Understanding and Implementing Stretch Goals for Employees

According to research, setting specific, challenging, and ambitious goals (high-effort, high-risk) has been found to yield better performance outcomes in 9 out of 10 cases, compared to setting easier objectives. Clearly defining and striving for demanding goals tends to drive stronger performance.

Curious about the stretch goal meaning  and how to effectively implement it for your team? We’ll dive into the details on how you can integrate stretch goals into your employee development strategy, helping you unlock their full potential and drive growth.

Read next: Understanding and Implementing Quarterly Goals

What are stretch goals?

A stretch goal is an ambitious objective that requires high effort and carries a level of risk. It is intentionally set above normal standards to drive growth, see new opportunities, and gain valuable experience. By setting stretch goals, employers can help their employees break free from complacency and strive for high performance.

While it’s true that stretch goals are not expected to be fully achieved; their purpose is to inspire growth and push employees and teams beyond their comfort zones. 

When a stretch goal is met, it’s rewarded as high performance. Conversely, missing a stretch goal should not be viewed as low performance, but rather as an opportunity to learn and improve.

Relevant reading: Performance Review SMART Goals: 18 Examples to Drive Results

What are the benefits of stretch goals?

stretch goals meaning

Now that you know what stretch goals are, what do your employees stand to gain from setting these goals: 

Enhanced innovation and growth

One of the main reasons for setting a stretch goal is to motivate your teams and employees to think creatively and unconventionally.

For example, if your marketing team sets a stretch goal to grow your social media engagement by 40% within 3 months, the goal can push them to come up with creative campaign ideas and proven strategies to help drive social media engagement for the brand. 

Increased employee motivation and engagement

Having a stretch goal can also inspire employees to strive for excellence, which can improve employee engagement

A perfect example can be your sales team setting a stretch goal to exceed monthly targets by 30%, this gives them a sense of unity and motivation as the team works together to achieve the objective. 

Improved performance and results

To have improved performance and better results, you can set a stretch goal to help employees work more efficiently. 

Take for example, if you have a SaaS company and your software development team sets a stretch goal to develop a new feature on the app within 3 months, this goal can help create a clear target for the team which leads to increased efficiency and performance and can give you an edge to continuously improve your product.

What are the characteristics of an effective stretch goal?

Knowing what defines an effective stretch goal is an important step in implementing it. Here are some of the characteristics to look out for: 

Ambitious but achievable

Creating ambitious goals is not bad as a stretch goal should be challenging but is still possible to meet in a set time. 

See an example of this context, if you own a startup with no social media presence and your social media marketing team wants to target reaching your first 1000 followers in 3 days, that’s an ambitious goal, the question is “Can it be achieved?” Depending on the type of content and approach, yes. 

Specific and measurable

Your stretch goal should be clear and well-defined, with a specific target to aim for, much like a SMART goal. Specificity is needed as it increases the likelihood of measuring employee or team progress, providing a clear direction and focus. 

Having a specific and measurable goal ensures potential roadblocks are avoided, and the team’s progress can be tracked and celebrated. This enables the team to stay motivated and engaged, while they work towards a common goal.

Time-bound

A stretch goal must also have a clear deadline or timeframe for completion, this gives the employee or team a sense of urgency and focus. Without deadlines, goals can become vague and unachievable.

For instance, if your product development team aims to launch a new product, having a clear timeline such as 7 months or making it into a quarterly goal can lead to more effective planning and execution. At the end of the deadline, the goal can be evaluated, and improvements can be made as needed.

Aligned with overall objectives

A goal that doesn’t align with your company’s overall objective is meaningless. Every stretch goal should be an integral part of the plan to drive business growth and fit into company values

A common business objective is customer retention, let’s take for instance your customer service team sets a goal to reduce customer complaints by 35% within the next year. This is aligned with your overall objectives, making it a good example of stretch goals.

Here’s a good example of how your stretch goals should look like: 

The marketing team wants to increase website traffic by 100,000 visitors in the next 6 months (specific and measurable, time-bound), this will be done by using a new social media and content marketing strategy (ambitious but achievable), which is expected to help drive sales revenue (aligns with overall objective).

What are the differences between SMART and stretch goals?

The main difference between SMART goals and stretch goals is how realistic they are and their completion status. 

SMART goals, which stand for 

  • Specific
  • Measurable
  • Achievable
  • Relevant, and 
  • Time-bound, 

are designed to be attainable and focused on completion. 

Setting SMART goals gives you a clear target and an expected end. On the other hand, stretch goals are visionary, serving as a guiding ‘north star’ to inspire and motivate teams towards high performance.

When it comes to stretch goals, they are meant to challenge employees and teams pushing them beyond their comfort zone. It takes creative thinking and problem-solving to achieve a stretch goal. You can break it down into a series of smaller, achievable SMART goals that contribute to the progress of the larger end goal. 

How to implement effective stretch goals?

There’s the stretch goal paradox where setting effective stretch goals is challenging

If they’re too difficult, employees can start to become unmotivated and burned out. And if they are not ambitious enough, they won’t push them or drive growth. Stretch goals are best used when employees or teams are on a high-performance streak with sufficient resources, not when morale is low or current goals aren’t being met. 

This brings us to tips on how to implement effective stretch goals: 

  1. Involve your team when setting goals

We believe that stretch goals should be a collective effort, not just an instructed directive. Involving your employees and team in the goal-setting process will make them motivated and invested in achieving the goal. It’s also an opportunity to ask for their perspectives, knowledge, creativity, and ideas and use them.

You can have a team workshop or brainstorming session to discuss and define the stretch goal. Open-ended questions like “What’s the most ambitious outcome we could achieve?” or “What would make the biggest impact on our business? can also prompt them to think deeply and share their ideas.

  1. Break down large goals

It can be overwhelming if stretch goals are too broad or vague. The right thing is to break them down into smaller, manageable objectives that are challenging but achievable. Doing this will give your team or employee a clear roadmap for achieving the goal and keep them focused.

For example, if your team’s stretch goal is to “improve customer experience by 50% in 3 months,” break it down into smaller chunks like:

  • Conduct customer surveys and feedback sessions within the next 4 weeks
  • Develop a new customer relationship management system within 3 weeks 
  • Launch a pilot program for personalized customer engagement within 5 weeks

These smaller objectives are still challenging but can still provide a clear direction for your team and help in monitoring your key performance indicators (KPIs).

  1. Provide resources and support needed

Stretch goals sometimes require new skills, knowledge, or tools. Providing your team with access to the necessary resources and support to succeed is needed for the effectiveness of the goal. 

The resources and support can be: 

  • Financial resources like extensive budgets
  • Human resources
  • Leadership support
  • Mentorship
  • Informational resources such as training and workshops
  • Feedback and guidance
  • Recognition and rewards
  • Technological needs like relevant software or hardware

For a more practical example, assume that your marketing team sets a stretch goal to increase social media engagement by 500% within the next 6 months. To provide resources and support needed, you can choose to:

  • Allocate $10,000 for social media advertising and content creation tools
  • Hire a social media specialist to join the team
  • Provide training on social media analytics and content creation
  • Offer regular feedback and guidance from the VP of marketing or Head of Marketing
  • Celebrate milestones, such as reaching 10,000 followers or achieving a 20% engagement rate
  1. Embrace failure as learning

As we’ve discussed, a stretch goal is not created as a mandatory achievement, failure is a natural part of the process. You should teach your employees and teams to embrace failure as an opportunity to learn and grow, rather than a discouragement.

If your customer support team’s goal for personalized customer engagement doesn’t yield the expected results, you can use it as a chance to:

  • Analyze what went wrong and areas for improvement
  • Refine the approach and try again
  • Celebrate the effort and progress made, and recognize the team’s willingness to take risks

This will help keep your team motivated rather than just sulking over not achieving the set goal or objective and key results (OKRs)

Unlocking Peak Performance with Omni

stretch goals

Setting stretch goals serve as a powerful framework for obtaining organizational objectives, offering a structured approach to measuring progress and achieving goals. 

In today’s dynamic work environment, the Human Resource Information System (HRIS) has become indispensable in effectively managing and aligning these goals. 

Omni’s all-in-one employee management software empowers managers and People leaders to leverage automation, digitizing the people management process. Set and track employee stretch goals, performance review cycles, and gain real-time, actionable insights on employee performance in one, easy-to-use platform.

Book a demo with our team today to learn more about how Omni can help you transform your business and help your teams achieve their stretch goals.

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