Stretch Targets

Description

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  Quantifiable goals set for Key Performance Indicators, that challenge the organisation to strive to attain (and even surpass) the objectives established in its (Confirmed) Business Vision.

Client Value

• Stretch targets convey to the organisation the degree of change that must occur as a result of the BPI effort and help to build enthusiasm for the initiative throughout the organisation.
• Not setting performance targets or setting targets that “stretch” the organisation can result in “under engineering” of processes and a situation where the new performance of redesigned processes are insufficient to allow the organisation to achieve its (Confirmed) Business Vision. “Low-ambition” targets do not challenge the design team sufficiently and, as a result, lead simply to “optimising” the existing situation instead of coming up with radically new ways of doing business.

Approach

The task is to establish quantifiable targets for Key Performance Indicators previously identified, the size of the gap between the stretch target and the current performance and to validate these goals with Senior management.

1. Conduct a workshop to establish Stretch Targets and timeframes for each of the Key Performance Indicators
1. Develop targets and timeframes for each measure.
2. These improvement objectives and the time frames for their achievement must be aggressive, extending the reach of the organisation. A good rule is “if you’re comfortable with the objec­tive, you haven’t set it high enough.”  The degree of aggressiveness or “stretch” may vary depending on the type of BPI planned. Good performance improvement objectives can be characterised as:
1. Driven by what the customer perceives, and by the overall business direction as expressed through (Confirmed) Business Vision and Critical Success Factors
2. Clearly defining the level of improvement expected (incremental, significant, or dramatic) in non-financial performance (e.g., speed, service quality) and financial areas.
3. Stretching the organisation (without being unrealistic), given the organisation's commitment to, and capacity for, change.
2. Validate and build consensus for the targets
1. This activity is best accomplished in a workshop setting where the expectation for stretch goals can be determined, and consensus on the relative weight of each performance objective can be established.

Guidelines

Problems/Solutions

• Because the performance improvement objectives must be attainable in the eyes of those who must implement them, the project team should help participants comprehend the links between performance improvement objectives and the functional-, process-, and job-levels within an organisa­tion.
• In some cases, workshop participants may be reluctant to set true stretch objectives.  This reluctance can be interpreted as resistance to making a commitment  for change.  Address these issues with project sponsor(s) as soon as they arise

Tactics/Helpful Hints

• Sponsors must take the lead in setting objec­tives to strengthen and show ownership of the project.
• It is important that the performance improvement objectives for each measure (e.g. customer satis­faction, business process productivity, organisational learning, and financial improvement) have stretch objectives set that are challenging yet attainable.

Resources/Timing

• Interviews and workshops should include a cross-section of participants with functional, pro­cess and job-specific experience.