In today’s ever-changing business and economic climate, organizations may be increasingly likely to look toward unconventional methods of change to obtain results and achieve their goals. One way in which organizations can attempt to create major change is through the use of stretch goals. Stretch goals are goals that are essentially viewed as impossible, at least for a particular organization at the time that the goal is set. When used most effectively, a stretch goal forces an organization’s employees to be creative, question the status quo, and find new ways to address challenges.
While stretch goals are often thought to be effective in a variety of scenarios, a new paper by Sim Sitkin and colleagues questions this notion. Specifically, they propose a model that explains how both the likelihood of using stretch goals, and the potential for success in using such goals, might be linked to recent organizational performance and the presence (or absence) of slack (extra) resources in the organization.
THE RESEARCH STUDY
The researchers conclude that the organizations that are most likely to use stretch goals are also those that are least likely to reap the benefits of such goals. More specifically, organizations with poor recent performance and a lack of slack resources may be likely to attempt to use stretch goals in a dramatic attempt to turn things around; however, the researchers argue that the very conditions that cause such organizations to turn to stretch goals make it likely that negative outcomes will accompany the use of stretch goals (that is, there will be few to no improvements in organizational learning or performance).
Conversely, the researchers also posit that the organizations that are least likely to use stretch goals are often those that are in the best position to benefit from them. Organizations that have slack resources available and a recent history of good performance stand the best chance of benefiting from the use of stretch goals; however, the conditions that make these positive outcomes likely also minimize the chance that an organization will take the risks associated with using stretch goals. If an organization is experiencing success, high-risk attempts at change, like stretch goals, are unlikely.
THE BOTTOM LINE FOR ORGANIZATIONS
While more testing of this model is needed, it provides an initial caution to practitioners and managers that stretch goals may not always be an effective cure for organizational ills. In particular, the current pattern of stretch goal use may need to be reconsidered, with poorly-performing organizations utilizing methods of change other than stretch goals, and successful organizations being more willing to take the plunge and use stretch goals to make further advancements.
Sitkin, S. B., See, K. E., Miller, C. C., Lawless, M. W., & Carton, A. M. (2011). The paradox of stretch goals: Organizations in pursuit of the seemingly impossible. Academy of Management Review, 36, 544-566.
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