Can Do!

Save the stretch goals for AFTER the decision is made

Reaching“We shall fight on the beaches,
we shall fight on the landing grounds,
we shall fight in the fields and in the streets,
we shall fight in the hills;
we shall never surrender.”

Winston Churchill’s “We shall fight on the beaches” speech came at a low moment in Britain’s confidence. In the early hours of that very morning, Britain completed its retreat from continental Europe. They were now alone, facing Hitler’s seemingly unstoppable advance.

A hallmark of great leaders is the ability to inspire their people to endure hardship and defy the odds. Churchill rallied the nation to look past abject failure on the continent and stand resolved to do the impossible.

We value business leaders who can similarly stir the emotions of their people to attempt great challenges. But inspiration is a two-edged sword.

The Right Time…
Like most good things, there is a right time and place for challenging the troops to reach beyond what they believe possible. The right time is after the decision is made. Once the course is charted, charging up the troops to give it their all is crucial.

Churchill’s speech occurred after his decision to continue resisting the fascist onslaught. He wasn’t asking the people whether they could face the challenge ahead – he already knew they must. He was preparing them for that challenge.

…And The Wrong Time
The wrong time to motivate the troops to take on stretch goals is before the decision is made.

I’ve often witnessed project leaders prod teams to aggressively raise the benefits and/or lower the costs, to replace “most-likely” estimates with stretch goals. Teams then change their numbers, either succumbing to false optimism or shamed into it. Once returns hit an acceptable threshold, they request funding.

But what is the decision-maker receiving? They get an over-optimistic scenario – a projection that has less than a fifty-fifty chance of being realized. In other words, the odds are already stacked against success.

Balance First
Leading project teams during the evaluation is a delicate balancing act. It’s easy to forget that the goal is to deliver high quality information, not simply get the project approved. Project leaders need to receive this message from senior executives early and often.

Inspiring the team to set stretch goals sabotages good decisions. Hold onto the motivational speech until the numbers are firm. Then, if the project deserves funding, pull out that speech and rally the troops!

© 2013 Verax Point

About Dave Wittenberg

I am all about equipping business teams to enjoy greater payoffs on their biggest bets. I bring a unique combination of evaluation expertise and behavioral insights developed over the course of more than 300 major strategic initiatives. Applying a highly effective, disciplined framework, teams unleash their full capabilities to generate better solutions, wring out hidden waste, and deliver superior returns. Specialties: Investment Evaluation, Decision Excellence, Strategic Analysis, Mergers and Acquisitions, Investor Relations, Leadership Development, Education & Training
This entry was posted in Biases & Traps, Leadership & Decision-Making, Valuations. Bookmark the permalink.