Setting Stretch Goals
Goal setting should be more of an exercise than it is. How did you set your goals? Did you pick a number and then do the math needed to get there? You need to set a numerical target, but goal setting should be a session that makes you think. It should lead to innovation, but typical goal setting won’t accomplish that objective.
Most goal setting is passive. You select 5% and build a budget around that number. Setting a goal and building a budget are critical steps, but the 5% approach limits your ability to grow. It only makes you try to do more of what you have always done. It does not stimulate creativity. You need to look at creating stretch goals.
What are stretch goals? Stretch goals are difficult, if not impossible goals to hit. Typically, there are three layers:
- This is easy, “set a number that we just need to try harder method.” The 5% example from above. It requires trying more at what you have always done.
- Extended Cut. What if the goal was 20%? 20% makes you push the borders of the traditional box you are in and forces you to think about ways to come up with something new. In this stage, you are still in your traditional box, but starting to push on the walls of it. You might reconsider pricing strategies or adding other services or products. For example, Taco Bell adding breakfast was breakthrough thinking. They had the restaurants and most of the ingredients involved they were already using for their other products. Labor to cover an earlier opening time was their primary expense to add.
- Impossible to Hit. This is the “way out there” target. It forces you to go outside the box into completely new territory. As an example, how could you grow 50% next year? Let’s assume increasing your prices or hourly rates won’t get you there. If they did, you would have done that a long time ago. Going through this exercise can lead to innovation. That innovation might take a few years to get to, but without the exercise, valuable change might be missed.
Why would you set goals you cannot hit? It is how breakthrough thinking occurs. It forces management to get creative and toss aside traditional thinking in order to develop their next stage. What if the 50% increase was a miserable failure and you only saw a 15% increase as a result? You set impossible to reach goals in order to force different thinking. Otherwise, it can be easy to fall into the trap of getting stuck in a rut doing the same things and missing the potential for new ways to grow.