OKRs… to Stretch or Not to Stretch?

by | Apr 2, 2014

} 2 min read

I meet with a lot of organizations to talk about goal setting and one of the most debated topics is stretch goals – to set them or not to set them. What effect will they have on the team? Will stretch goals motivate or demotivate employees? Should we include both stretch goals and attainable goals in goal-setting exercises?

Traditional goal-setting strategies such as S.M.A.R.T. (smart, measurable, attainable, relevant, and time-bound) encourage employees to focus on setting goals that they can achieve. In contrast, Google and its staff of 40 in 1999 adopted a strategy that asked employees to set Objectives and Key Results (OKRs) that were a little uncomfortable and slightly out of reach, according to the Google Ventures StartUp Lab workshop, “How Google sets goals: OKRs.” In earlier posts, we pointed out some of the video highlights and answered some critical OKRs questions. Now, we want to touch a little on philosophy.

There are differing opinions about stretch goals. Some say not to dismiss them. Others believe they are demotivating and that setting too many stretch goals can backfire on managers. From the video, we think it’s fair to say that Google is a big proponent of stretch goals. Don Dodge put it this way: “Achieving 65% of the impossible is better than 100% of the ordinary. Setting impossible goals and achieving part of them sets you on a completely different path than the safe route.” The best Google example is gmail, which actually started as an individual project not assigned by corporate.

It’s fine for organizations to advocate aspirational goals, but at the same time they must ensure stretch goals are reliable so that everyone—at every level—has confidence in those goals. That individuals, managers, and executives have a comfort level that shared commitments are actually shared. We would also say that stretch goals should be articulated in positive terms. I think we’d all agree that gaining 10% market share is a much more motivating objective than trying not to lose 10% market share.

But building trust in stretch goals can be difficult for organizations just getting started with goal setting because with existing processes, there generally isn’t a good way to regularly “check in” on whether an objective is close or very far away from being completed. Once a quarter may be fine for older employees, but younger employees are looking for more regular feedback – and they prefer to join companies that provide it.

Evolving goal-science solutions will provide greater visibility into every goal from multiple perspectives. Individuals can update progress as part of their daily activities, and managers can engage online and in-person regularly to ensure stretch goals do not get out of control and remain positive endeavors for both the individual and the organization. Through Quantified Work, we expect individuals to create aspirational, stretch goals, and we can help organizations better support them. So go ahead and stretch—with confidence.

Betterworks® aligns, develops and activates your workforce for business growth. Our easy-to-use, integrated software solution replaces outdated annual review processes with powerful Continuous Performance Management® programs to help organizations ensure everyone is working on what matters most and are having the crucial conversations necessary to inspire and motivate their entire workforce to meet today’s goals and tomorrow’s challenges.