Using Stretch Goals Wisely

Visions are supposed to be bold and require goals that involve a serious stretch to achieve them. Successful organizations with resources can pull this off; failing organizations grasping to solve current problems will fall short.

While this seems obvious, associations and nonprofit leaders can glean some important insights about adopting bold goals from an analysis by management professors Sitkin, Miller and See in The Stretch Goal Paradox, Harvard Business Review. In their analysis, two factors matter most: recent performance because a winning spirit enables people to take bold actions; and slack resources that enable organizations to try new ideas or absorb failures. They find “failing but grasping” organizations more likely to attempt stretch goals out of desperation, while winners with available resources can grow complacent; it’s too easy and comfortable to keep doing what’s working.

In my experience, most associations and nonprofits are likely to be what these professors describe as either “confident but constrained” or “discouraged but capable”. When resources are tight, they are wiser pursuing small wins to “build momentum, energy and resources and foster learning.” If they have resources, they need to create a culture of experimentation and use small losses to build resilience and confidence.

If an association sets bold goals it should choose objectives and initiatives that aim for incremental change. This won’t immediately yield dramatic results, but I’ve found it is possible to manage expectations and still inspire excitement and innovation.

What proves more challenging is securing the time and resources to try new things. For business, the professors recommend building slack resources by shedding inefficient units or pursuing mergers to gain the resources. For associations this usually means shedding low-value programs and services. In membership organizations there is almost always a small constituency for anything a board or management team might propose cutting.

I continue to believe that organizations are much better off adopting stretch goals even if they fall short. By trying, they move closer to achieving their vision. After reading this analysis, I will be more cautious that over-reaching can have a downside risk to credibility and morale. These professors also encourage organizations to strive but to use stretch goals wisely. I agree wholeheartedly with their closing advice:

“Shoot for greatness. But greatness doesn’t always come from dramatic steps. Sometimes it comes from small, persistent steps.”