Stretch goals often destroy the companies that go “all in” to pursue them. When leaders sustain a laser-like focus on driving key outcomes (i.e. revenue, cost cutting, etc.) they are more likely to damage their company than they are to achieve their goals.
We call this sustained focus on target outcomes the “Payoff Tradeoff”. Executives or managers press their teams so hard to generate results that they set in motion a tragic course of events. It can happen within any department and any team in a company, but it is most visible when it happens in Sales.
For example, in the push to achieve moon-shot corporate growth, sales teams begin pressing to close everything near the end of the pipeline. For a short time, revenue improves and that attracts the attention of leadership. More pressure is applied because progress is perceived. But, in the blitz to close business, the primary function of quality prospecting and qualifying leads has been neglected. The greater the pressure to generate the sales “payoff” the weaker the base of the pipeline becomes. Opportunities begin to be harvested prematurely; or worse, misrepresented in forecasts. Now there is weakness at the top and bottom of the pipeline. The ‘numbers’ provided to leadership look like growth is on the horizon. They double down on pressure to meet numbers. But they are about to spiral downward.
The imbalanced focus on the “Payoff” comes at a “tradeoff” with Primary and Traction activities—and it is these less glamorous activities that sustain health in the long run. Depending on how long this phenomenon is allowed to continue, it can weaken or even destroy a company. Sadly, many promising and visionary leaders fail to understand how their “inspired” leadership actually caused their demise.
Look no further than the recent examples of Yahoo! Wells Fargo, Samsung, Sears…