How to create effective OKR stretch goals - top tips from experts
Those familiar with OKRs will have heard the term stretch goals on more than a one occasion. For those that haven't, a stretch goal in the OKR world is an aspirational objective, set to push the limits of our abilities. Whilst some are ok with stretch goals, others shudder at the thought, assuming that their OKRs will be stretched beyond the achievable.
Below we have a Tl;dr of some top tips, alongside the full-length answers from experts!
Top tips for OKR stretch goals - Tl;dr:
- Provide autonomy and empower employees to experiment
- Start small with 1 Key Result (out of 3-4) that is a clear moonshot
- Start by defining ambition and what your team deem stretch goals to be
- Facilitate a culture of trust and psychological safety
- Do not connect your OKR stretch goals to monetary reward
- OKRs need to be well communicated with a clear rationale on how they link to the organisation's strategy
- Make it explicit on each OKR whether this is a stretch goal or whether predictability is itself a goal
- Keep a check the confidence barometer of every OKR
- If you push people beyond the “learning” zone, they get into the “danger” zone. In the danger zone, people are getting stressed out, working over hours, and getting demotivated
- Provide what is necessary to become experts, encourage their autonomy, let them fail and learn from it, coach them, and teach them the why
- Recognise that stretch goals are a constant exercise in calibration
- Try to be clear about the roles associated with that stretch goal in order for people to feel empowered within their responsibilities
- See all of the expert tips below!
Nikhil Maini, Global OKR Coach, OKR International
- The starting point will always be linking OKRs to the organisation’s purpose. The why must be clear.
- Providing autonomy and empowerment to people in a trusting environment is another important, but a difficult factor to master.
- Creating psychological safety and a culture of learning
- Not connecting OKRs to monetary rewards. The carrot and stick approach is not meant for stretch goals.
Natalija Hellesoe, Organsational Dev Coach & OKR Expert
One way to balance inspiration, motivation, and realistic expectations can be to use one Objective (out of 2-3) or 1 Key Result (out of 3-4) that is a clear moonshot - and even mark it as such - whereas the others are more achievable.
Christina Lange, OKR Coach & Speaker
As a coach, I explore with the team what ambition means for them. “The team is the star” and I truly believe every team is willing to contribute to the bigger picture. If I sense resistance: I encourage them to listen to understand instead of listening to reply. Find out the root cause and make it transparent.
Mukom Tamon, Chief Excellence Officer, OKR & Lean Six Sigma Expert
- Set stretch targets for the Key Results metric (remember a KR = [metric] from [baseline] to [target]): my simple hack for stretching here is to take a target the team is comfortable with, then add a percentage to it. For example, let’s say we agree that we can attain a referral rate of 40%, so we have
KR: attain a referral rate of 40%
to stretch that, we make increase the target by 30%, resulting in
KR’: attain a referral rate of 52%
Of course, a critical element that makes this work is high levels of team trust. Also, the target needs to be bound by what’s feasible during a quarter.
- Have multiple Key Results, each representing a different dimension of success at the objective. These could be metrics that balance each other e.g. for a health objective, have Key Results not just for the weight (the usual single dimension, but for stress levels (as measured by cortisol levels) and blood sugar or ever cardiovascular fitness (as measured b VO2max)
Richard Russell, OKR & Leadership Coach
Make sure your OKRs have the right level of stretch by communicating with your team and considering their input.
OKRs are about communicating with real people, which means listening and understanding those people is a key part of it. Some teams are best motivated by wildly aggressive goals, and can create great results in the midst of ambiguity. Other teams need goals they are confident they can beat, otherwise they lose morale. Set the goals that work best for your team, don’t aim for a specific level of “stretch” regardless of the people involved.
Cansel Sörgens, OKR Coach & Trainer
OKR is to find out what works well and what not in short iterations to learn fast and adapt. So have a conversation about the learnings and validating hypotheses instead of reaching targets. On the other hand, if people feel psychologically safe and intrinsically motivated they’ll go beyond the expectations anyways. So, instead of negotiating targets, enable an environment where people feel safe to go beyond. By the way, if you link OKR-Scores with Performance Management forget about stretch goals at all. When people know they’ll be “judged” based on their (not) reached goals, they’ll choose the shortcut (sandbagging) to shine.
Kenneth Paul Lewis, Co-Founder, and Director at OKR International
- The Organisation's purpose, mission, vision, and strategy need to be well understood and inspiring
- The Organisational OKRs need to be well communicated with a clear rationale on how they link to the Organisation's Strategy
- De-Link it from Compensation. De-Link it from traditional post facto Performance Management
- Celebrate a 70% completion of a stretched OKR
- Give real-time feedback and check for obstacles for OKRs that are not being met. Challenge sandbagged goals
- Keep a check the confidence barometer of every OKR
- Don't make a stretch goal of a stretch goal
- Have a mix of roof shots and moon shots
- Don't make teams, victims of their own success….by stretching the same goal every time, without providing inputs, feedback, acknowledgment, and additional investment
- Create a culture of psychological safety, where it's ok to challenge OKRs and challenge the leaders. And it's ok to share bad news first
- Encourage a fail-fast culture and celebrate failures as learning opportunities
- Check if the teams have the capability and capacity to get close to the goals. Provide the teams with resources, when they need them to stretch
- Develop managers to be more coach-like, servant leaders, rather than authoritarian tyrants
Sandra Pretzer, OKR Trainer & Coach
One major aspect of working with OKRs is changing the business: Experimenting with things you’ve probably never done before. There’s a school of thought that suggests that defining stretch goals increases the chance of tapping into the creativity needed to reach these goals. Plus, stretch goals can increase the motivation of teams to actually work on them. IF there are structures in your organisation that 1) enable teams to set their goals autonomously and 2) allow for learning from failures. This is very important actually and often overlooked: In many organisations, goals have to be achieved by no less than 100% to count as “achieved”. In such an environment, risk aversion and fear of failure are inherent, which need to be addressed first. In order for stretch goals to be effective for you, your work environment needs to recognise failure as an opportunity to learn.
Oh, plus: Don’t tie bonuses to OKRs! People will make sure they’ll reach their 100% - often through sandbagging or cheating.
Elie Casamitjana, Founder & CEO, OKRmentors
Stretch goals have a core purpose to inspire and empower teams to think big and be more ambitious. If during the cycle, the team realises the actions implemented aren’t delivering enough results to achieve the stretch goal, it can be decided to evolve the actions to push towards the goal, find more resources, or when the deviation is too big, review the objective. Similar to a first-time marathon (or a high peak mountain), it shouldn’t be easy yet it should seem feasible with the right preparation (set of activities to achieve the goal). The focus will be put on delivering these activities and moving progressively towards the goal. In that example, if during the months of execution, there is a challenge (i.e. injury), a semi-marathon might be achieved instead of a full marathon. Still, it will be significant progress.
Allan Kelly, Agile OKR Coach & Author
I’m not sure you should always set stretch goals. I know there is a lot written about OKRs and ambition, and I agree with that, but I’ve also seen teams present their OKRs to stakeholders who then asked “How many of these will you meet?” When the team said 70% the stakeholders were in uproar! Think about your audience - your stakeholders. Sometimes they value predictability more than ambition. To complicate matters different stakeholders may put the emphasis in different places. Make it explicit on each OKR whether this is a stretch goal or whether predictability is itself a goal and therefore the ambition is moderated.
Daniel Montgomery, Strategic Agility & OKR Thought Leader
There’s a bit of an implication to this question that the OKR would be imposed on employees. That should never be done. Rather, OKRs are a commitment, not a command, so they must be negotiated within a team and then approved by management. One rule of thumb, as far as “stretchiness” is concerned, is that the team should feel there’s roughly a 50-70% chance of achieving the outcomes described by the Key Results. Recognising that it’s not likely that the complete outcome will be achieved, the team must make a commitment to regular check in conversations to mine learning and modify tasks as needed to maximise the likelihood of success. A key message is that failure to reach the stretch goal is not an offence as long as everyone can describe what they are learning from the process.
Madeleine Silva, OKR Coach & Trainer
First of all, we need to verify the maturity of the team. We need to do this because establishing OKR's can be complex and could affect the team's motivation. Remember, working with OKR demands an open mind, and you must be willing to change your mindset and your way of working. As a result, it could take some time for the team to adapt or establish a comfort zone (they may feel a bit pressured or too stretched in the beginning. On the other hand, if the team has been working many cycles with OKR and practicing a retrospective session. We can take advantage of it because this space might help to boost their reflection related to how de-motivating their objectives were. As you can see, asking good questions and promoting reflection is an art form, depending on the situation.
These questions might help:
- How was your OKR? Do you think they were stretched enough? Why?
- How do you think stretch goals might help the team? Why?
Remember, when deploying OKRs, it's not a mechanical system
Bart Den Haak, OKR Consultant & OKR Author
Stretch goals should get people out of their comfort zone. If you try to improve your metrics with 10%, you are basically doing the same thing, but just a little bit better. Achieving greatness means being bold. You want 100 more recurring customers next year, instead, why not set 1,000 more recurring customers as a target. This will get people into the “learning” zone. It is in this state of mind that people get new innovative ideas. But be careful. If you push people beyond the “learning” zone, they get into the “danger” zone. In the danger zone, people are getting stressed out, working over hours, and getting demotivated. In my book Moving the Needle with Lean OKRs I explain more about setting stretch goals and innovation with OKRs.
Omid Akhavan, OKR Coach at OKRs.com
- Stretch targets should always be potentially achievable even with a low probability i.e. never set a target that you are sure is impossible to achieve
- Make sure everyone understands that a stretch target is not supposed to be met every single time and also use a consistent method to set stretch targets based on the probability of achievement
- Analyse the historical data, baseline, previous achievement rates, team capacity/dependencies, required resources/initiatives, and lessons learned from previous cycles before setting targets
- Engage the executives to motivate the teams and help them understand why setting such stretch target is a strategic priority and how their contribution leads to the execution of company strategies
- Don’t link your OKRs with bonus/incentives and don’t use them to blame/penalizse the employees; instead, focus on intrinsic motivation and lessons learned
Andreea Havrișciuc, Head of Agile, METRO.digital
- Invest in people’s growth - provide what is necessary to become experts, encourage their autonomy, let them fail and learn from it, coach them, teach them the why, explore with them the what, let them choose the how
- Invest in the company sense of purpose - take time to define your vision, mission, and purpose. Work on your strategy. Explain the business. Have talks, debates, and sharing sessions in your company to make sure people understand why the company exists, what is the business and how they can contribute.
Invest in a healthy culture - adhere to a set of values, lead by example, empower people, experiment, take decisions based on data, make leadership accountable, encourage entrepreneurship at all levels, be transparent
Sienam Lulla, OKR Coach, OKR Edge
First recognise that stretch goals are a constant exercise in calibration. Sometimes your OKRs will end up being way too stretched. And sometimes your strategy will hugely pay off. What may have seemed like a stretch at the beginning of the quarter lands you at 130% progress in the end! OKRs are a continuous journey of “reflect and reset”. Also, this is what makes OKRs so exciting. What you need for OKRs to succeed is a culture that supports taking risks. Employees have psychological safety and trust that the leadership is failure tolerant. “If I take a risk and I fail there will be no punitive action.” One obvious need is that there isn't a tight linkage between OKRs and the individual compensation & rewards program. But beyond the obvious you need mature people managers that support fail fast, learn faster. This is harder said than done.
On the other end of the spectrum, it is also important to recognise that excessive stretch goals can create a high-pressure environment. Pressure leads to burnout and attrition. For instance, let's say Q1, a KR for Product & Customer Success is “NPS improves to 70”. They hit 60. Next quarter if you try to set the KR “Improve NPS from 60 to 100” your team is going to think that's ridiculous. In the remote first world, employees already have a higher risk of burnout due to factors such as loneliness and lack of community or mentorship. Unrealistic stretched goals could be the last straw on the camel's back. Openly discuss & debate “how much stretch makes it a good stretch”. A stretch OKR with full buy-in from those who contribute is the way to go.
Jean-Luc Koning, OKR & Systemic Coach
The way I help my clients define their OKRs as stretch goals consists in first starting by helping them clearly define reasonable targets for their OKRs. Something they are fairly confident they can reach. Something that is mostly within the reach of their team.
Once they have agreed on this, they can elaborate on an ideal (but still possible) result. For sure that would definitely be an amazing outcome yet the team should have at least a tiny confidence that this could be feasible even though that would not really be controllable by them. In other words, you can think of a stretch KR as an outcome that comes true in exceptional circumstances where all conditions (internal and external) are fully contributing to its achievement.
Thomaz Ribas, OKR Trainer
When we look at Google’s Project Aristotle, we see that amazing results happen when there are 2 fundamental characteristics: 1) an open voice environment where all team members have space to openly contribute; 2) psychological safety in the working environment - a sense of confidence that allows people speak up with ideas, questions or mistakes, while they know there will be no punishment, embarrassment, humiliation or rejection for not reaching stretch goals.
When psychological safety is present, people start taking moderate risks and speaking their minds, opening space for creativity and motivation to solve complex problems. However, it requires leadership! We need leaders who are curious and humble while welcoming questions, doubts, and bad news about the OKR’s while being able to balance between accommodative and assertive styles.
Kevin Baum, Global OKR Coach
The balance between stretch and sandbag is delicate, and it takes time, practice, and experience to find it. To assist in finding this balance, I tell my clients that a good OKR should make you nervous and a bit uncomfortable. Things will need to go your way, the wind will need to be at your back, teams will have to support you and you may even need a little luck, but you really do think you can achieve it. What we don’t want is for you to create an OKR that keeps you awake at night staring at the ceiling wondering ‘My Gosh, what have I gotten myself into?’ I tell my clients all the time that ‘freak out OKRs’ are only necessary when you are facing some existential threat and something must change dramatically in order for your business to survive.
The balance between ambition and attainability is, in my opinion and experience, one of the great misconceptions around OKRs today - i.e., that they have to be hair-on-fire moonshots in order to be technically sound. This just isn’t the case. Transformation can still be incremental if you are focusing on the right objectives. In other words - You don’t have to change the world in order to change the world, at least not in a single quarter.
On the other hand, I like to say that sandbagging is like beauty, it is very difficult to describe but we all know it when we see it. The best tool you have to prevent sandbagging is good governance disciplines. A good OKR should be arrived at collaboratively (engagement), and confirmed vertically between team leads and supervisors (governance). If you have good disciplines around this process you should end up with strong OKRs.
Felix Handler, OKR & Sustainability Coach
I do not believe in Moonshot-goals, at least not in the beginning. Start with what is possible in the beginning and connect to the motivation of the employee, why they do their job and how they see if they are successful. The idea is to build on that motivation. Then the stretching should come by itself once more trust between employee and leadership is there, but also by the employee in her/himself and the team. Once there is the mindset, teams need a bit of time to find the right structure to scale but it will come.
Nora Pfützenreuter, OKR & Agile Coach
I would observe the team's reactions to proposed goals and/or figures. If they go “sure, we can do that easily!”, suggest to set the bar a bit higher, if they block right away and say “we can never reach that” - and have good reasons why- lower the bar. I think you found the right spot when people say “It would be so, so great if we achieve this! Maybe we will not completely do it, but imagine how great it would be if we can make it!” Then you came up with motivating, jet stretched goals I think.
Ronaldo Menezes, OKR & Agile Coach
The first step is to analyse the context and culture of the company, making sure that it is prepared to act with elongated goals. Here we can start with OKRs that are less disruptive (roofshots) so that teams start to get used to using OKRs and their ceremonies. After a few cycles of successes, errors and learning using OKRs, we can start to ask ourselves how disruptive we can be with OKRs, and, from there, we start using stretch goals. This first step can already help a lot to not demotivate teams, as OKRs become something that they see that works because they started with roofshot goals and gradually evolved to stretch goals (moonshots).
To avoid the sandbag effect, a practice that can be adopted is to create teams responsible for a given OKR with representatives from different areas and each of them being responsible for a Key Result of that OKR.
Rida Qureshi, OKR Coach, OKR Institute, and OKR Management
OKR implementation is unique to each business guided by a set of principles. It is a process of continuous learning and evolving. Usually, while setting stretch OKR goals, you must feel uncomfortable and at the same time, the chances of achieving those goals should be 50-50. The goals must be viable within the OKR Cycle time frame with a clear action plan and owner. During check-ins, you must review the progress and discuss and change the action plan if needed. At the end of the cycle, if the actual is below or above 70% (sweet spot), you must discuss to seek an answer to the question why? This learning should be documented and considered for the next goal-setting OKR cycle that will help to avoid the pitfall of demotivation or sandbagging.
Brett Knowles, Global OKR Coach & Consultant
Where you do chose to use stretch goals, consider the following:
- Set the stretch goals at the highest level possible, preferably the corporate level, so that it is a “fair game” - every employee has the same amount of “stretch” In their goal (otherwise it can be demotivating as one manager sets a larger stretch goal than another manager)
- Make sure the stretch goal could be achieved if everything went perfect, within the of the possible. (John Doerr’s Example of JFK’s stretch goal of putting Man on the Moon was within the realm of the technologically possible at the time, the USA merely had to align, focus and resource to that stretch goal)
- Try to be clear about the roles associated with that stretch goal (RACI) in order for people to feel empowered within their responsibilities
- Walk-the-talk… Make sure that in all performance conversations, the stretch goal is held out as an incredible victory, but people are not penalised for not making as much progress as they might like. ( as soon as there are consequences to not achieving the goal, people we'll tend to sandbag their performance)
- Be very careful how you link recognition and rewards to the efforts associated with that stretch goal. For example oh, you might include conversations about the performance towards the stretch goals in your one-to-one meetings, but do not establish any hard formula. ( one common mistake is to communicate that achieving 70% all of that stretch goal is within the range of the expected; in so doing you have now changed that stretch goal into a committed goal with a target of 70% of the stretch goal’s KR)
Per Lundquist, Management & OKR Coach
Stretch goals could be about jumping higher, but in many situations, I would say it is about getting people to set and accept more uncertain OKRs when exploring new areas. My fav OKR coaching trick to get people to embrace a higher level of stretch or uncertainty is visualisation of success. This is the step that should happen before anyone starts writing OKRs. The feeling of uncertainty or that something is even impossible is reduced and instead, you level up the motivation to reach the end destination. Positive visualisation allows for a better platform to stretch, to be innovative, and to get people to take on challenges even if you are not sure to hit your targets. In addition, people that defined signs of success, shared a story and visualised detailed examples will find it a lot easier to write meaningful OKRs. So, before using some of the over 1000 templates on writing OKRs make sure you get people to visualise!
Walter G Ferrer, Transformation Expert
- Leverage individual development plans as information sources to help simplify the ‘so what’ and connect with the ‘passion and purpose’. In other words, use OKRs for talent development strategies, but not to deliver the accountability of a performance evaluation process. Focus on internal OKRs focused on culture, people risk reduction, engagement.
- Keep OKRs relevant and be flexible, supported by frequent check-ins. Less is more, start with 2 OKRs, it’s easy to add more… harder to remove them. Crawl-Walk-Run approach develops ambassadors and advocates whereas a big-bang approach leads to pushbacks.
- Consistently validate and challenge the assumptions to accelerate feedback and don’t be afraid to experiment, even if proving the negative.
- Apply OKR techniques during goal setting cycles – focus on Techniques, don’t get caught into “yet another framework”. Be specific, and spend as much time as needed. Gamify the employee experience where possible, lead with empathy, and make sure each employee why and how they contribute to the outcomes that are underpinning.
Ellen Duwe, OKR & Transformation Expert
The answer consists of three, consecutive steps:
- One: Focus on your problems
- Two: Get to the gist of the issue
- Three: Think out of the box
In following these three steps you ensure that 1) team members get to voice the issues they experience as demotivating when following their goals, 2) everyone on the team gains a common understanding on what to focus on in order to move the team forward and 3) the team follows a structure that allows for visionary and ambitious thinking within the realm of what’s realistic.
During OKR Planning Sessions, a lot of teams get mentally stuck in a problem-oriented mindset. “There’s nothing we can do” or “We don’t have any influence on the processes we work on” are among the most commonly voiced concerns during OKR Plannings. To define any kind of team goal, the first step OKR Masters or moderators leading through the Planning should focus on is to get team members to think outside the “problem box”. To do that, ask the team to write up all the problems and obstacles that are currently inhibiting their work. In a second step, ask the team to vote on the 3-5 most urgent obstacles.
Now it’s time to get to the gist of the matter!
The moderator now selects one of the ‘urgent problems’ and asks a number of questions that aim to unmask the core of the issue at stake. The “5 Why”-Method is a simple but effective tool that’s popular among OKR Masters. Simply keep asking for the reason why the issue constitutes a problem.
Here’s an example from a team in Customer Service:
Team: “We can't get much done because we’re highly dependent on IT, and they are very slow to work through our tickets”
OKR Masters asks Question 1: “Why are you highly dependent on IT?”
Team answers: “Well, because they implement our change requests in the software.”
Question 2: “Why do you have change requests?”
Answer: “Because our customers who use the software face various troubles that we want to solve.”
Question 3: “Why do your customers face troubles?”
Answer: “Because the software does not reflect their individual needs.”
Question 4: “Why does it not reflect their individual needs?”
Answer: “Because it wasn’t programmed to do so.”
Question 5: “Why wasn’t it programmed to do so?”
Answer: “Because, since the Software was initially programmed, market requirements have changed substantially, and our Software does not reflect Customers’ needs any more.”
This last answer is pretty close to the gist of the issue. And it is what the team should focus on when defining their Objectives and Key Results.
By now the team has had the opportunity to voice all their concerns about the problems and obstacles that inhibit the progress of their work. They’ve also reflected on the root cause of one or more of these problems. In other words: They’ve taken a good and realistic look at their work environment and cleared away all secondary problems that have been obscuring their visionary minds. Now it’s time to define motivating goals!
To Think Outside the Box, the OKR Master takes an issue the team has identified and gives it a working title for an Objective, such as “Our software reflects the market's needs”.
Now they ask the team to brainstorm their ideas on 1) what to eliminate, 2) what to reduce, 3) what to raise and 4) what to create in order to achieve this (preliminary!) Objective. The answers are potential Key Results that are likely to be ambitious as they tackle the core of the matter but that are also realistic.
Extra tip: To challenge the feasibility of a Key Results the OKR Master or moderator can ask the team to place the Key Results on a timeline that corresponds with the length of the team’s OKR Cycle (3 months, 4 months, ..whatever). The moderator challenges the team on the feasibility of the actions they’ve identified as well as on dependencies between actions.
Once the team has nailed down which actions (=Key Results) to focus on first, we get to the part of ensuring they are all measure the desired outcome. But this bit will be answered in one of the following questions :)
We hope that you enjoyed the first instalment of our second expert series! If this is the first time you've seen our OKR expert series, you're in for a treat! You can catch up on all of the topics covered in series one here.
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