In most organisations it is assumed that if you want to build a high performing team you need to set stretch goals and objectives. Logically, it makes sense that setting challenging goals and objectives is the best way to inspire the most effort and the best performance. The only limitation that is commonly recognised is that when goals are set too high they cease to be motivating because people see no point in even trying to achieve them. But there are other problems with stretch goals.

One is that a heavy focus on stretch goals can promote cheating and unethical behaviour when people start to believe that the ends justify the means. There are examples of hours that are billed but never worked, repairs that are carried out unnecessarily, and sales reports and financial statements that have been falsified; all to give the impression that goals have been met.

Obsessive pursuit of challenging goals can blind people to the consequences of their actions. Leaders who conflate organisation goals with their personal ambitions, and are unwilling or unable to back down under the spotlight of public expectation and opinion, have been seen to lead their organisations into unethical behaviour and excessive risk taking. The financial melt- down of 2008 / 2009 is a prime example.

Organizations that rely heavily on goal setting may find that the cooperative behaviours that hold groups together are no longer valued and reinforced. When competition replaces cooperation, overall performance of an organisation may be reduced.

Organisations with strong values, and cultures in which ethical and co-operative behaviour is modelled by executives and given recognition by reward systems, can survive the effects of an aggressive management by objectives process. Others are likely to find that their stretch goals actually encourage unethical behaviour.

A different downside to stretch goals is that people stop experimenting and learning because of their focus only on obtaining results.  Goals inhibit learning when they provide no reward to people who might spend time looking for alternative routes to achieve those goals. This applies particularly to complex tasks in changing environments when ‘the way we’ve always done it’ may not be the best way this time around, but where there is no motivation for people to stand back and look for alternative strategies.

Some organisations try to use learning or personal development goals which focus on development of competencies, but in practice managers often have trouble determining what these goals should be or when they are appropriate.

Lastly, there is always the possibility that stretch goals will not be reached. People seldom handle failure well and are liable to become demotivated and to disengage from the process, questioning both their own abilities and those of the managers who have set the goals in the first place.

Given these considerations, we would be well advised to approach goal setting with rather more caution than is customarily thought necessary.

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