Don't Overstretch your Strategy

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Don't Overstretch your Strategy
Bernhard Keim, Premium Member
Often stretch goals are abused to push people for unrealistic goals. In that case employees see stretch goals as a threat, not a challenge they feel confident about.
Likewise, in strategy analysis, a good strategy is a strategy that not only fits a company's wishes, but its (cap-)abilities as well. If your strategy is too ambitious and is asking for the "big stretch" especially to make fast-turnaround happen, it may not work.

Sitkin e.a. dedicated an article in HBR (January 2017) to the problems stretch goals might cause in strategy. Companies that try - and fail - are usually in trouble already. Whereas the companies that could benefit from pushing themselves - those with strong recent performance records and resources to spare - start to be complacent and therefore avoid stretch goals. Success has made them risk-averse.
A stretch goal is very hard to reach for a company that is already in trouble, because it means not only working harder, but differently. And it needs resources for experimenting. Companies without slack resources or experiencing weak results, are not well positioned. Companies should take bold, risky actions when they are strong rather than weak.
Source: Sim B. Sitkin, C. Chet Miller, and Kelly E. See, "The Stretch Goal Paradox", HBR 2017 Jan/Feb



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