Goal Setting

OKRs push us far beyond our comfort zones. They lead us to achievements on the border between abilities and dreams. They unearth fresh capacity, hatch more creative solutions, revolutionize business models. For companies seeking to live long and prosper, stretching to new heights is compulsory. As Bill Campbell liked to say: If companies “don’t continue to innovate, they’re going to die—and I didn’t say iterate, I said innovate.” Conservative goal setting stymies innovation. And innovation is like oxygen: You cannot win without it.

When stretch goals are chosen wisely, the payoff merits the risk and then some. “Big Hairy Audacious Goals”—Jim Collins’s memorable phrase in Good to Great—spark leaps to new levels:

A BHAG is a huge and daunting goal—like a big mountain to climb. It is clear, compelling, and people “get it” right away. A BHAG serves as a unifying focal point of effort, galvanizing people and creating team spirit as people strive toward a finish line. Like the 1960s NASA moon mission, a BHAG captures the imagination and grabs people in the gut.

Edwin Locke, the patriarch of structured goal setting, mined a dozen studies for a quantitative correlation between goal difficulty and achievement. The arenas ranged widely, but the results were “unequivocal,” Locke wrote. “[T]he harder the goal the higher the level of performance. . . . Although subjects with very hard goals reached their goals far less often than subjects with very easy goals, the former consistently performed at a higher level than the latter.” The studies found that “stretched” workers were not only more productive, but more motivated and engaged: “Setting specific challenging  goals is also a means of enhancing task interest and of helping people to discover the pleasurable aspects of an activity.”

In 2007, the National Academy of Engineering asked a panel of leading thinkers—including Larry Page, futurist Ray Kurzweil, and geneticist J. Craig Venter—to choose fourteen “Grand Engineering Challenges” for the twenty-first century. After a year of debate, the panel settled on an array of quintessential stretch goals: Generate energy from fusion. Reverse-engineer the brain. Prevent nuclear terror. Secure cyberspace. (You get the picture.)

Not all stretch goals are so rarefied. Sometimes they represent “ordinary” work at an extraordinary level. But regardless of scope or scale, they fit my favorite definition of entrepreneurs:

Those who do more than anyone thinks possible . . . with less than anyone thinks possible.*

At fledgling start-ups and market leaders alike, stretch goals can sharpen an entrepreneurial culture. By pushing people past old limits, they are forces for operating excellence. As Philip Potloff, chief digital officer at Edmunds.com, noted, “We’re trying to change the way automotive retailing is conducted, and that’s a massive challenge and a massive opportunity. The only way for us to boil down our crazy, big, ‘change-the-industry’ goals is through OKR. It’s why OKR continue to be at the center of what we do.”

Aspirational goals draw on every OKR superpower. Focus and commitment are a must for targeting goals that make a real difference. Only a transparent, collaborative, aligned, and connected organization can achieve so far beyond the norm. And without quantifiable tracking, how can you know when you’ve reached that amazing stretch objective?

This is an extract from John Doerr's Measure What Matters published by Portfolio