Understanding Stretch Goals

By Felipe Castro, Partner at Lean Performance

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Stretch goals are a great, but usually misunderstood, concept. Google even includes them in it’s "Ten things we know to be true":

We set ourselves goals we know we can’t reach yet, because we know that by stretching to meet them we can get further than we expected.

But what exactly are stretch goals?

The stretching analogy

Let's think about the characteristics of stretching:

• While you are stretching it feels uncomfortable, even slightly painful. Stretching takes you out of your comfort zone.
• Stretching may be uncomfortable while doing it, but it makes you feel good afterwards.
• The whole idea of stretching is to try to reach a place that you know you can’t reach. You have to keep trying to reach your feet even though you know you can’t reach it.
• After stretching regularly you start to reach farther than you could if you haven’t been stretching. You may still not be able to reach your feet, but now you can reach places that you couldn’t reach before.
• Although stretching is supposed to feel uncomfortable, you shouldn’t strain a muscle. You should not try to go so far as to harm you. You can try to be as Jean Claude Van Damme, but take your time.

How this applies to goal setting?

When you think about this analogy, you can say that stretch goals are goals that:

• (a) take you out of your comfort zone
• (b) make you go after targets that you think you can't reach (at least not yet)
• (c) make you achieve things you couldn't do before and
• (d) should be hard but not as hard as to harm (or demotivate) you.

I like to think of stretch goals as goals that are so hard that make the team rethink the way they work, ask hard questions and have the difficult conversations that have been avoided. Stretch goals make teams wonder how far they can really go.

In fact, the goal-setting theory pioneers Edwin Locke and Gary Latham found scientific evidence that shows that “the highest or most difficult goals produced the highest levels of effort and performance”. Shane Snow has a great post over at LinkedIn summarizing this study:

Tough goals indeed improve our performance, and for three reasons:

They direct our attention toward activities that matter, and away from distractions.

They energize us. “High goals lead to greater effort than low goals,” Locke and Latham write. This goes for both physical and mental effort.

They increase our persistence. “Hard goals prolong effort,” they write. “Tight deadlines lead to a more rapid work pace than loose deadlines in the laboratory as well as in the field.”

As Larry Page wrote in the foreword for How Google Works, making people think really big is hard, and hard goals are key:

[Teams] tend to assume that things are impossible, rather than … figuring out what’s actually possible. It’s why we’ve put so much energy into hiring independent thinkers at Google, and setting big goals.

Two common misconceptions

"70% is the new 100%"

Now that OKRs are spreading as the modern standard for goal setting, a common misconception is arising regarding stretch goals.

In his now classic video presenting OKRs, Rick Klau mentions that:

Objectives are ambitious, and should feel somewhat uncomfortable.

The “sweet spot” for an OKR grade is .6 — .7; if someone consistently gets 1.0, the OKRs aren’t ambitious enough. If you get 1s, you’re not crushing it, you’re sandbagging.

This led to some questioning that "if 70% is the accepted result, isn't 70 the new 100?".

This only happens if the team is not stretching. Accepting the 70% as the target would be like simply touching your leg without trying to reach your feet — i.e. not stretching at all. The whole idea of a stretch goal is to really go for the 100%, even tough you know that most of the time you won't reach it.

"If your use stretch goals, you may create a culture in which it does not matter if you reach your goals"

Usually when an organization develops a results-focused culture, it starts by focusing on beating the goals. That is very important. But afterwards the culture needs to evolve and start questioning how far the organization can really go.

As a CEO told me a couple of months ago "We are growing 300%/year, but how do we know we can't grow 500%?".

In a stretch goals culture, you have to deliver. A LOT. But that is not measured by the percentage of the goals you achieved. In fact, as Rick Klau and others wrote, if you are always beating your goals, your goals aren't ambitious enough.

Stretch goals and compensation

In order to enable the use of stretch goals, salary and promotions have to be separated from goals. Otherwise, the organization would be punishing those who set ambitious goals, and incentivizing sandbagging.

• Photo by Flickr user Eric Vardy

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