Don’t Stretch Credulity with BHAGS and Stretch Goals

The actual achievement of audacious goals is very uncommon.

 

by Dan Busby and John Pearson

 

Most chief executives are constitutionally optimistic,
and since by definition their role is to surmount challenges,
the tenor they bring into the boardroom
is likely to be relentlessly upbeat.[1]

Ram Charan, Dennis Carey, and Michael Useem

 

Remember Stretch Armstrong? “Stretch” was a favorite toy of one of Dan’s children. The well-muscled blonde man’s most notable feature: he could be stretched from his original size of about 15 inches to four or five feet!

Has Stretch Armstrong appeared in your boardroom? Maybe not, but you’ve likely discussed stretch goals and audacious targets. Perhaps stretch goals are already a proud feature of your current strategic plan.

Daring goals are often used to motivate staff. Google has long promoted the stretch goals philosophy, noting “More often than not, [daring] goals can tend to attract the best people and create the most exciting work environments.…stretch goals are the building blocks for remarkable achievements in the long term.”[2]

So it’s no wonder that some ministries employ stretch goals as a magical formula to “resuscitate or transform an ailing” strategy.[3]

Stretch goals are often misunderstood. Stretch goals are not merely challenging goals, which are sometimes referred to by ministries as Big Holy Audacious Goals (BHAGs).[4] Stretch goals are nearly impossible goals often proposed by the CEO—like a moon shot. But beware! Even with solid faith in God’s power, stretch goals fall into the miracle category.

For example, at your next board meeting, your CEO proposes a strategic plan that would increase the ministry’s annual revenue by 15 to 20 percent. That might qualify as a BHAG if God is in it.

But suppose the CEO proposes a strategic plan to increase the ministry’s annual revenue by 40 percent or more. That is a stretch goal, and the board and CEO should admit it is a radical expectation!

As we’ve observed in hundreds and hundreds of ministries over the years, the numbers reveal the reality. Successfully achieving stretch goals is very uncommon, and thus reaching for the moon (and beyond!) should generally be avoided.

When should boards veto stretch goals? Here are three cautionary situations:

  1. The new CEO. When a new CEO accepts the leadership baton of a ministry, there is often a desire to quickly make a strong impression. Therefore, it is not unusual for the CEO to recommend a stretch goal that verges on the unreasonable. And since the new leader is usually in a honeymoon period, the board may be prone to approve an unrealistic stretch goal. Danger ahead!
  2. The failing ministry. When a ministry has experienced a negative multiyear track record with severe resource constraints and a loss of momentum, a stretch goal should rarely be used. Stabilization should generally be the goal for a ministry on a downward slide. A ministry that goes for broke with no capacity to actually execute a plan might get what they wish for—broke!
  3. The legacy-prone CEO. When a CEO is in the last few years before retirement, there can be a temptation to adopt a fly-to-the-sun approach in an effort to cement the CEO’s legacy. (Yes, even ministry leaders have egos.) Instead, the board should focus on a smooth transition between leaders as the primary goal. Stretch goals are rarely appropriate in the last few years of a CEO’s tenure. Legacy endangered!

Stretch goals may be the ticket in somewhat rare situations. But before your board approves a fly-to-the-moon strategic plan, be sure your ministry is in step with God’s leading.

As Ruth Haley Barton notes, “Just because something is strategic does not necessarily mean it is God’s will for us right now.”[5]

 

BOARDROOM LESSON
_______________________________

If your CEO is tempted to shoot for the moon, beware!
This may not be the right time to attempt
a Big Holy Audacious Goal or an unrealistic stretch.

  Board Action Steps:

  1. Reflect: Encourage your board to read “The Stretch Goal Paradox” (Harvard Business Review, January-February, 2017).
  2. Review: Assess the goal-setting process in place for your ministry. Were last year’s goals achieved? Are your proposed goals too audacious or too timid? Are they holy?
  3. Discern: Pray and discern how goals should be set, especially in three situations: a new CEO, a declining ministry track record, or a CEO near retirement.

 

Prayer

Lord, help us to understand the difference
between setting challenging goals versus
setting nearly impossible goals. Amen.

 

 


[1] Ram Charan, Dennis Carey, and Michael Useem, Boards That Lead: When to Take Charge, When to Partner, and When to Stay Out of the Way (Boston: Harvard Business Review Press, 2014), 139.

[2] Sim B. Sitkin, C. Chet Miller, and Kelly E. See, “The Stretch Goal Paradox.” Posted January 2017. Harvard Business Review: https://hbr.org/2017/01/the-stretch-goal-paradox.

[3] Holly Duncan, “Do Not Interrupt,” Lessons From the Nonprofit Boardroom (blog), March 21, 2018, http://nonprofitboardroom.blogspot.com/2018/03/ lesson-18-do-not-interrupt.html.

[4] Ruth Haley Barton, Pursuing God’s Will Together: A Discernment Practice for Leadership Groups (Downers Grove, IL: InterVarsity Press, 2012), 206–207. Barton adapted these 10 listening guidelines from the book, Grounded in God, by Suzanne G. Farnham, Stephanie A. Hull, and R. Taylor McLean.

[5] Ibid., 201.
 

From Lessons From the Nonprfit Boardroom: 40 Insights for Better Board Meetings, 2018, www.ECFA.org/KnowledgeCenter.


This text is provided with the understanding that ECFA is not rendering legal, accounting, or other professional advice or service. Professional advice on specific issues should be sought from an accountant, lawyer, or other professional.

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