5 Examples of Stretch Goals

John Spacey, October 06, 2019

A stretch goal is a target that is intentionally designed to be difficult to achieve. These are used to counter the common tendency for organizations, teams and individuals to set conservative goals that are easy to meet. Stretch goals are typically set alongside regular targets. Failure to meet a regular target is viewed as poor performance but failure to meet a stretch goal isn't viewed negatively. In other words, if you meet a stretch goal this is exceptional performance that goes well beyond expectations. The following are illustrative examples of a stretch goal.

Organizations

Organizations that communicate stretch goals to external stakeholders may be misleading them unless they clearly state the goal is unlikely to be achieved. In other words, stretch goals should not be used to achieve funding or raise a stock price. Stretch goals can be communicated as a vision statement with no target date. Stretch targets may also be shared internally as a goal to exceed your publicly communicated targets that are more realistic.

Goal
Increase top line revenue by 19%.

Stretch Goal
Increase top line revenue by 130% to become the number one real estate company in the Singapore market this year.

Executives

Part of the role of an executive team is to exemplify ambition, optimism and innovation. As such, stretch goals are commonly communicated but aren't necessarily documented as performance objectives. Generally speaking, an executive with a record of achieving stretch goals can only do so in a setting where the organization is also accustomed to exceeding expectations.

Goal
Develop 10+ product candidates and launch one to market by October. Generate sales of $3 million within 6 months of launch.

Stretch Goal
Launch a product in October that becomes our top selling product within 6 months of launch.

Management

As with executives, managers depend on their teams to achieve stretch goals. In some cases, high performing teams can achieve things in a few months that would take other teams many years. Such teams use regular goals to manage expectations but stretch goals are the real target.

Goal
Improve the order automation process to reduce order turnaround time by 14 minutes by addressing bottlenecks.

Stretch Goal
Completely automate the order automation process in a pilot that decreases average order turnaround time by 40 minutes at a single distribution center. Develop a business case to scale this to all distribution centers.

Sales

Sales stretch goals typically offer attractive additional compensation for salespeople or sales teams that reach a revenue level that is considered difficult. These can be used to encourage high ambition while setting sales quotas at an achievable level.

Goal
Close deals in the quarter of at least $40,000 in MRR to achieve a 10% commission of one year recurring revenue. Failure to achieve this quota will result in a 4% commission.

Stretch Goal
Salespeople achieving quarterly revenue of $100,000 in MRR or higher will receive a commission of 26% of one year recurring revenue for all sales.

Employees

Stretch targets are an opportunity for employees to request additional responsibilities or experiences that broaden their talents. For example, a software developer who has never managed a project before may be given a team lead role. In this context, the employee might be expected to make a reasonable number of mistakes that are viewed as a learning experience as opposed to a performance problem.

Goal
Deliver code to requirements for the sales reporting project. Measurement: stakeholder feedback, on-time code delivery

Stretch Goal
Act as team lead to represent the development team with the business, project management office and testing teams.
Measurement: stakeholder feedback, on-time project delivery