During many of the times I’ve felt challenged, I’ve had an internal tendency to want to get out of the challenge, but I’ve also enjoyed the struggle at some level. It’s an interesting tension of enjoying the pressure but at the same time, wanting to be released from it.

If you reflect on your life, wouldn’t you agree that the most rewarding times were when you were challenged?

As leaders, we must learn to challenge our people at the right level. It’s kind of like an elastic band — if you stretch someone too much, they’ll break; but if you don’t stretch them enough, they’ll feel like they’re not being driven towards their real purpose. Csikszentmihalyi describes the concept of flow as ‘being completely involved in an activity for its own sake. The ego falls away. Time flies.’ This occurs when we feel challenged, but not to the point of breaking.

Work environments that are devoid of challenge leave an employee uninspired. Challenges inspire overachievers and underachievers alike to give more than what is expected of them: top performers want to achieve the impossible, and low performers are forced to step up their game. When I look back at my life, every great achievement I’ve had (school, career, personal life, etc.) stemmed from a defining moment when a challenge was presented and I took it.

Here are three ways you can create challenge:

1. Rotate jobs. Job rotation lessens the boredom and inertia of routines. Having your employees work in different areas of the organisation for a period of time challenges them by giving them the opportunity to learn new job functions and sharpen their skills.

2. Set goals. Make your employees active participants in goal setting. This creates a sense of ownership and accountability for the results. The goals that are set should be specific and quantifiable, such as a 10% boost in sales within a two-month period, or completing five leadership trainings by the end of the year.

3. Promote creativity. Challenge your employees by giving them incentives for creativity and for ideas that are eventually adopted and implemented by your organisation.

How can you create the right level of challenge for your people at the start of 2013?

I’d love to hear your ideas.