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February 6, 2017 101

101: Stretch goals

Aiming high is one thing.

But stretch goals, or goals set for your team that are unrealistic to meet with existing resources, often do more harm than good. More than merely difficult to reach, stretch goals go beyond – and then some. For instance, your already-intimidating goal could be $10 million in revenue for the year with a stretch goal of $11.5 million. Stretch goals – an effort to spur creativity – can be risky. Here are some things to know about stretch goals.

You may have to get proactive, and quick. Stretch goals may be handed down to you from senior managers who don't understand the work involved in hitting certain targets. “Be sure others are aware of the time it takes to do things, the other people involved in getting them done, and the time frames,” writes Chrissy Scivicque at U.S. News & World Report. The explanations need to take place before the problem occurs, not after, she says. You can't wait until after your team has missed the target to explain why.

Stretch goals can breed problems, like unmotivated, unethical or risk-taking employees. Daniel Markovitz of Harvard Business Review calls stretch goals a “managerial absurdity. Enron rewarded its executives with large bonuses for meeting specific revenue goals, irrespective of the profitability or the riskiness of the moves … Stretch goals played a large role in putting the investment banks in serious jeopardy,” he writes.

Stretch goals don't build predictability, the crux of sustained performance, writes Joel Trammell of Inc.com. When a CEO sets unrealistic goals, he or she won't be taken very seriously, or be able to get a clear perspective on when the goals will be achieved, as they were unlikely to begin with. “When the goals aren't achieved,” he writes, “no one is surprised, no one is held accountable, and no real lessons are learned about what could've been done to change the outcome.”

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