Stretch Goals: Do’s & Don’ts

In Built to Last, Jim Collins and Jerry Porras urge business leaders to set what they characterize as BHAGs: Big Hairy Audacious Goals. That is, an “audacious 10-to-30-year goal to progress toward an envisioned future.” A true BHAG is clear and compelling, serves as unifying focal point of effort, and acts as a clear catalyst for team spirit. It has a clear finish line, so the organization can know when it has achieved the goal; people like to shoot for finish lines.

In terms of stretch goals, here is what Jeremy Hope and Steve Player recommend.



Actions to Avoid

o  Stop turning targets into fixed-performance contracts
o  Stop being a slave to analysts (and managing earnings)
o  Stop cascading Targets down the business
o  Avoid specific goals (think in terms of ranges)
o  Stop basing employment evaluation and rewards on fixed targets
o  Stop creating a climate of fear
o  Stop denying teams (or groups) any involvement or ownership

Actions to Take

1. Frame group success in terms of peer-to-peer comparison.
2. Ensure that the executive team sets aspirational, medium-term goals and expectations.
3. Support continuous, relative improvement as the primary definition of success at every level.
4. Ensure that the executive team supports – but doesn’t control – the goal-setting process.
5. Enable teams at every level to set their own goals.
6. Use benchmarking to encourage teams to raise their game. Note: Use ranges rather than single point goals.
7. Enable teams to reset goals as required.
8. Focus performance reviews on trajectories and gaps.
9. Use league tables with care.
10. Balance internal competition and cooperation (e.g. no competition for customers).

For a thorough discussion of stretch goals and 39 other major business topics, I highly recommend Hope and Player’s Beyond Performance Measurement: Why, When, and How to use 40 Tools and Best practices for Superior Business Performance, published by Harvard Business Review Press (February, 2012).


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