Setting ambitious organisational goals has become a recognised part of the modern leader’s role. As a result, “BHAGs” (Big, Hairy, Audacious Goals), “WIGs” (Wildly Important Goals) and “Moonshots” have all become part of the management-speak lexicon.

And yet, whenever I see or discuss goal-setting I’m reminded of the character in the Dilbert cartoon who says, “Stretch goals are like stretch pants – they are a sign that you have given up!”

So, do highly ambitious and stretching goals that significantly raise the bar help or hinder organisational performance? First, let’s look at the case for and against ambitious goals:

The case for ambitious goals

  • They encourage innovation and the development of new solutions and sources of value. Instead of trying to incrementally beat competitors, big goals encourage organisations to create new businesses that make their competitors irrelevant.
  • They help build focus across an organisation, a sense of mission and a desire to ‘go for it’. JFK didn’t say to the American nation that it should improve its space programme; he said that the US should put a man on the moon by the end of the decade! The difference in resources, commitment and results was massive.
  • They create the impetus for movement and progress, even if the ultimate goal is not realised. As Michelangelo once wrote, “The greatest danger for most of us is not that our aim is too high and we miss it, but that it is too low and we reach it.”

The case against ambitious goals

  • They lead to manipulation of results and the creation of questionable products and services. Enron, once the doyen of business writers, is the avatar of this approach, but blue-chip giants Volkswagen and Wells Fargo have both suffered from high-level fraud and duplicity in recent years as a result of setting big, ambitious goals.
  • Unless there is a history of success they can foster a feeling of cynicism across the organisation and a lack of belief in the management. This is the Dilbert cartoon response and is something that I’ve come across in several businesses I’ve worked with.
  • They can inhibit organisations from delivering smaller, yet important improvements to customers and organisational performance. 3M, the creator of post-it notes, is highly innovative and successful, but eschews big goals. Jim Collins in his book Built to Last commented that it operates using apothegms such as “make a little, sell a little”, “take small steps” and “no end product is so small as to be scorned”.

How to set ambitious goals that work

Overall, I still believe that big, ambitious goals are a force for good in organisations, but only if implemented in the right way. Here are 7 steps that I use with my clients:

  1. Use as a carrot, not a stick. Your goal should inspire, rather than daunt or dispirit your teams. The best leaders use big, ambitious goals to excite and encourage people, motivating them to try new things.
  2. Integrate with a clear growth strategy. A goal on its own will not generate sustainable success. It must be part of an integrated and coherent strategy. In 1990 Sam Walton set a goal for WalMart to grow from $30 billion revenues to $125 billion. But Walton’s hugely ambitious goal was part of a wider strategy of category development, store expansion and supply chain improvement.
  3. Ensure that the goal is achievable. Even though you can’t be sure you’ll reach it, any goal must be achievable. Even JFK’s ‘man-on-the-moon’ goal was built on an understanding that the technology was likely to be possible if given sufficient resources and attention.
  4. Celebrate successes – even small ones – to build evidence and belief. Even very small actions can add to the delivery of a big goal. Celebrating these successes is vital to creating organisational momentum. You can celebrate these victories at awards ceremonies, but also through the stories you tell the organisation.
  5. Cascade into everyone’s job. Your goal must live and breathe outside the C-suite. Big, challenging goals can be a great way to engage and align an organisation, and bring meaning to colleagues’ roles. UK furniture retailer, DFS, for example, delivered its transformative customer satisfaction goal by including it in every single colleague’s performance objectives.
  6. Ensure consistent follow-through – at all levels. While the goal must be a carrot, and inspire the organisation, there must also be accountability. That means following-through on performance, identifying successes, failures and opportunities and acting on that learning. This will involve a mix of weekly, monthly, quarterly, annual and ad hoc reviews that keeps the goal front and centre in people’s minds and actions.
  7. Focus on behaviours as well as results. It’s critical to measure and manage results – the outputs and outcomes that contribute most to your goal – but you should also be aware of behaviours. The Enron and Volkswagen examples show that a one-eyed focus on results can lead to mismanagement, performance and accounting manipulation and fraud. That’s why a focus on behaviours – starting with your own – is equally important to delivering against your ambitions.

These 7 steps can help you transform your chances of success in delivering against your biggest goals. Which of the steps do you need to take to turn your biggest, most ambitious strategic goals into serious results?