Top Tips for Setting Team Stretch Goals

To achieve your biggest goals, gain or maintain industry leadership, or attract wide brand recognition, it may be necessary to set stretch goals. These are audacious, scary, and almost impossible goals that inspire your team to go beyond their normal abilities to create novel approaches and solutions.

Stretch goals are aggressively ambitious and rarely achieved. When they are, the results are exponential, attracting rewards and opportunities and boosting your teams' confidence. Stretch goals can move a team to new levels of competence and productivity. They improve employees' mindsets and strengthen team bonds.

However, if not managed correctly, stretch goals can create a disconnected work environment and demotivate employees. As a leader or manager, how you set and communicate stretch goals to your team is critical.

But what is a stretch goal? How do you benefit from them while tackling their challenges? This article defines stretch goals and explains how to get the best results from them in your organization. Let's get started.

What is a stretch goal?

A stretch goal is a high-effort and high- risk goal. It is intentionally set above normal standards to attract exponential rewards, opportunities, and experience.

Stretch goals are not expected to be achieved one hundred percent. They are set to inspire growth and counter complacency in teams. When a stretch goal is achieved, it's recognized as high performance. When it's missed, it should not be judged as low performance. Stretch goals are deliberately set out of reach. Achieving a substantial fraction puts your company ahead of peers and teaches your team valuable lessons .

What are the benefits of stretch goals?

If a stretch goal is not expected to be achieved, why then do we set them? Are we setting our teams up for failure?

There are several reasons why stretch goals are beneficial. Regardless of the outcome, they breathe new life into uninspired work environments and challenge teams to create better results .

It's best to set stretch goals alongside regular SMART (Specific, Measurable, Attainable, Relevant, Time-bound) goals . The juxtaposition between the stretch and SMART goals creates direction for your teams, clarifying the organization's vision, roadmap , and minimum targets for employees.

Here's an example of the difference between SMART and stretch goals:

Your SMART goal is specific, measurable, achievable, realistic, and time-bound. Your stretch goal is grand and calls for rethinking current processes and solving more expansive problems for your market.

Your teams can see the company's long-term vision, what peak performance looks like in the short term, and how their role contributes to it.

Other benefits of stretch goals include:

What are the challenges of stretch goals?

Despite their many benefits, the very nature of stretch goals brings many challenges, including:

The stretch goal paradox explained

The stretch goal paradox shows how stretch goals are often misused. Organizations that could most benefit from them rarely use them and businesses with less chance of success set them, leading to failure and team demoralization.

A much-cited Harvard Business Review article on the stretch goal paradox explains that stretch goals are most likely to work when an organization or team is on a winning streak with recent good performance and high employee morale . When these winning organizations also have slack resources to expend on the stretch goals, their chances for success become higher.

On the other hand, companies on a losing streak are not in the right place or emotional space to tackle stretch goals, especially when resources are tight and the organization needs to cut costs or make money urgently. Employees in such fragile organizations may snap under the pressure of stretch goals or resort to unethical means to achieve them.

Though perfectly positioned to take advantage, companies with recent good performance may become satisfied or complacent with their market position and feel no need to set ambitious stretch goals. Inversely, companies on a losing streak, who are least likely to succeed, often set lofty stretch goals, leading to high-pressure, sometimes toxic work environments for their teams.

It is essential to be aware of employee morale when setting stretch goals. In the right environments, stretch goals inspire workers to exhibit optimism, attract opportunities, and reach new heights. In deflated teams, stretch goals may seem like threats, causing employees to grasp for quick fixes and exhibit fear or defensiveness.

How to set stretch goals

Stretch goals should focus on developing original and innovative approaches to complex challenges, and not necessarily lead to longer hours at work. They should inspire teams to try new things and think beyond the standard.

When setting stretch goals, start by asking open-ended questions like:

These questions help you think widely and come up with an ideal roadmap. Keep in mind that you may not achieve your stretch goals, but they serve as a picture of the future your company is working towards.

Before you set a stretch goal, remember to consider your organization's position regarding:

More tips for setting stretch goals

Once you've confirmed your company's position and gotten enough answers to focus your stretch goals, follow the tips below to increase your chances of setting impactful targets.

Examples of stretch goals for employees

Depending on your industry, organization size, and market position, stretch goals for your employees would vary. Here are some examples of stretch goals for employees:

Can stretch goals go into OKRs?

Adding stretch goals to OKRs (Objectives and Key Results) is tricky as they can be so ambitious that employees do not believe they can achieve them. However, in the best cases, moonshot goals inspire teams and create an exciting work environment.

The key to using stretch goals in OKRs is communicating the rationale and expectations behind them and the thresholds for success. For most companies, success means achieving 70% of the objectives — fully reaching the OKRs is acknowledged as extraordinary performance. When aiming high, even failed goals result in substantial advancements.

Be realistic when adding stretch goals to OKRs. Note what's possible and what's not. Keep the key components of OKR goal-setting in play:

Can a business have a stretch goal?

There are many examples of businesses that set and achieved audacious stretch goals. There are also examples of many that failed.

The time it took to develop new products at Motorola famously fell tenfold in the 1990s after the company mandated stretch goals throughout the organization. Stretch goals created a culture of excellence at Apple, caused ethical issues at Wells Fargo , and led to failure at Yahoo .

For the best results, managers should define strategically aligned metrics and ethical guidelines to achieve stretch goals. Here are some examples of stretch goals for businesses:

Who should set a stretch goal?

Founders, executives, and managers can set stretch goals. However, teams and employees should be given autonomy in brainstorming, experimenting, and innovating to achieve these goals.

How to motivate your team to reach stretch objectives

Teams may become complacent and resistant to change — especially when a company is successful and everything is working as it should.

If you're in this situation, motivate your team by reframing your company's future in terms of potential losses, instead of continued success. Emphasize what could happen if you don't take action. To keep your team challenged and invested in your stretch goals, it's important to:

How to set employee goals with UDN Task Manager

UDN Task Manager helps to turn your goals into actionable results. Its collaborative workspace allows your teams to zoom out to see the company's big-picture goals and zoom in to tackle the tasks and activities required to complete each one.

With UDN Task Manager 's OKR template , you can define the steps you and your team need to take to achieve set goals, assign tasks, measure defined metrics, extract insights, and make adjustments to your project plans as you progress towards your stretch goals. Get started today with a two-week free trial of UDN Task Manager .