For years, Google has used an internal grading system for employees, called OKRs, or Objectives and Key Results.
Here’s how it works: Each Googler sets a goal and three key outcomes that result from achieving that goal. At the end of the quarter, they get a grade between 0 and 1 on each key result.
The ultimate aim isn’t to score a perfect 1, but to land somewhere between 0.6 and 0.7.
The idea is that, if you score a 1, your objective was too easily achievable. If you score between 0.6 and 0.7, then you were probably thinking big.
In order to set these ambitious goals and have them be credible, you also have to realize they’re not all going to be successful. We look for that 60% to 70% success rate across everything we do.
What’s nice about that too is you don’t actually need a sandbag [where an employee sets a goal they know is easily achievable], because people know like, “I’m going to set a bunch of hard goals, I’m gonna miss a bunch of them,” and it’s okay. It’s not okay to be 60% achieving on everything forever, but if I have a bad quarter, or bad few months, or bad year, or if I’m off on a few areas, totally fine.
Bock also said that Googlers’ performance on their OKRs isn’t tied directly to their compensation or eligibility for promotions. That’s because their goals should be what Larry Page and Sundar Pichai refer to as “moonshot” goals, in which they “really swing for the fences.” Presumably, it wouldn’t be fair to penalize employees for pushing themselves.
These moonshot goals are similar to what management theorists call stretch goals, which go beyond what seems possible.
Even outside of Google, setting (and trying to achieve) stretch goals is a crucial part of employee performance. Recent research by the leadership development consultancy Zenger/Folkman found that the most meaningful behavior of top employees — according to their managers, peers, and reports — is setting stretch goals.
For employees, the takeaway here is that it’s wise to set at least one objective that you know will be ridiculously hard to achieve. Then, of course, you need to work as hard as you can to get there. It could impress your manager more than setting reasonable goals and hitting them, no problem.
Meanwhile, managers can develop their employees by suggesting goals outside those employees’ comfort zones, and showing some understanding if they don’t make it all the way there. Ultimately, you’ll probably wind up with better — if not perfect — results because you encouraged greater effort.
Bottom line? Whether you’re working at Google or elsewhere, stretch goals are one path to make sure you and your team never stop improving.