Background The healthcare industry faces significant challenges and opportunities that demand lofty aspirations and novel approaches. Pursuing seemingly impossible goals, popularly known as ‘stretch goals’, can be a way to instigate dramatic change and innovation, but such extreme goals also come with substantial risks. After briefly reporting the results of a national survey we conducted to provide examples of how stretch goals are used in healthcare, we review and translate prior research on the effects of stretch goals on organisations and their members.

Findings The survey results indicate that stretch goals are used regularly in healthcare and a wide range of other industries. Roughly half of respondents indicated that their current employer had used a stretch goal in the past 12 months. Healthcare stretch goals were focused on reductions in errors, wait times, and no-show rates, and increases in workload, patient satisfaction, clinical research participation, and vaccination uptake. Our review of prior research suggests that stretch goals can instigate both positive and negative psychological, emotional, and behavioural reactions. Although existing scholarly evidence suggests that stretch goals will have problematic effects on learning and performance for the majority of organisations that use them, stretch goals actually can have beneficial effects under some specific circumstances that we outline.

Conclusion Stretch goals are risky yet regularly used in healthcare and many other industries. They can be valuable, but only when an organisation has both strong recent performance and available slack resources to devote to goal pursuit. Under other conditions, stretch goals tend to be demotivating and destructive. We explain the paradoxical nature of stretch goals, whereby the organisations least likely to benefit from them are most likely to adopt them, and offer guidance on how healthcare leaders can tailor their goal setting practices to conditions most likely to lead to successful outcomes.