The entire organization is in a rush. An important project is due Monday. Teams are scrambling and need to work through the weekend in order meet the deadline. Enjoyable weekend plans get scrapped, large quantities of caffeine are ingested, and employees and their spouses become grumpy. At the last minute, a critical issue comes up, pushing the project completion date back a week. The team is spent and exhausted, and the deadline is missed.

And then, nothing falls apart. The project gets completed a week later, and the company moves on to bigger and better things. False alarm.

The deadlines that matter

It's a common belief that to get the most out of employees, you should set aggressive timelines and espouse lofty statements about the importance of meeting your deadlines. A project is defined, and then managers hold their team's feet to the fire until the deadline comes.

But, do those deadlines really advance the company forward in any meaningful way? Well, it depends.

Deadlines that matter for organizations are typically external deadlines imposed by clients or partners, not internal deadlines. For example, in the early days at our company, OnDeck, we had a critical financing on the line that depended on us completing a software integration with a new bank partner. There was a hard date it needed to be done by, and we knew bad things would happen to us if we didn't get the project done on time. So, we did exactly what was required--drove the team hard to complete our part of the work and spent a good deal of time nagging our bank partner to get it to move faster with its side of the integration. We made the deadline with a couple of days to spare.

The software integration is an example of a deadline that was out of our control, was vital to the success of our company, and required plenty of manhours.

When you should--and shouldn't--work on deadline

In many industries, external deadlines like this are a way of life, and you have to organize your business around them. Think about companies that bid on government contracts with firm bid dates, or a catering business that has events to support every weekend. These businesses have to build competencies around delivering products and services on schedules that they do not control.

But in most businesses, true deadlines with meaningful consequences are few and far between. When managers choose to optimize around internal deadlines that have no real consequence as a way of motivating the team, the opposite generally happens: Company morale and team dynamics suffer. The team starts to feel whipsawed, and if done too many times, this practice leads to a loss of faith and burnout.

Manage the milestone--not the deadline

In contrast to deadlines, which keep teams focused on a specific date, milestones keep teams focused on specific goals that are internally set. A milestone could be a new-product launch, a signed contract with a partner, a level of revenue or sales volume, or a new marketing campaign. The focus is on continuous progress against that goal instead of an arbitrary date.

Milestone management demonstrates that you understand that any complex undertaking requires time. By emphasizing what your team is accomplishing, rather than when it accomplishes it, you keep the focus on delivering a quality result for the company. As a result, cutting corners to hit a certain date becomes increasingly less important.

Concentrating on milestones instead of deadlines doesn't mean you are a sloppy or lax manager. In fact, managing daily progress toward milestones might mean you keep closer tabs on your team members than you would if you let them work freely until a deadline looms.

Recognizing when you are in a deadline situation versus a milestone situation can be a critical part of managing your team effectively. The more you can save deadlines for externally driven events, the more you can focus on milestones that have real value. An awesome byproduct: This method earns you extra credibility with the members of your team, because they know your deadlines actually mean something.