Some of the most successful companies set goals that often appear audacious and risky.
As companies struggle to maximize output while staying ahead of the competition, a new study from University of Colorado Denver Business School examines the idea of ‘stretch goals’ and why audacious targets are often misunderstood and sometimes misused.
The article, “The Stretch Goal Paradox,” examines companies setting goals that appear unattainable based on current practices, skills, and knowledge. And how some fare better than others. See and her co-authors looked at numerous companies that have set these audacious goals, trying to determine what works and what doesn’t. Stretch goals differ from ordinary challenging goals in that they display extreme difficulty and radical expectations as well as extreme novelty in their approach.
By compiling data, case studies, and media reports from companies, Dr. See and her colleagues analyzed the success and shortcomings and concluded that there are two critical factors needed to meet stretch goals. The first is that the company needs to be coming off a recent win or that it surpassed an important benchmark in its own history. This is helpful because winning affects attitudes and behaviors positively and recent wins help companies see opportunities.
The second, and maybe more important factor, is having an abundance of resources. These can range from money, knowledge, experience and people. The research shows that companies are better prepared to handle the potential failures when they have excess resources like money or emotional support.