Are you feeling stuck with your OKR stretch goals? Frustrated by the challenge of training your team to set ambitious objectives?
Many organizations struggle to understand and utilize the full potential of OKR stretch goals. You may be unsure how to push the boundaries and inspire your teams to aim higher.
Many different companies have used stretch goals combined with a solid framework to set and achieve aspirational goals.
In this blog, you will learn different aspects and the process of setting and achieving OKR stretch goals effectively.
What are OKR stretch goals?
OKR stretch goals are ambitious targets you set within the framework of OKRs that go beyond your current capabilities to execute them. Many companies consider completing 70% of the OKR stretch goals an achievement.
These stretch goals challenge you to push your limits, innovate, and take risks to achieve them. Companies like Intel are the pioneers in setting ambitious OKRs to achieve major business success.
Why even create stretch goals?
Your current goal-setting and KPIs might be holding back your growth because they’re likely based on what you’ve achieved in the past.
While this approach helps maintain stability, it prevents you from reaching new levels. If you keep aiming for what you already know you can achieve, you might miss out on innovative opportunities and undiscovered potentials.
Sticking to the same goals can keep you in a cycle of usual business, limiting your ability to adapt to changing markets and outpace competitors.
Stretch goals, on the other hand, push you beyond your comfort zone. They encourage employees to explore new strategies and solutions, leading to breakthroughs that wouldn’t have been possible with conservative goal-setting.
A Gartner Research revealed that ambitious goals yield better results than easily attainable goals.
Plus, achieving stretch goals boosts your team’s morale and confidence, empowering them to tackle even greater challenges in the future.
Types of OKR stretch goals you should know
Usually, you can leverage two types of teams aligning OKR (or even KPIs) with stretch goals. Also, read the case of the company “Allbirds” that utilized OKR stretch goals below.
1. OKR Stretch Goals
They’re objectives with small stretch, pushing you to achieve more than your usual targets. It’s ambitious but still within the realm of possibility, encouraging your team to push their limits and strive for greater results.
For instance, your sales team typically aims to increase revenue by 10% each quarter. A stretch goal might be to aim for a 15% increase instead. It depends on your current work performance. You should sit with your manager to discuss and conclude on stretched OKRs.
2. Moonshots or BHAGs (Big, Hairy, Audacious Goals)
“Moonshot thinking starts with picking a big problem: something huge, long-existing, or on a global scale.” – Astro Teller
They are the kind of goals that can potentially transform your entire organization. With these goals, you aim for exponential outcomes rather than incremental ones.
For example, imagine a tech company setting a moonshot goal to develop a revolutionary new product that will disrupt the industry. It’s a bold and audacious goal that may seem out of reach at first glance, but it inspires innovation and drives the team members to think outside the box to achieve something truly remarkable.
How do you write OKR stretch goals?
Committing to stretch OKRs as a strategic tool for goal-setting and execution can lead to tangible improvements in productivity, alignment, and overall business success.
These steps will inspire your team and help them create meaningful OKR stretch goals.
1. Define the stretch for your business and teams
By answering these questions, the team can identify stretch goals that challenge them to achieve ambitious outcomes while remaining realistic and aligned with the company’s vision and objectives.
We have considered a B2B SaaS company for the examples in these answers.
a) What is the most ambitious outcome you can envision?
Example: Increasing annual recurring revenue (ARR) by 50%.
b) How can you speed up the progress to attain this outcome?
Example: Introducing a new feature that significantly enhances user engagement and retention, leading to faster revenue growth.
c) How can the company make improvements?
Example: Expanding into new markets or verticals to diversify revenue streams and increase market share.
d) How can employees contribute and excel?
Example: Providing ongoing training and professional development opportunities to empower employees to take on leadership roles and drive innovation.
e) How can your company have a positive impact on your industry and make a significant difference?
Example: Enhancing user experience through intuitive UI/UX design and personalized features that delight customers.
f) How can your company positively affect your industry and move the needle?
Example: Partnering with industry leaders to pioneer new standards and practices, setting the benchmark for excellence in the B2B SaaS industry.
2. Train individuals to create business-aligned OKRs
Communicate and help team members understand how achieving stretch OKRs contributes to their professional development and the overall success of the business.
Provide training sessions and resources to educate team members on the principles of creating effective OKRs. Emphasize the importance of specificity, measurability, and alignment with business priorities.
For example, offer workshops or online courses covering OKR best practices, case studies, and practical exercises to help team members develop the skills to formulate meaningful stretch OKRs.
Encourage autonomy and creativity in setting stretch OKRs. Enable team members to brainstorm and propose their own strategies for reaching stretch goals. This drives a sense of ownership and accountability.
Improve collaboration and engagement by involving team members in the process of defining team and business-aligned OKRs.
Organize collaborative OKR-setting sessions where team members can brainstorm ideas, provide feedback, and collectively establish stretch goals that contribute to the achievement of top-level business OKRs.
Encourage open communication and collective decision-making to ensure alignment with broader organizational objectives.
3. Create business-aligned team stretch OKRs
Ensure that stretch OKRs are clearly defined and articulated to avoid confusion and ensure alignment with business objectives.
Ambiguity in stretch goals can result in teams feeling lost or unsure of what is expected of them, leading to decreased motivation and productivity.
For instance, instead of setting a vague key result like “improve customer satisfaction,” specify the desired outcome, such as “increase Net Promoter Score (NPS) by 10 points by the end of the quarter.”
Below is an OKR stretch goal example of a customer success team.
Objective: Improve customer onboarding experience
- KR1: Increase customer satisfaction score (CSAT) for onboarding process from 80% to 90% by implementing personalized onboarding workflows and tutorials
- KR2: Decrease time to onboard new customers from 7 days to 3 days by automating manual onboarding tasks and streamlining processes
- KR3: Increase product adoption rate among new customers by 20% through targeted outreach and educational resources
Moreover, encourage teams to take ownership of their stretch OKRs and empower them to determine the most effective strategies and approaches to accomplish them.
For example, instead of dictating specific tasks or methods, allow the engineering team to decide how they will improve product performance to achieve the stretch goal of reducing load times by 30%.
4. Stay flexible, review, and improve your stretch goals
Acknowledge that setting and achieving OKR stretch goals is a learning process. It may take time for teams to adjust to the OKR framework and find the right balance between ambitious targets and achievable outcomes.
Encourage a culture of experimentation and continuous improvement by framing setbacks as learning opportunities. Celebrate progress and learn from failures to refine and strengthen future stretch goals.
Emphasize the proven effectiveness of OKRs in driving business growth. Highlight success stories of companies that have implemented OKRs to achieve significant improvements in performance and results.
By the way, many OKR software today allows you to create meaningful OKRs with the help of generative AI.
How ambitious should you make your OKRs?
Look, the amount of stretch you put into your goals entirely depends on your current performance. The OKR framework can provide you with a system to put these goals into execution and align the team with the top-level business goals.
The level of ambition in setting OKRs should strike a delicate balance between challenging and achievable. While it’s essential for OKRs to stretch individuals and teams beyond their comfort zones, they should also remain within the realm of possibility with concerted effort and commitment.
Overly ambitious OKRs that are unrealistic and unattainable can lead to demotivation, frustration, and a sense of failure if not achieved.
On the other hand, setting OKRs that are too easily achievable may not inspire the level of effort and innovation necessary to drive meaningful progress and growth.
A checklist to see whether your OKRs are stretched
You should follow some rules to create meaningful stretch goals. Otherwise, your teams would make easier goals for themselves, for example, setting the bar too high, making them realistically unachievable.
Here are some questions you can ask yourself after setting your OKR stretch goals and align those goals with these aspects.
- Ambitious targets: Are your Key Results challenging enough to push your team beyond their usual performance metrics?
- Focus on less: Are you focusing on 3 or less ambitious OKRs to avoid diluting the team’s efforts?
- Achievability: Are your Key Results realistic but require considerable effort and innovation to accomplish?
- Time-bound: Are your Key Results set within a reasonable and specific timeframe, typically aligned with quarterly OKR cycles?
- Alignment with Objectives: Do your Key Results directly contribute to achieving the overarching Objectives of your organization or team?
- Risk consideration: Have you assessed the risks of pursuing these ambitious OKRs, balancing the potential rewards with potential challenges?
- Feedback loop: Are you regularly reviewing and adjusting your OKRs based on feedback and changing circumstances to ensure they remain appropriately stretched?
- Organizational support: Does your organization provide the necessary resources, support, and encouragement to pursue these stretched OKRs effectively?
Committed and stretch OKRs and their differences
Committed OKRs represent the goals that an individual or team is confident they can achieve with reasonable effort and resources. These goals are typically aligned with the organization’s overall strategy and are considered achievable within the given time frame.
In contrast, stretch OKRs are more ambitious targets that go beyond what is easily achievable and require significant effort and innovation to accomplish.
Grading committed and stretch OKRs
Ideally, you are expected to achieve your committed OKRs (100%). For aspirational or stretch OKRs, nearly 70% of completion is considered an achievement.
Why grade your OKRs?
Scoring OKRs allows for self-reflection on achievements and potential improvements for the future. Lower scores mean you need to reevaluate your performance and OKRs, while higher scores offer concrete evidence of success and motivation.
Methods to grade your OKRs
You can use two commonly used methods called the Decimal and Binary methods.
Consider a team-level OKR to understand these methods effectively.
Objective: Increase customer satisfaction
Key Result 1: Achieve a Net Promoter Score (NPS) of 9 or higher
Key Result 2: Resolve customer inquiries within 24 hours on average
|The scores in this method include grades from 0.0 to 0.1.
Score of 0.7 to 1.0: Indicates that you achieved your OKRs, meaning you achieved the NPS target of 9 or higher in KR1 and resolved customer inquiries within 24 hours.
Score of 0.4 to 0.6: Shows significant progress but fell short of completion. This might mean that you improved the NPS but didn’t quite reach 9 or reduced the average resolution time but didn’t meet the 24-hour target consistently.
Score of 0.0 to 0.3: Indicates failure to make real progress. This could mean that you didn’t see any improvement in the NPS or that the average resolution time increased instead of decreasing.
These scores provide more understanding of your performance, indicating where you succeeded, where you made progress, and where improvement is needed.
|With the binary method, we simplify the grading to either 0 or 1.
Score of 1: Indicates full achievement of the objective or key result. For our example, this would mean achieving an NPS of 9 or higher and consistently resolving customer inquiries within 24 hours.
Score of 0: Indicates failure to achieve the objective or key result. This could mean not reaching the NPS target or failing to resolve inquiries within the specified time frame.
Using binary scores makes it easy to determine whether we met our objectives. A score of 1 means success, while 0 signals areas where improvement is needed.
Don’t forget to add qualitative evaluation to your OKR scoring. For example, you may not achieve the KR1 of NPS 9 or above.
Still, you get some beneficial user feedback that the product team implemented, which consequently increases product adoption among your current B2B clients.
So, you may give yourself a 0.7 instead of the 0.5 that you quantitatively achieved.
What are stretch goals in scrum?
By setting stretch goals, the software development team is encouraged to go beyond their comfort zone and strive for higher levels of productivity and innovation.
Stretch goals aim to deliver more value in a particular sprint. By challenging the team to reach further, stretch goals help enhance the product significantly within a shorter time frame, leading to increased user satisfaction and broader positive feedback from users.
Ordinary OKRs for a 4-week sprint
Objective: Improve product features and functionality
- KR1: Implement 2 new features based on user requests
- KR2: Reduce the average response time for user inquiries by 20%
- KR3: Conduct usability testing with at least 5 users
While they aim to improve the product, they may not necessarily push the team beyond their current capabilities.
Stretched or Aspirational OKRs for the same team in a 4-week sprint
Objective: Elevate user satisfaction and value
- KR1: Implement 4 new features based on user feedback with one innovative feature addressing a longstanding user pain point
- KR2: Decrease the average response time for user inquiries by 30%, achieving industry-leading customer support standards
- KR3: Conduct usability testing with at least 10 users with a comprehensive understanding of user needs and preferences
In this stretched OKR, the objective still focuses on the value for the users. However, the KRs are more ambitious, challenging the team to deliver more value to users within the sprint timeline.
The team is pushed to achieve greater levels of performance and innovation, ultimately leading to enhanced user satisfaction and product success.
A case study of a company succeeding with OKR stretch goals
This success story about a company using OKR stretch goals will give you confidence in the OKR framework and tell you how stretch goals can motivate a team to perform better than usual. We picked this story from whatmatters.com
Background of Allbirds
Allbirds, a sustainable footwear company founded in 2016, set out with a mission to create comfortable and eco-friendly shoes. Known for their innovative use of materials, especially merino wool, the company quickly gained popularity for its commitment to sustainability and comfort.
Goals and challenges
As Allbirds grew, they faced the challenge of maintaining their eco-friendly practices while expanding their product line and market reach.
Allbirds aimed to become a global leader in sustainable fashion while addressing challenges such as scaling production sustainably, entering new international markets, and continually innovating their product offerings.
How did they work to succeed?
To achieve these ambitious objectives, they embraced using OKRs, focusing on stretch goals to push their boundaries.
Allbirds set a stretch goal to establish a significant presence in the European market within a year. This involved overcoming regulatory challenges, understanding local consumer preferences, and adapting their supply chain for international scalability.
The stretch goal fostered a mindset of adaptability and innovation, resulting in successful market entry and a growing customer base in Europe.
To maintain their commitment to sustainability, Allbirds set a stretch goal of developing a new line of shoes using even more eco-friendly materials.
This pushed their design and research teams to explore cutting-edge sustainable materials, contributing to a new product line and positioning Allbirds as an industry leader in sustainable fashion.
Setting stretch goals carefully is the key. You must realize that you must understand your current performance and situation and then create incremental goals that push you to grow and achieve more than usual.
In working toward your OKR stretch goals, you need the support of your colleagues and leaders. You typically cannot do it alone and must stay in sync with your team members using a robust strategic goal-setting and execution framework like the OKRs.
You can even read about the best practices for creating OKR stretch goals and use OKR templates as inspiration and guide for your teams.