Page 131 - HBR Leader's Handbook: Make an Impact, Inspire Your Organization, and Get to the Next Level

120 HBR Leader’s Handbook

Ratchet up expectations
We’ve seen that setting high expectations is a critical leadership step for de-
veloping a vision (remember the BHAGs), creating a strategy (moving into
new territory), and getting the best out of people (stretch assignments). It’s
also the essential starting point for improving results.
To set a challenging performance goal, start by identifying one or two
key performance measures that can tell you whether your team or unit is
moving toward your aspirational vision (or not). This could be a revenue or
profitability number, or a measure of quality, cycle time, customer satis-
faction, new product introduction, and so on. Then come up with a specific
improvement target that will cause your people to gasp because it seems
impossible. If you get that reaction, you’re on the right track. You want
people to realize that just doing more of what they are currently doing, or
just working harder and longer, won’t get them to the goal. Instead they’ll
need to work differently, smarter, and more creatively, and they’ll have to
figure that out along the way.
At the same time, of course, you shouldn’t make the stretch goal so
high or outlandish that your people will give up and not even try. So sup-
port your stretch goal with some evidence that success is possible—that
others have achieved similar results, or that customers are in need of what
you are offering. (For other ways to develop stretch goals, see the box “How
do you develop a stretch goal for your team?”)
For example, when Macia began at XL, she quickly brought her busi-
ness and functional leaders together to look at the overall data about the
business, which they had never done as a team. In that session, she pointed
out that one of their eight P&C businesses had achieved a 3 percent share of
the national market. Although modest, if all of the businesses could get to
that level, their combined premium revenue would more than quadruple to
over $3.2 billion. “Obviously,” she told them, “we won’t get to this number
overnight. But significant growth is possible—we’ve proved it in one area—
and we should aim for it over the next three years.”
Macia acknowledged that the goal was going to be hard to reach. But
she also expressed the strong belief that her people and the organization