01 Aug 2008  What Do YOU Think?

Has the Time Come for “Stretch” in Management?

Summing Up HBS professor Jim Heskett sums up comments from his readers on the topic of stretch goals. Does stretch still make sense as an organizing principle? What, if anything, should be done to ensure that stretch is allowed to flourish in companies today? What do you think?

 

Summing Up

Stretch—its meaning, uses, and pitfalls—could fill a book, judging from responses to this month's column.

First, there appears to be limited agreement about what stretch is and how it works. Some saw it as a variation on long-range planning. Others saw it as a strategic planning tool. Yet others viewed it as a means of getting more for less out of people, something to be tried when other approaches don't work. Howard Esbin likens it to "strategic scenario planning or futurism. The more one is able to ask 'what if' and 'why not', the more creative and abundant the results will be."

It raises the question, would we know a stretch goal when we see it? Perhaps the best response to that question was from Sujeet Prabhu, who commented that "Stretch goals are goals (which), if achieved by your competitors, could drive you out of business."

There was some agreement that stretch, by itself, is not a useful management concept. Nishant Miglani pointed out that "as a complement to stretch, GE also had this notion of the 'boundaryless organization' ..." Matthew Tuttle suggested that "Stretch goals have their place, but need to fit within the organization's abilities." Stephen Denny advised that "It takes a management culture with drive, consistency and a strong dose of killer instinct to make stretch ... stick." Anju Kotwani advanced the opinion that "'Stretch' works better in organizations where some rules can be bent to achieve organizational efficiency ... (by) highly motivated and committed staff with the passion to overachieve." Further, it is thought to work best in cultures where people have the latitude on occasion to fail (or as Mariana van der Walt put it, "having a culture of learning from mistakes") while attempting to achieve the goals. Joe Violette advised that, in his experience, stretch goals "have only succeeded (when) they are developed by the project team" (vs. management).

The downside of stretch as a management concept was expressed most memorably by Greg Della-Croce when he said, "Stretch ... allows those with the biggest vision to express it in a tangible way… However, in my experience, it is also used in the same way the rack was used." Carl Binder pointed out that "... stretch goals have led mostly to intentional fuzziness and obfuscation as schedules slip and targets are missed...."

Above all, leadership is generally thought to be critical to the successful application of stretch. Edward Hare reminded us that "the essence of great management, leadership even, is applying the right tool, at the right time, with the right emphasis, that 'fits' the situation and the people involved." Ryan Jones pointed out that most successful applications of stretch have involved the "presence of a strong and visionary leader." Given the long-term nature of stretch, several raised questions about the tensions created between the long-term vision and short-term realities of the need for performance. Mike Flanagan asked, "Why have goals that are strived for in 10 years when the CEO and others will be gone?" And Kathryn Alexander asked why, in those companies in which employees are "free to explore their dreams and ideas," stretch is even necessary? As she put it, "Stretch goals seem like a crutch to me."

What do you think?

Original Article

The leadership of General Electric introduced the management concept of "stretch" in the 1990s. The idea was not just to create extraordinary goals higher than those thought achievable for the coming year. It was to set outlandish, almost unthinkable goals that business groups might achieve in the longer-run. For example, instead of striving for an inventory turnover (sales to inventory) ratio of 4.5 instead of 4 in the coming year, a stretch goal would be a turnover of 10 in five years, with improvements toward that goal recognized and rewarded on a year-to-year basis. One goal of this philosophy was to eliminate the time-wasting annual budgeting game in which middle managers would argue for 4, top management would argue for 5, and they would both know in advance that they were going to end up with a goal of 4.5.

In my experience, GE's "stretch" was often confused with annual business planning concepts that used the same term. I'm not aware that it ever gained much acceptance. But are we at a point where it may come into fashion? For example, I was reminded of stretch when the goal of a 50 percent reduction in carbon emissions by 2040 was at least informally agreed to at a recent economic summit. In that case, the end date was conveniently set so far in the future without any provisions for recognizing progress that the effect of such an agreement may have been fatally compromised. But at least it was discussed and publicized.

Is it time to revisit stretch? For example, if the concept had been employed in Detroit, would the American auto industry have found itself in the position of being caught flat-footed on the issue of fuel efficiency? Granted, Detroit was busy catering to consumer demands for more profitable, lower-mileage vehicles. But at the same time, could stretch have given greater urgency to responses to alternative needs in at least its tech centers? Now that its consumer world is changing, will Detroit adopt the stretch concept in the development of, say, 100-mile-per-gallon vehicles by 2012?

There may be reasons why we will increasingly underestimate our capabilities, giving greater credence to stretch. We are learning more and more about how our brains function and the conditions that foster creativity. Combined with the development of new communication technology that connects information workers (and their brains) at precisely the moment that a new generation of workers trained in the use of the new technology is joining the ranks of both information workers and their managers, can we expect a flourish of innovation greater than anything we might be expecting? What might stand in the way of this achievement of stretch? A lack of understanding on the part of managers of new ways of organizing information work and workers? Increasing "burnout" of knowledge workers confronted with a barrage of data and distractions delivered by new information technologies? A reluctance on the part of managers to relinquish "ownership" over activities and processes needed to achieve stretch? What, if anything, should be done to ensure that "stretch" is allowed to flourish? Or is this just another management concept whose time has passed? What do you think?

Comments

    • Paul Cox
    • President, People, Ideas & Objects

    Are we there yet?

    If man has leveraged one barrel of oil to offset the equivalent of 18,000 man hours of work. I think it is reasonable to assume that the same capability should be expected of our intellectual pursuits.

    Have the Information and Communication Technologies provided anywhere close to the leverage we should expect? Is management the impediment to this possibility? Will the systems we use today bring us to our full potential? I think this forum will provide the answer.

     
     
     
    • CJ Cullinane

    Stretch goals do have a place in planning, and being a long time student of General Electric I have used them in the past. Stretch goals foster the investigation and use of new technology and disruptive innovation. It forces us to think 'bigger' than we usually do and look at options we may not have in the past.

    The more alternatives and options we have the better our decisions, stretch goals help get these alternatives and options. Often new technologies and concepts need a 'stretch' for us to use them. The old habits and the "this is the way we always do it" attitudes can stifle creativity and 'out of the box thinking' but stretch goals force us to think a bit differently.

    For anyone who has not tried stretch goals, give it a try you have nothing to lose and a lot to gain.

    Charlie Cullinane

     
     
     
    • John Nicol
    • Head of Process Consulting, Nokia

    This concept of "stretch" is already well established among Toyota management. Please refer to HBR June 2008 article - "The contradictions that drive Toyota's success".

     
     
     
    • Jarrod Hammes

    If a management team is cognizant of performance limits, then prior benchmarks and traditional metrics of appropriate scale are useful for future performance measurement. However, it seems that the allure of stretch goals is the seemingly risk-free organizational stress that fuels innovation. But is "stretch" risk-free? Perhaps a dynamic weight-biased plurality of current metrics help bridge the gap between current goal-setting practices and stretch goals.

     
     
     
    • Dianne Jacobs
    • Founding Principal, The Talent Advisors (Melbourne, Australia)

    For the art of stretch to flourish as part of corporate alchemy, skilled leadership is required. It sounds almost counter-intuitive, but getting to stretch is a balancing act.

    The setting of extraordinary or unthinkable goals can trigger interesting reactions. Whenever we initiate such changes we activate the fight-or-flight-or-freeze response. If the goal keeps us operating comfortably within our existing habits and mind-sets, there is no impetus to find a new way. If the challenge is far beyond our scope of experience as to be overpowering, then eustress becomes distress. It is the area in the middle that keeps us in our thinking brain and where we have access to our creativity. This is where true change occurs.

    The test for leaders is to shape an environment where goals are sufficiently forward-thinking and inspirational, while the resulting incremental attainments are anchored to the present.

     
     
     
    • Deepak Alse
    • Project Manager, Wipro Technologies

    Isnt 'Stretch' the same as 'Aspiration'? Stretch comes from the ability to set a moving target that moves the team forward in an operational rhythm. It is not the same as dreaming big - In essence, it comes from believing that, given the right values,environment and direction, goals will be achieved through an evolutionary process. Stretch will flourish when we invest in 'organisational learning' as a fundamental process, when we focus on developing leaders with a system orientation, leaders who view the organisation as a social structure in continuous evolution. Stretch will flourish when leaders in the organisation set operational plans focused on the value they intend to bring to the society!

     
     
     
    • Stephen Denny
    • President, Denny Marketing

    Stretch goals were the norm, not the "stretch", at Sony during the '90's. These over-the-horizon goals were largely developed collaboratively with top management from Japan and once negotiated became the benchmark against which we were all measured. Budget and "revised budget" were bureaucratic niceties -- the stretch was the goal that was on everyone's minds.

    It takes a management culture with drive, consistency and a strong dose of killer instinct to make stretch goals that stick. Not many companies have this in their blood!

     
     
     
    • Kumar Kunal Kamal
    • Research Fellow, IIM Indore

    Stretch is here to stay. What companies need, is to answer the question - What kind of stretching do they want? Whether they want to stretch in order to go for maximum exploitation of present resources, or they want to stretch so that they can explore newer resources?

    In terms of Human Capital, what companies can do is to get maximum return out of a single idea/invention (exploitation), or they can keep on getting average returns by ceaselessly creating newer ideas/innovations (exploration). Both these methods would ultimately pay.

    "Whether to stretch in terms of exploitation or in terms of exploration?"

    That depends on the decisions which the management takes and the externalities which an organization faces. For example, earlier there was no such need for Detroit to invest heavily to increase fuel-efficiency, but with the rising fuel prices Detroit might consider investing hugely in R&D to fund research in construction of fuel-efficient vehicles. GE 's example is unique because Jack Welch did not wait for externalities to lead his decisions, instead he invested both in exploitation (six-sigma initiative, 1995) as well as exploration (e-initiative, 1999).

    "To stretch in which direction: Exploration or Exploitation?"

    When the resource at hand is Human Capital, it will be a tough decision to make for any organization. Because a lot would depend on the company culture, team decision making, team cohesion, motivation to work, etc. A safer approach would be to make a balance between the two ways of stretching: some people producing ideas, some nurturing them, some doing both these activities. People would be free to choose want kind of stretching activity they are interested in; this would also ensure that the people take ownership of their activities, and are motivated to work. Managers can then set the pace of stretch.

     
     
     
    • Mike Flanagan C.P.M.
    • Purchasing Mgr

    Stretch goals seem to be acceptable when the overall strategy of the company is long range also. Why have goals that are strived for in 10 years, when the CEO and others will be gone. If a company is only into short range, then do the old fashion goal system.

    I believe Japan does long range planning of 50+ years. Inside of this are goals and a real plan to get where they want to be. With stretch goals, lets shoot for 50 years of planning and get everyone on board government, public business, private sector and non-profit pointed in the direction of the set stretch goals.

     
     
     
    • Anonymous

    As long as stretch goals are used as a long term goal, I think they work fine. At Honeywell we're getting to the point of having stretch goals for the current quarter, and I think it's lost its true purpose. Some leadership as to how we can get to the stretch goal and how it was arrived at, would be beneficial. Too many US companies try to micmic GE without getting the full understanding of the concepts and processes.

     
     
     
    • Phil Clark
    • Clark & Associates

    If you tie "stretch" to dollars, you lose. Your mind has already placed limits on creativity. If you are concerned "stretch" may include exploitation, we all lose. "Stretch only applies to the human spirit and mind. I find the best examples in science fiction. Look at all the impossible things thought of in the 40s and 50s that are our way of life today. Real "stretch" touches future generations and transcends business decisions.

     
     
     
    • margie parikh
    • Lecturer, BK School of Business Management

    Why should time 'arrive'? We study the GE case because JW made it happen and not merely because he was forced to. Following your argument I can see that times have arrived and are languishing in so many sectors, for so many issues, but little happens because the leaders who dare to force people to give up their comfort zones and adopt new patterns - of conceptualizing and acting.

     
     
     
    • Matthew Tuttle
    • Founder, Pure Performance Coaching

    Stretch goals have their place, but need to fit within the organizations abilities. Otherwise, it's meet the goal at all cost - a short term solution. Leaders need to understand how the goal affects their people. Many might be coping to make it work and end up burning out. There needs to be a safety valve to accommodate the extra stress from pushing at such a hard pace. The best way, as always, seems to be through buy-in and collaboration.

     
     
     
    • Tom Weston
    • President, Thomas Weston Consulting Group

    Interesting term "stretch goals"! First, it implies that there is a goal process currently in place and it is working to meet the needs of the business and the people impacted. If the current process is not working at a consistent high and rewarding level, that satisfies the needs of the organization, then to move to the next level -stretch- will lead to frustration. Second, there has to be total support for moving into a higher level of goal setting/reward process. Too often the senior leadership fails to thourghly assess the impact on the organization (+/-) relative to expected measurements and quantifiable results. Also the "organization parameters" for stretch activities is usually not clearly defined relative to cross functional issues and potential conflict(s) that will arise when aggressive behavior is set in place with potential high rewards.

    If the above areas are addressed by senior management and the process is clearly presented to all impacted, then the "stretch process" can be a very strong tool. This tool is best illustrated by those companies that have a clear understanding of who and what they are, as well as who and what they are not. In my experience, too much time and energy was wasted in debating the merits, after the goal(s) were in place.

    The culture of the company has to be forward focused with the capacity to embrace the change that "stretch goals" can and will deliver. The addition of this process takes time and wisdom to fully integrate into the organization with a tolerance for change.

     
     
     
    • Sam Felton
    • Publisher, SMDB, Ltd.

    Charlie is correct, and at that time GE needed stretch goals selectively to supplement its more prevalent narrow focus on the current year's results.

    In 1997, Collins and Porras, explored Stretch Goals - 'Big hairy audacious" ones, in their best-selling book, "Built to Last." It's worth revisiting.

    It's a great tool to use at the right time, and it takes an exceptional CEO to sense when that is, and which of his/her organizations should use them, and to wisely guide its use, funding, and rewarding its champions over time. I wouldn't use them across the board in a large multi-business oranization.

    Sam

     
     
     
    • Rowland Freeman
    • retired, sort of

    Stretch management sounds like a redo of strategic planning, which properly implemented, requires review and amendment of the strategies every year with a new implementation plan. However since many strategic plans never got implemented, most plans sat on the shelf, and long range strategies were never again addressed and incentive rewards were based on annual performance. Stretch management brings back long term objectives, and should be a "stretch" and perhaps will get our industry once again motivated to excel long term instead of focusing on the short term.

     
     
     
    • Howard B. Esbin, PhD
    • Research Director, Heliotrope

    Einstein said imagination is more important than knowledge. Stretching is like strategic scenario planning or futurism. The more one is able to ask 'what if' and 'why not', the more creative and abundant the results will be. This is amply borne our in processes like Appreciative Inquiry, which gets entire organizations to engage in picturing and expressing what a positive future can look like. Stretching one's imagination like stretching one's muscles should be a warm up for vigorous and productive activity.

     
     
     
    • Ruby
    • HR Manager

    I agree with Rowland. Stretch "appears" to be a modern buzz word for strategy. Look at a personality type of an INTJ, or as Meyers Briggs would call the Scientist or Mastermind. To this personality type the world is full of possibilies and the INTJ would like nothing more than to "stretch" towards these lofty outcomes. In fact their aim is maximum efficiency. Now having the right culture to support these groups or personality types is critical. In the aforementioned companies they must have had leaders who empowered their employees. It's truly the executive staff's leadership abilites to "allow" the employees to determine how far they can really go and not limit those who are incredibly more capable of achieving these goals rather than the executives themselves.

     
     
     
    • Kathryn Alexander
    • President, CEO, Ethical Impact, Inc.

    Stretch goals are really a way to try and "force" innovation in a culture that is too rigid and too fearful to actually creatively express themselves through business. The whole idea that with out "force" people will become mediocre is proof enough that the leadership and culture cannot support true innovation. In those companies (W. L. Gore & Assoc. comes to mind) that foster employee power and independence "stretch" goals are not needed as people enthusiastic about their work and free to explore their dreams and ideas create products and results that were not even imagined. Stretch goals seem like a crutch to me.

     
     
     
    • C. G. (Shekhar) Moghe
    • Independent Management Consultant

    "Stretch" has been in vogue for a long long time, specially when corporations announce their intention to grow "inorganically", which is another way to recognise that you need to introduce "stretch" but can not, given the existing parameters like organizational capabilities.

     
     
     
    • Ulysses U. Pardey, MBA
    • Managing Director, Am-Tech, S.A., Panama, Republic of Panama

    Has the Time Come for "Stretch" in Management?

    Let us consider two situations, the present and the greatest future of a business for the sake of an illustration:

    Today's daily business operations: What is the "ready-to-get" own-maximum growth-and-efficiency (own-maximum) a company could generate with its own "ready-to-use" resources (people, things and time), and when?

    For how long could a company sustain this effort?

    Outlandish goals in the longer-run: Hopefully, sooner or later they will become today's daily business operations. Whether or not the company can generate the "ready-to-get" own-maximum, how could it meet the challenge of almost unthinkable goals in the longer-run, a beyond-own-maximum growth-and-efficiency? Are these two items - present and greatest future - related in a straight line (first this and only then that) or could they coexist and be performed simultaneously within the same company with the same resources? In other words, could a company with its own "ready-to-use" resources deal with its present, the daily business operations, and at the same time take care of its greatest future, the outlandish goals?

    It is very possible that the greatest future of a company looks better than its today and that the own-maximum and beyond-own-maximum link of a business might require additional resources not envisioned so far. For instance, in regard to people and their professional success, are bottle-necked management-solutions (the higher, the less) the ones which favor the most, the company's own-maximum today and its beyond-own-maximum tomorrow?

    In the mindset of a workplace, growth and efficiency as primary foundations of a business must be favored at any point in time.

    "A stretch goal or beyond-our-maximum goal" could be one of the innovation triggers to push us to think about the variety of possible ways to build the making of that specific goal. Therefore, a "stretch goal or beyond-our-maximum goal" might stimulate workable and profitable answers to the question "how to turn existing resources into an "it-is-done"?

    It is highly possible that regardless of the company size and place, mergers and acquisitions, and alliances might be additional workable business-solutions in real-life situations; and the appropriate management-and-leadership-followership solution should go for them enthusiastically.

    It seems to me that a "stretch goal" is a fine idea and a great initiative which could certainly favor people-and-profit growth; however, the term "stretch" might be unfortunate, as it could be translated as "fully-extended" which then could induce to consider the present greatest-future relationship of a business as linear, and ? priori real-life situations are not.

    The above could be among the reasons why "stretch goal" is worth to re-examine as this subject could be turned into a marvelous opportunity to advance management concepts and terminology in order to better support the world of business and society.

     
     
     
    • S. Jain
    • Customer Care Executive, Punjab National Bank

    Stretch goals when set for short term achievement either result in burn out or soon lose their sanctity as workers start perceiving the management as unrealistic and therefore non-serious.

     
     
     
    • Sweta Mohapatra
    • Consultant, Cerebrus Consultants, India

    'Stretch' is an inspirational word and reminds me of Jonathan in the the 'Jonathan Livingston' seagull. Stretch symbolizes getting closer to your highest potenital. If there is a compelling vision, commonly shared among the members of organization, stretch goals are easily cascaded, driven and achieved. And not forget rewarded !!And in absence of that common passion, junior and middle managers percieve it as merely one of the management / leadership jargons to get more work done while compensating the same.

     
     
     
    • Swati Yadav
    • Assistant HR Manager, ITC

    If the analysis of the Brain Loading (similar to Work Loading Study done for workmen in a factory) of the employees of an organization is carried out, it would definitely throw up a huge scope of stretching the contour at which we currently are.

    There are very few companies like Toyota, Detroit, GE & Sony which have undertaken this exercise in a structured format. Usually a stretch in the organization surfaces when the company is experiencing rough waters or foresee it coming. In this scenario its usually a "reaction" to the situation than a well "calculated action". This can create ripples amongst employees who might perceive it as 'trouble times ahead'. This scenario can hamper the current productivity of the employees, stretching themselves would be extremely difficult.

    Nonetheless stretching the targets for any company would translate it into a more profitable, creative and lean organization. To accomplish this the companies should ensure there is a Stretch Plan which is accompanied by a cushion to the employees on ensure that there isn't a burnout of the resources.

     
     
     
    • Lawrence
    • Accel Frontline Ltd

    We should be careful that Stretch does not become a Strain.Stretch Undergirds all Growth. Without Stretch where is Growth? Stretch resonates with BHAGs(Collins & Porras-Built to Last). As with Exercise, in Planning certain Disciplines should be followed without which planning will be an exercise in futility.

    Some pointers to those disciplines would be: 1. Stretch should be in sync with Vision. 2. Stretch should strengthen the Mission. 3. There should be an Active Commitment from the Top Management. 4. Highly Mature Industries should be Careful on what they stretch on. 5. Robust Execution.

    Disciplined stretch is very much needed for Companies aspiring to Grow.

     
     
     
    • S.S. Rajeshwari

    The concept of stretch can be used by the organizations even today. It is more relevant for those employees who do routine jobs. The concept of stretch if used in an organization gives the employees an opportuinity to think and explore ideas to meet the unthinkable goals. As everyone knows the capacity of human brains do not have limits. This opportunity may trigger some valuable thoughts which can make wonders to the organization and to the society as well. It is the management's responsiblity to create such opportunities which will give dual benefit of employee satisfication and overall organization benefit.

     
     
     
    • Mayur Vegad
    • Engineer

    Hi,

    'Stretching' has been on the scene since the start of any enterprise. It has played a vital role: 1) To sustain under unfavourable circumstances. 2) To improvise the product either driven by competition, passion or just awareness of the responsibility to provide a sustainable product.

    It resurfaces itself automatically by the principle of necessity. Hence it can be termed as a management concept which was already there but was identified and named as a management concept.

    For a small example, the capacity of the 'developing nations' to stretch has played vital role for winning the jobs and promote outsourcing of the same from the developed nations.

    The stretch is triggered by the scarcity. So in order to 'stretch', scarcity should be communicated and should be made perceptible, there by making the people feel the necessity to 'stretch'. If done proactively, people will be happy to be involved.

    Thanks.

     
     
     
    • Hardik Dave
    • Senior Executive, TVS Motor Company

    As very rightly pointed out by Sam, it was situation-specific that this tool was used at GE. If used in the Indian organizations to be particular; it tends to fail more often than succeed.

    But then if taken in positive light, this can be an extremely effective catalyst throwing up a huge lot of ideas that otherwise would have remained just potential, pretty much in the way as Esbin has mentioned.

    I think that the top management in any organization should support it as an infromal yet serious initiative & reward those who contribute positively towards achieving such goals + it can also lead to exposing & bridging the gaps that were unexplored till then.

     
     
     
    • Moshe Zalcberg
    • Cadence

    Usually, the "normal goals" are the ones expected out of our current business procedures. Therefore, more important than the "strech goal" itself is the thinking process on what needs to be done differetely and changed in order to achieve such improved results.

     
     
     
    • Vaidya Nathan
    • Global Innovation Leader, Cognizant Technology Solutions

    Yes, "Stretch" has to be a concious principle in Management. Our professors did it during our school days and ended up showing that we are more than what we thought we were. High-performance athletes do it and go on to set records and stuff like that. Entreprenuers routinely do it and threaten the status quo.

    While earlier it was allright for an established organization to not worry about this since the time for the change to make visible impact on the organization was not that high. We live in times, where that is no longer the case. "Stretch" goal is a necessary condition to get the change into an opportunity. As I look at it, most of the practices we are following is based on assumptions based on conditions that pravailed at that far time. Most of them are getting un-earthed and reset. "Stretch" goal is a good structure to make it a part of 'way things get done'.

     
     
     
    • Anonymous

    I can offer another example of stretch being misused as it was used as a short term tool to enhance current revenue growth at Thomson. It seemed to have little or no effect, and quite possibly the reverse because management would save there "cookie jar reserves " for that inevitable meeting when senior management would ask "what else do you have " and those that had an answer that worked were amply rewarded.

     
     
     
    • Shaiful

    Stretch Management can be tricky to implement. We can justly find 'well-stretched' person or 'well streched' group of people from the same set of environment which attributes to their upbringing - well deprived environment. This attributes of deprivation can be strategic and non strategic, for example after having survived mass persecution which subject to hunger , mass killing or torture because of political difference or strategically in a modern day persecution can be described as ' psychological persecution' can be justly found in these days of what often called Information Age and also globalization and what it brings, can pontentially produce well stretched people aftermath.

    Managing in this environment as well as to achieve certain goals is predictedly choatic and require highly fluid manuver. May be I would fondly relate this to what Andy Grove has adopted in his management style during his tenure in Intel by what he called 'strategic chaos'.

     
     
     
    • Sameer Kamat

    Several global companies (specially in the engineering space) that are currently executing the concept of 'stretch' have adopted a novel way to ensure that a balance is achieved between their long term targets as well as their short term goals. Here's an over-simplified summary of their strategies.

    Step 1: Set ambitious targets that have a time-horizon of 3-5 years. For instance, double the top-line in the next 3 years. This time-horizon is driven by the nature of the goal and the business that the company operates in. In an age where companies hand out 'long-service' awards for those completing 5 years, any plan that's way out into the future (10 yrs) may seem like a joke.

    Step 2: Using a bottoms-up approach, evaluate how much of this can come from internal organic growth and if there is a need to resort to inorganic growth options (i.e. mergers, acquisitions, joint ventures etc). The streched goal was communicated in a top-down manner. So it's important to work back up from the other end to validate it and ensure that the leader's vision still appeals to the lesser mortals who are now expected to execute it.

    Step 3: In parallel, continue with the annual planning process as well. Tie in the annual goals with the long-term ones. The end objective here is to go beyond the quarter-by-quarter approach and have something to offer that's substantially greater than the sum of its parts.

    Sounds simple and logical in terms of the concept itself, but executing it successfully can be a nightmare. Coordinating this initiative across countries and businesses, where opportunities and growth prospects vary considerably can be a big challenge. For instance, a multinational may set higher targets for its operations in BRIC countries as opposed to say its European operations.

    However, what goes in favor of this strategy is the fact that accountability of the current set of managers isn't compromised. There is a conscious attempt to be as practical as possible while working on the annual targets as well as accepting goals that are stretched to their 'snappable' limits. Variable pay and bonuses are still at stake.

    Leaders who define 'stretched' goals have to be cognizant of this fact as well, in order to ensure that the risk/reward ratio isn't too skewed.

     
     
     
    • Anju Kotwani

    The concept of "Stretch" works better in the organizations where there is an open culture; in other words in the organizations where some rules can be bent to achieve organizational efficiency. Moreover, highly motivated and committed staff with the passion to overachieve is instrumental to the success of this management concept.

     
     
     
    • Paul Cox
    • President, People, Ideas & Objects

    Frankly I am surprised at the responses in the forum at this time. I am at a loss to find any post that mentions a product or service that stretch is being applied to. Has management become so disconnected from the businesses they operate in? Are we just going through the motions?

    These responses sound more and more like someone telling people in a Soviet era breadline that they must strive for more.

    Where is the application of Information and Communication Technologies? It would seem to me that the ability to move the product or service forward would require an integrated ICT support system.

     
     
     
    • Gerald Nanninga
    • VP, Retail Ventures, Inc.

    Three quick thoughts to keep in mind:

    1) When you stretch a rubber band, there is resistance. The same is true of stretch goals. Most of the current leaders in a business benefit from maintaining the status quo and resist threats to their current, comfortable power base. When setting stretch goals, make sure that you understand the implications they will have to established power bases in the organization.

    2) Vague numeric stretch goals, like "Double Sales in 3 years" don't provide much guidance. I can think of lots of ways to hit these types of vague goals which can ruin a business (not all sales are good sales). Milestones need to be linked to concrete, desirable business actions (like "putting a man on the moon by the end of the decade").

    3) Stretching tends to be incremental (albeit at a faster rate). Many times, we should be "leaping" instead of stretching. Rather than use an incremental stretch goal for miles per gallon (which still implies dependence on gasoline), maybe auto firms need to leap to a whole new technology. Be careful that the stretch goal does not just an accelerated continuation on a path which should be abandoned. Getting to obsolescence faster is not a great goal.

     
     
     
    • Bogdan M. Negru
    • Alcatel-Lucent Romania

    In my opinion there are two reasons for which stretch would not be accepted.

    Starting with the knowledge workers: As we live in an "instant" world, objectives that are so farsighted, are very stressful for companies used to bringing results in the short term, and being driven by those. "Pop-corn" kind of objectives/results are apparently the catalyst for knowledge workers. Changing their mind-set to stretch goals is indeed a challenge. This has to start through a more transparent-way of management (beginning with middle through top management) that would enable knowledge workers to realistically assess the present position, and compare what year-to-year goals bring relatively to stretch goals. Surely this might take some practical/pragmatic training in order to succeed.

    Continuing through Management positions: There is indeed a certain reluctance manifested by management to relinquish some activities that are in their possession: setting, assessing and overseeing long-term goals. Surely, un-communicated and un-criticized long-term goals loose their effectiveness. Whole departments will achieve short term tasks and goals, not-knowing they should/will serve to the fulfillment of a greater goal. Short-term achievements tied to stretch-kind of goals bring greater results, and many times unthinkable results! Own "pride " of managers to hold "control" over activities/goals/results/etc., combined with the lack of understanding the need for transformation in organizing information systems and workers, leads to "old" and "outdated" organizations, that will sooner or later be thrown out of the game. The challenge of shifting the thinking direction of information workers belongs to management, of course without undermining the potential of the first to innovate. Sharing this transition to the entire company is essential, but must only be done through presenting a scheduled plan for it in order not to create that "we're in trouble" attitude.

    Here comes change; how will we respond to it?

     
     
     
    • Nishant Miglani

    The idea of reaching beyond what seems achievable or even apparent, in my opinion, seems fundamental enough to be classified as timeless and applicable to most any context or circumstance. With respect to modern management, 'stretch' bears conceptual resemblance to 'BHAG' as proposed by Collins/Porras or 'strategic intent' as articulated by Hamel/Prahalad.

    Such ideas run the risk of either dismissal as ivory tower thoughts or deterioration into mundane exercises, lest they bring fulfillment and underlying them is significant commitment to see them through. Being what appeared as a complement to stretch, GE also had this notion of the 'boundaryless organization' where employees were empowered to steer across hierarchical, functional, external, and geographic boundaries in pursuit of lofty yet measurable ends.

    Stretch by itself will not work. Nor will it work with only the accompanying conventional sticks and carrots. In my opinion, it must be complemented fully by both a supportive environment and an internalized resolve.

     
     
     
    • Narendar Singh
    • Professor, Vidya School of Business

    There can be no invention, growth or even sustenance unless there is 'stretch'. The term coined by GE has been applicable since time immemorial and would continue in future also. It is essential in time of difficulties. No soldier can ever forget this to sustain and has equal applicability in business. To maintain the competitive advantage it is a cardinal which no management can afford to ignore.

     
     
     
    • Rakesh
    • BD Manager

    From the discussions that I read from this forum, I have following observations:

    1) It seems that people broadly agree the advantages of "stretch thinking" in medium to long term; though there are sharp disagreements over whether the same is true for short term horizon, for instance, annual planning.

    2) People cite examples of GE, Toyota, and Sony etc to suggest that stretch thinking has been successfully deployed there. Though, they caution that it should be applied selectively in different organizations. Depending on the organization cultures, goals, and setting, the stretch needs to be adjusted as well.

    3) People are arguing that stretch thinking will lead to Innovation, by citing terms such as Investigation, Creativity, Aspiration, Ambition, Explorative Unthinkable etc. Though, others argue that there could be alternative ways by which stretch thinking will help such as exploiting human capital.

    4) Furthermore, explanations are also provided on how stretch thinking leads to creativity: by getting out of the comfort zone to think of new ways.

    5) Leadership plays a big role in whether innovation will flourish in stretch setting- by making this an evolutionary process in the orh\ganization.

    6) Challenges to stretch thinking are: living in "instant" world that don't support the mind set required for stretch; management not being able to complete their duties such as communicating, critiquing;

    My personal view on the questions posed:

    1) With the kind of competitive world we live in, we will see more of stretch in not only business setting but also other settings such as politics. With globalization and improved ways of communication, things that used to take weeks or months are being done instantaneously. The competitive advantages for any company are copied very fast and things get commoditized. Awareness amongst customers and stakeholders are increasing, making them more assertive in their demands. In their pursuit of differentiation to enable higher profitability, successful companies address these issues by building long term sustainable advantages. Stretch thinking supports this basic objective by following a. Enable creativity by thinking out of box; getting out of comfort zone b. Force the audience to innovate to move towards those outlandish initiatives c. Exploit the true potential of the resources d. Create a sense of urgency to go to the next level e. Get proper attention from management/ leadership as they need to chase those big numbers 2) Consider few examples: a. Most of the free trade agreements have ambitious goals for bilateral/ multilateral trades for next 5 -10 years; experience shows that those are mostly exceeded b. Industry association set targets for sales of the industry from x billion to y billion and then provide enabling environment like getting concessions from government etc to make sure that those goals are met (Indian Bio tech industry is a case in point) c. Strategic planning process where usual 5-7 % growth is not targeted; by thinking about ways how the company can double the business in three years, the options are evaluated in a different context 3) Possible risks a. Short term objectives will get preference, for instance, CEOs first need to meet their QoQ numbers b. Execution: too much debate; improper critique of the plan and therefore not able to take the market realities; next year stretch session- adopt a different plan! c. Contingencies: Not able to anticipate what the market would be like in next 5 or 10 years ( in Jan 2007, few forecasted credit-crisis) 4) Countermeasure: a. Developing conceptual framework for stretch b. Long terms thinking to be part of company culture c. Driven from top leadership/ board d. Stretch need to be seen from context of horizon period

    In conclusion, I feel it is imperative that stretch become a management concept and deeper questions are asked about how organization can use this to create sustainable growth.

     
     
     
    • Wayne Carrigan
    • Executive Vice-President, ThinData

    Today, Stretch needs to be combined with Flex. We at ThinData create stretch goals but review them on an annual basis. We tend to think of it as having a navigation plan for a long-distance journey. Sometimes Stretch can create such a narrow focus that management won't change direction or chart a new course.

    Businesses that rely too much on Stretch can sometimes blind themselves to new opportunities or worse, disasters. Toyota might be a great example of Stretch, but so was the Titanic.

     
     
     
    • Sherpa

    Stretch is the additional effort required to attain the organization's vision. It is about implementing the strength needed to obtain THE magnificent obsession. It has little to do with budgets.

     
     
     
    • Paul Meshanko
    • Managing Partner, Edge Learning of Ohio

    The energy and impact unleashed by "stretch" can be industry paradigm altering. I watched it happen at AlliedSignal (under Larry Bossidy) back in the late 90s.

    There is an art, however, to managing the process. Well implemented, "stretch" creates the most emotional energy and support when there is great celebration and reward for successes...and failures along the way are simply viewed as a natural part of the process.

     
     
     
    • John Arnott
    • CEO, Strategic Design Management

    The semantic importance of 'stretch' is overblown in this context. I believe it is simply the preference for fundamental innovation rather than incremental differentiation. Both are appropriate in the right environment and the challenge for senior management is to know when each is appropriate. Most conglomerates will employ a menu of both to attain both short and long term objectives.

    I find in my practice, with mostly small and medium sized companies, that these choices become more critical because the consequences of mistake are more concentrated. This leads to increased conservatism as a company is growing if in fact the leader is not very ambitious and courageous. Team building around these traits therefore becomes imperative.

     
     
     
    • Eric D Zinyengere
    • Managing Consultant, TEAM Consulting

    Being a management consultant in Zimbabwe the country with the highest levels of inflation in the world, hype inflation to be precise, I can tell you now that stretch is a way of life,in fact in our environment if you are not stretching you are contracting. Remaining the same is not an option as the environment we have will cause you to contract, organisation are stretching just to balance out the environment and remain the same. What this environment has also taught us is that innovation and creativity gets better and better as organisations and people are stetched, new business ideas are germinating every day. The provisor though is that you can't stretch to much or the organisation will break,what we are wondering is what is enough, our inflation is over 2Million % and we are still going, business is still operating.

     
     
     
    • Ryan Jones
    • Principal, RSJ Consulting

    As with most Management concepts, the success of "Stretch" within an organisation is not in the structure of the concept itself, but in the method in which it is executed.

    The key challenge with stretch, is in achieving the delicate balance between the creation of goals that excite the energy of the organisation (encouraging out-of-the-box thinking, drive and passion to achieve a purpose); and creating or failing to add supporting enthusiasm around visibly unrealistic goals (resulting in lack of motivation and "flavour of the month" thinking).

    An organisation can easily set a stretch goal, but unless tangible effort and drive is demonstrated, no one within the organisation is likely to take the target seriously. These tangible actions must include, amongst other things; - the allocation of appropriate budgets and resources - the implementation of reward and recognition milestones and mechanisms - visible senior leadership involvement - a general alignment of the organisation's tactics towards the achievement of the longer term stretch objective.

    Many organisations that implement stretch, fail to achieve the actual target, but the effective application of the concept has in some cases led to the achievement of extraordinary results. One of the most common factors of organisations that have achieved positive results from stretch, is the presence of a strong and visionary leader, who actively drives the organisation towards the objective of clasping that puff of smoke in the wind. (This is of course also true for many other organisations that attempted different management concepts)

     
     
     
    • Peter Thuku
    • Accountant, BAT-Kenya

    If the organization sets stretchy goals in a time frame that can be conceptualized by majority of managers, it puts some urgency and drive to achieve them. This is different from annual (zero-based) which often tend to be political and argumentative.

     
     
     
    • Ganesh Ram

    I do not think the concept of stretch could have helped the Detroit auto giants in any way. Stretch is essentially about "how much" but the problem with the focus of automobile companies was "what". The qualitative aspect of what goals to set has nothing to do with stretch, it is guided more by vision, values and better understanding of trends.

    Successful implementation of stretch requires a somewhat "irrational" dreamer-type leadership that can inspire people to achieve more than what they think they are capable of. Therefore better information systems and faster access to more data will not necessarily help.

    Ganesh Ram http://itftd.blogspot.com

     
     
     
    • Louis Mathew
    • Senior Manager - Operations, Ernst & Young

    'Stretch' is a highly effective management tool/philosophy that can be used to inspire organizations to achieve seemingly unachievable goals over a longer period of time. It helps to bring about innovation and creativity by breaking the barriers of in-the-box thinking.

    The most important point to understand while implementing 'Stretch' within organizations is the fact that it is like any other management tools. While we can use a tool for various needs, it brings the best value when used for the right purpose in the right way. It is for the organizations to decide if they are using 'Stretch' for the right purpose and in the right way.

    For example, if 'Stretch' is integrated within a Balanced Scorecard approach without defining its applicability correctly from the Top to the Bottom, it could result in mismatch of employee expectations impacting the performance appraisal process which could lead to lower motivation levels.

    Overall, if implemented effectively, 'Stretch' can be considered to be the single most important philosophy that help organizations to succeed in the current global environment.

     
     
     
    • Beverley Hamilton
    • Group Business Development, Total Flow

    In the book the Three Tension the authors refer to 3 paradoxes that all businesses struggle with and those that master the balance between each side of each paradox have shown consistent positive results over time.

    Profitability or growth; Results today or results tomorrow (short term or long term planning and focus) Better synergy between organisational departments/groups or better standalone performance (whole v parts)

    The authors' research has determined that most businesses struggle to address both sides of the paradox at once and this leads to peaks and troughs of effort, focus and revenue and can lead to initiative overload and/or confusion.

    In this context stretch goals may be one side of the short v long term tensions. This relies on organisations having focus both near and far and making sure that measures reflect both side of the equation too.

    On the other hand there is a view that stretch goals are so internally focused that any value to the customer gets lost.

    Toyota was mentioned in an earlier post and like the fundamental principles of lean enterprise we hold the belief that the priority is Define value from the perspective of the customer Create organisational alignment to deliver that value Create waste free flow without defect, deviation or delay Work to demand based on pull from the customer Strive for continuous improvement

    Whether stretch goals fit anywhere in there is frankly neither here nor there because your customers don't care. All they care about is getting value when they want it, to the specification and bearable cost that they want. If the delivery of that is a stretch for an organisation so be it; if not get on with the consistent creation and supply of value. Or to quote Seth Godin - create something worth talking about.

     
     
     
    • Alastair Herbert
    • Director, Stretch Thinking

    When I started Stetch Thinking Ltd I had a very clear view of where the stretch was necessary. It lends itself most closely to Rakesh's response (posting 40). The key word is competitiveness.

    Most responses relating to a corporation are refering to company inputs, part of production and/or planning process. From the start of the industrial revolution to the point between the two world wars where supply first outstripped demand, the most efficient companies were the winners. Several refer to outputs, specifically focused on innovation. After that supply/demand tipping point marketing took over from production and customer-focused innovators were the winners. It didn't mean they weren't efficient producers, but this was no longer sufficient to outperform sustainably.

    Now with global capital flows and a digital distribution system in place it will be the most competitive companies who will win. Stretch Thinking is putting every part of the business on a competitive basis from finance, to sales to production. It means setting CPIs not KPIs, it means building brands holistic enough to deal consistently and coherently with all stakeholders. Most importantly it requires a full understanding of the threats and opportunities posed by the new business models. In our new competitive world barriers to entry can rapidly turn into impediments to change.

    Of course companies will continue to need to be efficient and innovative. But the companies that stretch themselves to build a culture focused on competitiveness will be the winners over the next few decades.

     
     
     
    • Sujeet Prabhu
    • Technologist, Larsen & Toubro

    In this age of hyper competition and continuous change, companies are finding it extremely difficult to sustain competitive advantage. This makes "Stretch" goals increasingly relevant in today's world.

    Stretch goals are goals, if achieved by your competitors, could drive you out of business. Stretch goals can shift an organisation's paradigm from simply managing in times of change to using change as a springboard to achieve competitive advantage.

    As Einstein said, "The significant problems we face cannot be solved by the same level of thinking that created them in the first place." I feel the concept of stretch is required to take us to this new level of thinking.

     
     
     
    • Richard J Albertini
    • Free Thinker

    Stretch does not need to be revisited as it has been (another GE word) "operationalized" and ingrained into today's management culture. I suggest, however, that as leaders, we don't forget that the spirit of "stretch" is to push and leverage individuals and organization to set and deliver beyond what seems plausible and beyond comfort. More importantly, that we reward and recognize (not chastise) those that embrace "stretch" goals. In the end, it is a stretch, isn't? Perhaps, we should revisit our short-term memory instead.

     
     
     
    • Santhanam Krishnan

    Innovation alone is obviously not stretching; at best it could be a prime mover of stretching. So long as there is a compulsion for survival in business, we have enough reasons to believe the survival of innovations.

    But to expect a flourish of innovations endlessly is again a factor that time will only decide. (Even, Bill Gates has quit!). Though "Innovations" theoretically do not have a plateau - the cycle of innovation- obsolescence-innovation depends upon the top management and the enabling environment (even forced ones!) that organizations are continuously able to provide. The very innovations that stretch a corporate can be a villain to corporate growth too - thanks to competitive innovations! Let's not forget that stretching itself a factor of - how early and quickly there is a realization within top management that wants to stretch itself and how far. Hard nosed investors would after all decide their choice of investments depending upon the options of innovations pursued by a business. Sensible and responsible corporates cannot afford to forget this ground rule.

    The global trade and the legal environments (WTO regime of patents and intellectual property rights) which in themselves are innovations to monopolize the competitive edge - is increasingly focused to make innovations a main battle weapon for survival. The future of market wars would be decided by this battle weapon.

    The pace of innovation itself is a price (or the cost) a business and its human resources have to pay to survive. Casualties are here to stay as a part of that. The heat is already being felt in many industries such as Software and BPOs. Stretching itself is an indication of willingness of a business to adopt a flexible attitude aimed at survival.

    The developments in the past three decades indicate that the global businesses who knew to organize themselves in technological/informational era can lead the race for survival. If the businesses themselves do not have a know-how to manage the flood of information and the knowledge workers as part of their innovative strategy - certainly some competitor will! In fact this it self can be an innovation that could give a competitive edge if handled properly! Business schools need to refocus on these needs to structure their curricula and demonstrate their innovative approach. Stretching has always been there as a part of human evolution and survival - the best part is - it is never known to have died.

     
     
     
    • Gopal Padinjaruveetil
    • Enterprise Architect, Capgemini

    Regarding the question: "Will Detroit adopt the stretch concept in the development of, say, 100-mile-per-gallon vehicles by 2012?"

    Nothing is impossible if you have the right leadership and motivation. Here is a great example.

    In 1960 the Soviet Union shocked the world by putting Yuri Gagarin into orbit around the earth. Then they did it again eight months later. The United States' anemic response was to put Alan Shepard into a sub-orbital flight in 1961 and to put John Glenn into orbit in 1962. The US was seriously behind in the space race. Then in 1962 President John Kennedy announced that the United States would "put a man on the moon by the end of this decade and return him safely to the earth."

    But, here's the most startling thing about that announcement--we had no idea how we were going to do it! We hadn't built a space capsule that would make the trip. We didn't have a rocket big enough to get the capsule into earth orbit, let alone send it to the moon. We had never docked two things together in space. No human being had ever walked in space. We had never orbited anything around the moon--we hadn't even crashed anything into it.

    All of these tasks had to be mastered before we could be successful and we hadn't done any of them. And yet here was the President of the United States proclaiming that we were going to get to the moon in less than eight years. Kennedy has been applauded by history for the vision and the strategic thinking he showed in setting this national objective. But it was also a "stretch" goal, if there ever was one.

    And the rest is history!!

     
     
     
    • Greg Della-Croce
    • Project Manager, Wycliffe Bible Translators

    I believe that the concept of Stretch is both good and bad. It is good in that it allows those with the biggest vision to express it in tangible way and to make it part of the corporate culture.

    However, in my experience, it is also used in the same way the rack was used, many years ago. Management puts people in "stretch" goal situations, and then treat them as if there were no stretch to it at all.

    I believe that if we are to truly "stretch" we need to remember that failing along the way is a major component of reaching the goal. Many companies, or at least some of the managers in those companies, fear the process of fail-learn-fail-learn until the goal is reached. There is little or no reward in those situations for learning why one failed. The focus is that resources where used and positive results (whatever those where) where not achieved.

    I believe that in my own field of Project Management, that is why the concept of incremental delivery and agile development of product is so popular. We are, for the most part, good at saying what the deliverables can be within the next 30-45 days. We can, and do, deliver on those steps toward a goal. We also reduce the resources risked by reducing the time scale to a predicable level. By rethinking our course on a short loop time scale we are better able to aim at the stretch goals, one step at a time.

    If I had time and space, I would love to talk about the case study of here at WBT USA. Our stretch goal of starting the last 4,000 language projects by 2025 is a stretch goal at a corporate level. The effect on the culture is a major study. And the major change to planning is great to watch for anyone that wants to understand how organizations handle change.

     
     
     
    • Malvin Bernal
    • Learning Leader, Consultancy Unlimited - Philippines

    The concept of having stretch goals emanated from the very simple notion of more from less. In the age of supra-productivity, increased output stems from the need to further enhance an organization's competitiveness as they chart their course now and in the future.

    It's not a question whether we are now ready for the so-called "stretch" model of management. We've been doing and practicing some stretch goals out of necessity and survival borne out by our previous experiences. Whether it would be taken as a science or an art is completely immaterial. It basically boils down to an organization's over-all, real and perceived capacity. Otherwise, such would just be taken as another academic exercise.

    To maintain an organization's edge, what is needed is not a stretch management, but a stretch in imagination, leading to innovation.

     
     
     
    • Carl Binder
    • Senior Partner, Binder Riha Associates

    In the absence of achievable short term milestones/commitments and continuous data-based feedback, goal-setting and the determination of whether they are being achieved tend to become political rather than being determined based on experience and data. Transparency suffers and the blame game sets in.

    I have seen time after time where so-called stretch goals have led mostly to intentional fuzziness and obfuscation as schedules slip and targets are missed, rather than solid achievement. Certainly the often-political activity involved in "negotiating" goals can be wasteful, and frankly, undermines the use of data to make decisions.

    I would suggest that if organizations and teams can learn to set aggressive but realistic goals based on data, and to frequently adjust both goals and means based on ongoing measurement feedback about whether or not commitments or milestones toward those goals are being achieved on a weekly basis, the result will be increased organizational confidence, transparency, and alignment. And the results will, over time, be more consistent and predictable than when unrealistic goals lead to cascading rounds of efforts to save face, etc.

     
     
     
    • Nick Bush
    • Director, Open Chord Ltd

    I think organisations need to be good at recognising where and when a stretch goal is needed. As other contributors have noted, the danger of stretch is when it creates unrealistic expectations and/or unsustainable stress. That said, a longer-term stretch goal can be a compelling vision for an organisation.

    I have recenly posted (www.openchord.co.uk/blog) on an approach I use that puts some stretch into SMART goals - by referring to the last three letters as Aggressive, Radical and Tight (timescale).

    I do this to get people to think more creatively about what's possible when some pressure is on. This kind of short-term stretch thinking is useful but also needs periods of non-stretch to allow the organisation to recuperate for the next set of challenges.

     
     
     
    • Edward Hare
    • Retired Director of Planning, Fortune 300 Manufacturer

    A bevy of wonderfully interesting observations on this subject. I think we shouldn't forget that the essence of great management, leadership even, is applying the right tool, at the right time, with the right emphasis, that "fits" the situation and the people involved.

    To me, "stretch" has become widely misused. Ambition and aspiration are hallmarks of great organizations to be sure but dictatorial targets that ignore the reality of "limits", recognized or not, do more harm than good.

    Let's face it, Jack Welch was an absolute genius as a managerial diagnostician. He could envision what GE needed at various points. That skill has to rank as one of his most important gifts. But too few have it. What the business world lacks most of all are those uncanny "leaders" who can diagnose a business, its issues, its people/culture, and serve up tools and approaches that help them do better than they may have ever thought possible.

    "Stretch" was one such example, consequently embraced by managerial lemmings everywhere, and too often applied inappropriately. So much so it's become a word with negative connotations in many organizations. The concept is fine, it fit GE to perfection at the time....and it's hardly dead. But use it when it makes real sense and can do some good, not because it "worked" for someone else, somewhere.

     
     
     
    • Joe Violette
    • Project Manager, Bechtel Corp..Retired

    I have successfully used stretch goals to improve performance. They have only succeeded with they are developed by the project team. The goals need "buy in" by the people that will implement them. Goals developed solely by management generally fail or fall short.

     
     
     
    • Mariana van der Walt
    • Owner, Van Thinking

    I believe it is the complexity and the simultaneous strain of limited resources that force us to a "stretch" culture of management in many cases. Allowing for an organizational culture where "stretch" can be pursued in a positive way demands very specific management approaches, some of which are already mentioned above in previous remarks, but the most important ones (in my mind) are

    1) having a culture of learning from mistakes rather than to penalize people for mistakes. 2) having a management style that is comfortable with less centralized control and more delegated responsibility 3) being comfortable with flexible objectives and sometimes less than optimal financial expenditure.

    Also, apart from management and organizational requirements, a "stretch" culture requires a specific kind of person (and a commitment to lifelong learning and development). This already starts at recruiting criteria.

    If your observation is correct, namely that "stretch" has emerged from the "garbage can" so to speak to present itself again as a viable option, then we need to develop and train our workforce appropriately, and also prepare both the organization and management for the phenomena. All of this takes time to develop.

    However, it is my view that it is unavoidable given the global conditions and challenges.

    A word of caution - "stretch" should be balanced by a focus on organizational resilience (which requires a certain amount of redundancy) for it not to have a high risk of destabilizing the organization if either too successful or too unsuccessful. Both of these extremes carry risks if resilience is neglected when "stretch" is pursued. Resilience then becomes an important strategic imperative for management.

    See more at http://main.vanthinking.com/index.php/The-aspects-of-Resilience-Management.html

     
     
     
    • Anonymous

    Just a couple comments:

    1) It is interesting to observe the number of responses from consultant types vs. those from big business. Hmmmm...

    2) Much information is out there about the generational mix in the workplace. What are you doing to prepare these and future generations to understand and deliver against stretch goals? How many of you teach your children about stretch goals, or even set goals with them? Or are you too busy working to think about what you're teaching them about the requirements of today's work environment? There's a stretch goal for you!

     
     
     
    • Anonymous

    I worked in an organization where "stretch" was used every year. This involved taking our achievable targets and multiplying the outputs by 1.04, while reducing the inputs and operating expenses by 7 % (or something like that). The stretch targets were usually tacked on by management without understanding how we were supposed to achieve them, so whether we got there or not was usually depended on luck and our ability to sandbag the figures before it got to management where the stretch was imposed.

    My analysis shows the only way to make the concept work is to really overhaul the way things are done, and this usually takes time and the ability to break the organization apart and rebuild it to work in a different way, and this requires managers who understand what the organization is doing. However, these conditions aren't usually present, unless the organization is small.

    Not being a management guru, all I can add is it seems to me this idea of stretch becomes quite redundant and irrelevant when everybody knows what they're supposed to be doing, the ability to deliver on plan is what counts, individuals are allowed to think and communicate with each other, and bred to challenge the status quo. And this is all I've got to say about that.

     
     
     
    • Ibrahim Arit
    • President, MindPark Consulting

    We are trying to understand what a "stretch company" would look like. Or how to become a stretch company. Many examples could be put together from the corporate world including but not limited to Virgin, Apple, Starbucks, Zara, H&M, Amazon.

    But forget the corporate world for now.

    Just remember the best recognized "stretch man" of our times to understand what it takes to be "stretch oriented": Michael Phelps, the golden boy of the Olympic Games.

    "Dream as big as you can dream and anything is possible," said Michael Phelps after the Games. He has become the most decorated gold medalist in history, winning eight gold medals in a single Games. He established a stretch goal for himself (though always shied away from talking about it), he firmly believed in his goal, he focused on it, worked hard toward it, he generated the internal energy himself he needed and he achieved his goal. Some say Phelps' goal is such a stretch goal that it will for a long time never to be matched.

    His coach call him a "motivation machine" adding that his best asset is his ability to take the negativity in his life and channel it into motivation to improve his game. "Bad moods, good moods, he channels everything for gain. He's motivated by success, he loves to swim fast and when he does that he goes back and trains better. He's motivated by failure, by money, by people saying things about him ... just anything that comes along he turns into a reason to train harder, swim better. Channelling his energy is one of his greatest attributes." This pretty much explains what makes Phelps a "stretch man".

     
     
     
    • Neville Suzman
    • Enable Value

    Given the choice of a team to work on, we would most definitely select the "stretch" team! It's all about how organizations can use this to create sustainable growth. In conclusion, it should become a management methodology that requires new competencies, key actions & behaviors aligned within a performance managed approach. The choice for us is clear!

     
     
     
    • Paul Hudnut
    • Colorado State Univ

    Enough about "stretch"- what about slack?

    Gifford Pinchot, who coined the phrase "intrapreneurship" once told me he had observed that many innovative large companies seemed to have some "slack" built into their systems (compared to start-ups). The larger resource base allows for some exploration on company time... from "skunk works" to Google's encouraging employees to work on "other" projects. And, such exploration has a better chance of becoming the company's own (if the experimentation happens in the employee's garage, you may get a competitor instead).

    While "slack" has a pejorative ring to it, Gifford's observation is an intriguing one. It probably won't fit very well in top down cultures driven by a hard charging CEO. But it likely increases chances for more serendipitous and "intersectional" work between departments, customers, etc.

    I can see where stretch could lead to sustaining innovations, but I doubt it is conducive to the disruptive ones. If you are looking for game changing innovation, perhaps it would be better to "slack" a company instead of "stretching" it.

     
     
     
    • John Kirwan
    • Partner, Strategic Planning Solutions - UK

    The value of 'stretch' in an organisation is culturally dependent. In a fear/blame culture, 'stretch' is a manoeuvre by the powerful to legitimise their bullying of the relatively powerless. The powerless are set up to fail and the powerful have the opportunity to re-assert their dominance as they administer the consequences of 'under-performance'.

    In a constructive, positive culture, 'stretch' is a wondrous source of energy and creativity that brings out the very best in human endeavour and accomplishment.

    The very best goals are those beyond our current resources (broadly understood to mean the quantity, quality and configuration of assets, structures, processes, systems, skills, thinking, competencies and capabilities) to achieve. These are "stretch-goals". Wondrously, stretch-goals stimulate the energy and creativity necessary to achieve them - or, at the very least, achieve more and further than goals too close to our noses.

    Of course the culture has to be right: a culture of confident people who can imagine the future as if it were already accomplished, who are prepared to experiment and learn from their findings (and mistakes!) , who are tenacious with an unswerving belief that the solutions will be found even if not yet apparent, and who, as stretch-goals are approached, set new stretch-goals.

    Stretch-goals are worked through, not to.

    So "what should be done to ensure that "stretch" is allowed to flourish?" It is for leaders first to create the right cultural conditions for their people to believe that their individual and collective potential is best realised through "stretch"; and, secondly, to equip them with the tools to proceed efficaciously.