suggests that we should focus on process vs. outcomes. I think you need an equal emphasis on both.

Avatar photo Bill Brantley

Well, Peter said everything I was going to say but with more eloquence and with better examples. All I can add is that history is filled with stretch goals from Columbus setting off to find a better passage to the East (and would have succeeded if there wasn’t a continent in the way) to America landing men on the Moon in just under a decade. We can see the power of stretch goals when we watch the Summer Olympics this year.

On a side note: after a quick read of Markovitz book, I think we have a case of a good idea being stretched way beyond its usefulness.

Joe Williams

I disagree with the premise of this article as well. It left me with a feeling that it’s an “either-or” proposition between the kinds of goals that provide direction, are rewarding, are inspiring, are vivid, and are eventual (DRIVE), versus pursuing the low-hanging fruit of quick victories. Any team or project needs both, and to ignore one or the other is to the peril of the team or project’s success.

Doug Matthews

The assumption he’s making here is that stretch goals are “just out of their reach” which isn’t a stretch goal at all…it’s an unreasonable expectation. Stretch goals are grounded in the leader’s ability to understand the capacity of an employee or team and then making assignments that challenge them to reach that capacity. The most effective stretch assignments are the ones that are directly related to team-based achievement and organizational excellence, not quotas. I don’t just find his theory incorrect; I find it troubling and irresponsible.

Paul Alberti

Reminds me of a song several years ago – (did a quick Google search but could not find it – yet) about “everytime I get close to the mark on the wall – they move it.”