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Archive for the “Stretch Goals” Category

As many of us do, I keep a laundry list every day of things I need to do.  These are not big goals.  They are mostly small matters of the quotidian and prosaic.  Nevertheless, I take great satisfaction in checking them off as each day progresses.

I believe in the satisfactions and efficacy offered by the little joys of my entrepreneurial day.  Of course, I have my five and ten year hopes and ambitions, but I live one moment at a time in my company.

I am personally untrained in traditional techniques of command-and-control management.  But from what I glean of it, I find it old-fashioned.  It’s certainly not for me.  My instinct is for maximum creativity and freedom in accomplishment of corporate goals.  (My firm, Corporate Rain International, is designed as horizontally possible for this reason.)

In an interesting blog titled “The Folly of Stretch Goals” in the Harvard Business Review (4/20/12), Daniel Markovitz, author of Factory of One (CRC Press), quotes famed psychologists Edwin Locke and Gary Latham describing large (stretch) goal setting as “the most effective managerial tool available.”  Stretch goals are the tactic of giving yourself and your employees an end that is just beyond reach, pushing them to greater and greater achievement.   Markovitz does not agree with that approach and neither do I.  For Markovitz stretch goals are not useful and even dangerous for three reasons.

  1. Stretch goals can be terribly demotivating.  To the extent stretch goals seem overwhelming and unattainable they suck dry intrinsic motivation.  They are innately  manipulative, cynical, and condescending to the employee/colleague.  Money motivators crowd out intrinsic motivators like learning, growth, and service.  He cites  psychologist Karl Weick, who argues, in an article titled “Small Wins,” that steady, slow, organic progress creates more complete solutions, conditions, and accomplishment.
  2. Stretch goals have a dangerous tendency to foster unethical behavior.  For example, Markowitz offers the illustration of Sears in the early 1990’s.  “Sears gave a sales  quota of $147/hour to its auto repair staff.  Faced with this target, the staff overcharged for work and performed unnecessary repairs.  Sears Chairman at the time, Ed  Brennan, acknowledged that the stretch goal gave employees a powerful incentive to deceive customers.”
  3. Stretch goals can lead to excessive risk-taking.  Just over a month ago, J. P. Morgan took an eight billion dollar loss (and counting) inspired by the stretch profitability  goals of their London subsidiary and its leader, “The London Whale.”  This echos Enron’s incentivization of its executives to meet specific revenue goals, irrespective of the  profitability or the riskiness of the moves.  Enron was ultimately and totally destroyed in 2001 by this strategy.

So let me get back to my musing on my personal entrepreneur’s list of small steps and accomplishable goals.  For me, these little things create a target condition of steady growth and dependable value creation for my company.  If my employees and associates can do that too, why, I’m a happy business owner.  As Alchoholics Anonymous says, “One Day At A Time.”

Speaking of which, I just finished this week’s blog.  I’ll scratch that one off today’s list right now.

Sales writer Og Mandino once said, “It is those who concentrate on but one small thing at a time who advance in this world.”  Thank you, Og.

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