Stretch Goals Can Lead to Breakthrough Thinking!
A goal by definition is an objective we want to reach, but a “stretch goal” is quite different as defined by Jack welsh, the former CEO of General Electric. He says that stretch goals “are essentially stimulating the staff to create goals that, given the current situation and what is known today, appear beyond their reach or otherwise unattainable. This is getting the employees and or managers to conceive of things that are at a magnitude beyond their wildest expectations or beliefs”
As Jack Welsh suggests in his quote, it’s in our human nature to select safe, comfortable and reachable goals. Why should you or your team stick their necks out when management is only asking the bare minimum goals from you? I see this “small thinking” attitude all the time.
I recently asked a material manager at a 238-bed community hospital what his savings goal was for next year and he told me that his senior management had set a goal for him of $50,000. By my estimate this material manager should meet this goal in less than three months — not one year. That’s not a “stretch goal”; it’s a puny, undersized, and no brainer. If I was this material manager I would at least triple my senior management’s goal to $150,000, just to keep me from falling asleep at the wheel.
If you want to have BREAKTHROUGH savings, then you need to bring about breakthrough THINKING for yourself, your staff and your value analysis teams. The best way I know to do so is for you to set “stretch goals” for every level of your supply chain operations vs. letting your senior management set them for you. Then brainstorm with your supply chain team to discover how you will meet your oversized goals.
As an illustration, one of our supply chain clients established a “stretch goal” for their department of $11 million for this fiscal year, although they didn’t know how they would make these savings happen when they committed to this goal. That’s when their supply chain team honed in on their utilization misalignments with our assistance and found $15 million dollars in new potential savings. If they would have settled for a so-so savings goal instead of establishing a stretch goal, they wouldn’t have found these big savings opportunities! With breakthrough THINKING, they are now on target to achieve breakthrough SAVINGS – not meager results!
So remember, when you are setting your supply chain savings and operational goals for 2010, don’t take the road most travel by establishing safe, easy and undersized goals. Stretch yourself, your staff and value analysis team(s) by instituting oversized goals that will lead to breakthrough thinking and gigantic results.
Filed Under: savingsblog • Supply Chain • Utilization Management
