Stretch Goals


“Stretch goal” is a phrase popularized by Jack Welch, the highly-regarded former CEO of General Electric (GE). Jack Welch was CEO at GE for 20 years.

Jack pushed for uncomfortable stretch goals, not attainable goals. And in his 20 years as GE boss, he increased the company’s market value from $12 billion to $280 billion. That’s an average increase of $13 billion every year for 20 years!

GE explains stretch goals like so:

“…if the right environment was created for the group, setting stretch goals and working toward what might seem to be impossible results often became reality.”

Stretch goals build your self-confidence, allowing you to improve and take on even greater challenges over time. It’s a snowball effect; success helps you gain courage, which lets you become even more successful. When you make a habit of stretching your goals a little, you’ll continue to rise to the occasion, and your skills will improve.

Stretch goal setting mean using dreams and ambitions to set business targets. For this process to be productive, the goal has to be huge, with no clear idea of how to accomplish it. If you know how to get it done, then it’s not a stretch target.

The best way to understand the stretch goal is to see it in action. A prime example comes from Japan.

In post–World War II Japan, an interesting thing happened. Japan was completely devastated and trying to build up its economy. People traveled long distances for work, as far as 300 miles from Osaka to Tokyo. In 1955, this journey would take 20 hours, equating to a speed of 15 miles per hour. The head of the Japanese Railway System asked its engineers to develop a train that could cover the distance faster.

Six months later, engineers presented a train model that could travel 65 miles per hour. Not yet satisfied, management asked for a train that could run at 120 miles per hour. The engineers said, “Impossible.” Yet the railway management insisted.

The engineers went back to the drawing board and started thinking from every aspect. They worked on hundreds of innovations, covering everything from the weight of the coaches, to the track structure, to the engine design. Every tiny bit of innovation made the train run a little bit faster.

Finally, in 1964, they had a breakthrough. So emerged the bullet train, which could run at 120 miles per hour and cover the distance from Osaka to Tokyo in 4 hours rather than 20. The bullet train marked the beginning of Japan’s stratospheric rise to become an economic superpower. Stretch goals can galvanize people into revolution and innovation.

Stretch goals are intended to catalyze creative thinking and stimulate unconventional solutions. But it’s important to realize that they don’t come without risk.

The nature of stretch goals is that they increase the chances of failing. The risk factor rises, and the stress as well. Risk can, of course, have positive outcomes or negative outcomes – that’s what makes it a risk. But the chances of a negative outcome can be minimized by restricting unnecessary risk. Calculated risk is (relatively) safe risk. You are aware of what you stand to lose.

Steve Jobs took a risk when he designed the Apple I computer. It’s a gross understatement to say that it paid off. Safe goals, comfortable goals, have no power to stimulate development. Every business must take risks if it is to progress.

For innovation and breakthrough performance, set almost impossible stretch goals. Big and challenging goals excite us; they motivate us to perform efficiently. They provide the energy to move us. Little goals hold no excitement; they are easy to achieve and cultivate a casual mindset. “I will lose 5 pounds in the next year” is a small goal. “I will lose 50 pounds in the next year” is a high goal. It’s a challenging, exciting goal. It will prompt you to rise to the challenge, or at least strive towards it to the best of your ability.

High goals lead to high performance because:

• They increase your attention and effort towards goal-relevant activity.
• They activate the knowledge and skills required to attain the goal.
• They encourage persistence, leading you to work harder and longer.
• They empower and encourage you to think differently.
• They inspire you to go beyond your self-imposed limitations, farther than you thought possible.