How Stretched Should Your Strategic Goals Be?
‘We chose to go to the moon, not because it was easy… but because it was hard’ – John F. Kennedy
For management gurus, growing BIG requires thinking BIG, as illustrated by President John F. Kennedy’s “man on the moon” goal. It was huge and – more importantly – no one, including Kennedy himself, had any idea of all the things that had to be done to reach it.
However, the process of setting beneficial goals is harder than it looks. It takes a lot more than setting stretched goals to actually see any real achievement, and there are often hidden challenges, particularly when it comes down to the execution.
1. Aiming high helps with establishing stretched strategic goals
Jack Welch, former CEO of GE, once mentioned having found that ‘by reaching for what appears to be the impossible, we often actually do the impossible; and even when we don’t quite make it, we inevitably end up doing much better than we would have done.’
When aiming high, thinking differently about goal setting is a game changer – consider a goal to increase 10 times versus one to increase by 10%. The latter drives thinking about how to stretch a current business, using the existing tools and assumptions, merely building on top of an existing solution that many people have already spent a lot of time thinking about. In contrast, a 10x increase requires a different mindset; one that moves away from the tendency to think in incremental and linear manner. This opens up new possibilities that would never have been considered otherwise as we lean on creativity and innovation – the kind that, literally and metaphorically, can shoot for the moon. As such, we might
envision a different company, a change in focus perhaps (e.g. from single to multi markets) or in business operations (e.g. the core business becomes one of several divisions). Both could be done, both would have their challenges, yet those might be different rather than greater.
Ultimately, stretched goal should be crystalised into an explicit and concise statement and follow the rules set under the well known SMART acronym:
– Specific: stated so it is obvious to everyone
– Measurable: translated into quantifiable and material business outcomes, such as market share gains, profit margin, or other quantifiable results
– Achievable: striking a balance between not aiming high enough (which will limit success and erect mental barriers) and aiming too high (which will create burn-out quickly)
– Relevant: it should help implement the chosen strategy of the business
– Time-bound: within a specific deadline
2. Building the motivation to achieve stretched strategic goals
Having the drive, commitment and motivation are all key to making these stretched goals happen. As it creates discontinuity, setting bigger challenges in itself create passion and motivate people – aiming for something 10 times better becomes easier than it is to make it 10% better. However, the whole organisation needs to want to accomplish them, and be willing to commit as much resources, time and hard work as possible to achieve them.
The belief that we can get there as long as we try is also very important. The first step towards motivation is to make sure that strategic goal-setting, in the same manner as strategy, is done through a discussion among the relevant people, not an announcement. This improves the odds of coming up with the right goals – with the right targets and measures – but also of achieving buy-in from the people who will drive the work.
The small steps that get us closer to our final stretched goals are reinforcers that give us some feeling of achievement, but what generally really motivates us is our desire to achieve the end result. If we want something bad enough, we are going to work hard to make it happen.
3. Making those stretched strategic goals more manageable
Stretched goals are by definition big, very big, risky and will take several years to achieve. The details of how to accomplish them will not be known when they are set. Odds of success can be improved with a disciplined strategy execution, and a ‘small wins’ framework can often help. The objective is to recast a larger goal into smaller, manageable but interlinked parts. For each sub-goal, one must define the various streams of work required, explicit outcome, key deliverables, due dates, and a single owner. As such, it will allow for visible and measured progress towards the completion of the larger goal while generating consistent action.
The single most effective way to achieve the plan is to work at it rigorously and relentlessly: for example, holding a project meeting at the beginning of each week to review the week’s deliverables list, followed by a status report on results against this list at the end of the week. The deliverables list and status report form the agenda of the following week’s meeting and drive the execution’s consistency and accountability. This higher cadence monitoring of plan versus actual makes it easier to check progress and identify quickly execution gaps that threaten goal achievement, or where a course-correction is needed. In addition, such consistent and outcome-focused execution drives motivation: teams are working on the right things and their work matters.
What separates great companies from the merely good are not just the stretch strategic goals they set themselves to achieve but also the way they think differently about setting those, and the discipline with which they implement them. Take a look at your goals and ask yourself if you can push them even further. If aiming even higher seems unreasonable or unattainable, the chances are you may at least have a decent stretch goal.