I recently had coffee with a fellow startup CEO. My young friend (I’ll refer to her here as Julie, even though that’s not her real name) seemed a bit stressed, which for someone leading a company through the fog that is a venture backed company in Silicon Valley struck me as pretty standard. But on this morning, Julie seemed more anxious than normal, so I asked her, “What’s up, what’s going on at work?”
“Oh geeze, we put together a plan for this year that we knew was pretty aggressive, probably too aggressive, and now it doesn’t feel like we’re gonna hit our goals,” Julie explained.
“So why’s that so stressful,” I asked her?
Julie replied, “Well, I’ve got a bunch of people at the office who think we’re screwed and that we’re going to be viewed as a failure. Plus, my board probably thinks I have no idea what I’m doing.”
All I could do was smile as I listened to Julie. I recalled how I’d been through this myself many times over my career. In fact, I shared with Julie that pretty much every quarter of every fiscal year my own teams had set “stretch” goals, and then I went on to explain to her that more often than not we never beat those stretch goals. I could tell Julie wasn’t exactly sold on why anyone would do that. So I figured it was a good time to help her think through why stretch goals matter — and why they don’t.
I started down a very intentional path with Julie. “So, what happens if you don’t reach your aggressive revenue targets this year?” And before she could reply, I launched into a series of follow up questions:
“Does it change the importance of your company’s vision and mission, and the ‘why’ you and your team show up every day to build what you’re building?” I asked. “No,” Julie replied.
“Does it change how you, your team, or your board views the massive opportunity in front of your company to change the lives of the millions of people who you’re trying to serve?” I asked. “No,” Julie replied again.
“Does it change anything substantial in terms of how you are prioritizing your product development plan or the initiatives you’re pursuing to optimize your go-to-market efforts?” I asked. “Well, maybe we need to shift some stuff around, or tweak a few things, but no, there’s nothing from a big picture strategy perspective that we feel we need to change,” Julie responded.
And finally I asked Julie, “Does it change the way you think about the capital you need to raise to keep scaling your business towards the vision you and your team see for your company 2, 5, or 10 years from now?” This time Julie’s facial expression relaxed and she managed a soft smile as she said one more time, “No.”
At this point I paused to let our interchange sink in a bit. I knew Julie got where I was going here. I told Julie that setting stretch goals is indeed scary AND that’s how startups excel. Startups don’t excel by setting easy to achieve goals. Those types of goals don’t challenge your team to suspend belief, get creative, live with some healthy stress, and then come together to “find a way”. Easy to beat goals don’t force your company to build scalable processes and develop amazing talent.
Then I picked back up with my mini lecture and coaching lesson.
“Your priorities for this quarter — and the rest of this year — need to stay focused on what you guys are building, not on any single metric,” I told Julie. “Keep the stretch goals in place, but use them to push your team forward faster than a bunch of wimpy, easy to beat goals ever could.”
Then I left her with a few thoughts that she could relay to her teammates (and board) so they too could keep the company’s stretch goals in the proper perspective:
“Don’t stress about your stretch goals — any of them,” I told her. “You aren’t a public company, you don’t have everything figured out, so setting audacious goals and missing them is the best way to build a path to a big business that you then understand well enough to predictably forecast.”
“Keep a growth mindset in terms of how you and the team build value every day, no matter where each of your employees sits in the company.” I then added, “Keep believing that the goals will be achieved. The moment you feel you can’t get there, you’ve gone into a fixed mindset mode and all hope is lost.”
“This feeds the next point, which is to keep learning from each other as teammates, from your customers, and from your partners. Use each gap between your actual performance and your stretch goals to inform how you can improve moving forward” I told Julie.
“And finally, keep working your ass off and stay committed to what you and your teammates are trying to do every day for your users and customers.” I implored Julie, “Most importantly, remind your team to work hard for themselves. None of you ever want to look back and wonder if you could have done more to make a difference. You don’t get that many shots in your career to do something that really matters.”
As Julie sipped the last few drops of her latte I sensed that she appreciated the perspective I shared, and that our conversation had helped her reframe how she might think about stretch goals. Indeed, I truly felt that she could use stretch goals to help her team and company scale to heights they may not otherwise aspire, as opposed to using goals to measure success or failure in a banal manner.
When we got up to leave Julie gave me a hug, and on our way out she said, “Thanks for the time. I get now more clearly how stretch goals matter for my company, and also, how they don’t really matter.” Julie’s comment made me smile knowing that she’d continue to carry the weight of those stretch goals on her shoulders for her startup, but that she’d do so without carrying the anxiety that need not be associated with shooting for aggressive targets.
Originally published on Medium on May 5, 2018. This Substack version is maintained as the canonical archive.