Contrary to common knowledge, stretch goals are NOT a universal tool
“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” — Mark Twain
So begins the 2015 film “The Big Short”, a behind-the-scenes account of our first decade’s housing bubble. “Just ain’t so” foreshadows the unraveling of the near-universal presumption that housing prices could never fall nation-wide.
I thought it marvelously ironic that the filmmakers themselves were victims of the very sentiment of the quote… there is no evidence that Mark Twain authored these words! I knew this because of a poster in my office attributing this saying to Will Rogers. But then I was humbled to learn there’s no evidence Will Rogers penned these words either!
What else “just ain’t so”?
A nagging feeling recently prodded me into researching best and worst practices for stretch goals. There was no surprise that organizations at the top of their game benefit from additional urging to maintain momentum. What did surprise me was the harm stretch goals have on struggling organizations as documented in Harvard Business Review, Wharton, Forbes, McKinsey, The Financial Post, and more.
- Employee morale and intrinsic motivation erodes
- Confidence in leadership decreases
- Innovation and learning decline
- Cross-business collaboration drops
- Excessive risk-taking rises
- Unethical behavior increases
- Short-term focus overwhelms long-term progress
A scary list but, upon reflection, I can recall past examples where most and even all of these harms occurred in struggling organizations. It is understandable how successful leaders, having seen stretch goals work in past situations, continue applying this “no-brainer” management technique when their organization encounters severe difficultly or that leader moved from a high-performing organization to a turnaround situation.
Selective Application
When we find ourselves in a struggling organization, the research advises pivoting away from challenging stretch goals to more modest, small wins (our people truly believe are achievable) to build positive momentum without poisoning the corporate culture.
According to the research, the only exception to this rule is when the struggling organization’s very survival is at risk and long term damage to the corporate culture is an unavoidable necessity – damage not easily undone once survival is secured.
Needless to say, discovering my excessive confidence in stretch goals spurs what I hope is a healthy questioning of all “manifestly obvious” management practices. Without selective application of any tool I can easily fall into that old trap where:
“When I have a hammer, everything looks like a nail.”
Abraham Maslow (probably)
Strategic Bets 