This kind of review process lets you set meaningful stretch goals too. Such goals are a popular leadership technique (popular among leaders, anyhow) for getting people toexert maximum effort. But many leaders are far too casual about how they specify and use them.

RAM: There can be a lot of hot air in stretch goals. They are useful, but not if they’re arbitrary, if they’re used as a tool to whip people into a frenzy of working harder. A stretch goal has basically two purposes. One, it can force you to think about doing things in a radically different
way; two, it can help you to execute exceptionally well.

For example, Sam Walton set a stretch goal with his famous declaration: “I will continue to reduce prices as long as I live.” He accomplished that. Henry Ford did it in the early 1920s. Matsushita did it in Japan. And Ingvar Kamprad of IKEA did that in Sweden for a long time.

Meeting his stretch goal forced Walton to find new ideas that Sears and Kmart never had: dock-to-dock logistics, online information transfer to suppliers, and cutting out a lot of waste in transactions. These procedures translated into everyday low prices.

Taken from: Execution The discipline of Getting things Done