Return to Target setting


  • Global competition is now so intense that best practices soon become the norm, so even better is needed, and sooner, if customers are to keep returning to you
  • As Cecil Beaton, the photographer, once said: “Be daring, be different, be impractical, be anything that will assert imaginative vision against the play-it-safers, the creatures of the commonplace, the slaves of the ordinary”
  • Hence winners set aspirational long term targets – dreams that just might become reality
  • Such dreams might be ‘to be the leading, biggest, best, most valuable company’ or ‘to be number one or two in our chosen markets’
  • If you’re a small or medium sized company, you might find such targets to be fanciful, but why not aim for the stars?
    • The downside, as Peter Lynch of Fidelity once noted, is that “long shots almost always miss the mark” and 99% of small companies with big ambitions fail
    • The upside, however, is that, by the law of large numbers, a few will always win and become the next Microsoft or Glaxo – and SMEs need guys with lofty ambitions plus bags of enthusiasm and drive not only to get them up and running but also to grow fast
  • If, on the other hand, you’re a large company and you’ve already had substantial success, dream targets may represent only one or two more steps up – they may not even be dreams any longer, more realistic goals with short-term deadlines
  • Overall, dream goals are “what companies need to break out of a vicious cycle of competitive benchmarking, imitation and pursuit” according to W Chan Kim of INSEAD
  • You can’t copy others if you want to beat them – you have to aspire to be much better than them
  • Hence Asian car companies became the most efficient in the world – they had, and continue to have, aspirational targets such as ‘to take 30% of costs and more out of the system over the next two years’ – their mantra is ‘to get good, then better’
  • Jack Welch pushed for similar goals at GE: “We found that by reaching for what appeared to be the impossible, we often actually did the impossible; and even when we didn’t quite make it, we inevitably wound up doing much better than we would have done”

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