Netflix sets ambitious goals. In 1997, it was one of the first startups in the mail-delivery DVD rental business. Since then it has continued to raise the bar on itself and, thereby, its competitors. In the mid-2000’s its leaders recognized the potential of online video streaming and in 2007 (sans apps, devices, or any other streaming options) introduced a collection of 1,000 movies and television shows available on its website. It was a hit (pun intended), but the company did not rest on its laurels. Instead, it set a new goal: create original content. Its first creation – House of Cards – was streamed to millions of viewers through Rokus, Apple TV, iPhones, and more in 2013.
Stretch Goals
Titans like Netflix, Amazon, Costco, and the Mayo Clinic became best-in-class not by executing small incremental improvements – but by taking giant steps far beyond the limits of what was thought possible. Many companies such as Borders, Yahoo, and Blackberry attempt stretch goals, intended to be transforming, only to fail. So why is it that some companies achieve stretch goals and others do not?
Common sense and research suggest a company’s track record of success and resources are the primary predictors of whether stretch goals will be achieved. If a company is struggling to meet expectations, pushing the limits of what is thought possible can be the exact wrong thing to do. In a classic demonstration of the “die” part of “do or die,” people who shoot for a stretch goal after a series of failures or modest performance tend to make riskier decisions with lower probabilities of success. Also, struggling companies typically have less resources: time, talent, and money.
Why You Should Walk Before You Run
There is a lesson here: While leaders love the idea of “turning things around” and sprinting ahead of the competition, a wiser strategy is to walk to the starting line. Walking means you establish a track record by setting smaller and more realistic goals. This approach builds teams’ confidence and experience – two things necessary for successfully achieving stretch goals. In addition to these things, you have to ensure you have the necessary resources: time, talent, and money – to reach your destination. Even if a team has extra resources, but has been struggling, it’s a good idea to take a pass on stretch goals in favor of smaller risky pursuits that are strategic and measurable. By running a series of “will this work?” experiments, the team can gather evidence and take concrete steps that prepare it for tackling a transformational, stretch goal later.
A Story of Reaching Too Far Too Soon
Let’s take a look at a real-world example of opting for a stretch goal rather than “walking to the starting line.” In graduate school I wanted to become a professor, and being the first author on a publication in one of the most prestigious journals in the field would tremendously boost my chances in the academic job market. I had no track record of success in publishing and my Master’s thesis (the to-be first author publication) was largely a replication of existing work with a modest extension in some areas. My thesis advisor suggested we shoot for the number one publication in the field. In this case, I not only lacked a track record of success in publishing, but also resources: the clock was ticking fast until I needed to prepare an application for the academic job market. Although several professors suggested seeking publication in a less prestigious journal with a greater acceptance rate, I went for the number one journal. Six months later, the paper was rejected and I had lost a significant amount of time going for the gold when is should have simply been trying to cross the finish line as a published author.
Building an Effective Team for Any Strategy
With a wise strategy set, leaders need to hire and build teams that can execute and deliver on their goals – stretch or otherwise. Hiring for qualities like grit, hope, optimism, and resilience relate to a person’s probability of success – and your organization’s ability to execute its strategy. These qualities shape our response to challenges and increase our level of commitment to achieve even in the face of adversity. What’s more, these qualities open doors and opportunities in ways we didn’t anticipate.
In addition, hiring people who believe they can improve their abilities over time through hard work and learning ensures they are more likely to achieve goals despite adversity. However, people who believe ability is static are less likely to set difficult goals. Psychologists call these Mastery and Performance Orientations, respectively – and they are powerfully linked to goal commitment and performance. People who believe their abilities can grow are more likely to thrive in a lean and unknown environment.
Next Steps
Understanding how to best build a strategy that will grow your success is critical. However, using tools such as pre-employment assessments and structured interviews can identify people with the unique qualities needed to help you achieve your strategy is equally crucial. Are you working hard to meet your annual targets but hope to be set apart from the rest? Hire people with resilience, optimism, and a belief in their ability to grow and achieve. Selecting for these qualities is just as important as setting the right goals and strategy.
To help you hire strategically, we created an eBook that provides a comprehensive guide to hiring assessments. In this guide you’ll learn about the types of assessments, how they are developed to measure future performance, and how to best include them as part of a positive candidate experience. Get your free EBook: The What, Why, and When of Assessments.
Resources
Mission impossible? The paradoxes of stretch goal setting. Management Learning. August, 2016.
The Stretch Goal Paradox. Harvard Business Review. January-February, 2017.
Outperforming whom? A multilevel study of performance-prove goal orientation, performance, and the moderating role of shared team identification. Journal of Applied Psychology. November, 2015.
Positive Organizational Behavior in the Workplace: The impact of hope, optimism, and resilience. Journal of Management. October, 2007.
