Impact of a Stretch Strategy on Knowledge Creation in Quality Improvement Projects

This study develops and tests a framework about how a stretch strategy affects knowledge creation in quality improvement projects. First, we found that sense of challenge in a project team was positively associated with the level of knowledge creation. This result controlled for two important contextual factors-psychological safety and learning behaviors-that also influenced knowledge creation in teams. Second, we studied two antecedents of sense of challenge and found problem-driven gap, which reflected the intensity in problem solving, positively affected sense of challenge; but performance-driven gap, which captured the relative difference between current and targeted performances, showed insignificant effect on sense of challenge. Yet performance-driven gap interacted synergistically with problem-driven gap in positively affecting sense of challenge. When the intended purpose of a stretch strategy is to encourage innovation and knowledge creation, our findings suggest an organization should focus on motivating a strong sense of challenge among organizational members through problem solving. Without a problem solving focus, the common practice of setting high performance goals to stretch people can be futile and ineffective.