Business

Oh, For the Love of Stretch Targets

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Grandiose goals are trickier for a State than for a business

INDIA IS A great land for ‘stretch targets’ and not just because they sound so eminently yogic. Even the ram-rod stiff love them. Indeed, it was the corporate culture of this country that first adopted the idea of such goals, goaded on by business gurus to push the limits of what’s possible—which is what they’re all about. As a management practice, their origin can be traced to GE’s former CEO Jack Welch. Stretch targets, he held, serve to ‘energise’ a company. “We have found that by reaching for what appears to be impossible, we often actually do the impossible,” Welch famously said, “and even when we don’t quite make it, we inevitably wind up doing much better than we would have done.”

It’s not a new thought, of course. “Shoot for the moon,” as Les Brown said, “Even if you miss, you’ll land among the stars.” And it’s not for nothing that America’s lunar landing of 1969 is held up as the example of such a target; President Kennedy wanted it done before the decade was out, and what sounded crazy in 1961 was achieved at least partly because it was. Other poets have done their own bit to inspire this sort of industrious insanity: songs, closer home, of ‘naa zameen, naa zamaan’ and ‘sitaaron se aage jahaan’.

Management, in contrast, is about achievements that are far more prosaic, and the filtering down of Welch’s wisdom to the KRAs of managers has stretched motives in various directions, not all of them foreseen. A mid-level executive at an MNC once confided that ever since his company’s top boss started pushing up his team’s goals, the sales potential being reported of a hot new launch began dropping drastically in zone after zone, a conspiracy among salesmen to lower the initial base of expectations so that they wouldn’t miss their stretched-up targets and lose their jobs; market reality ended up so distorted that a perfectly saleable product got labelled a failure. Graver still is the impact a sales bar set too high could have on ethics; Punjab is said to have more ultrasound machines than warranted by the need for health check- ups of organs and unborn babies.

Inevitably, the idea has been placed under the lens of management research. In a paper titled ‘Stretch Targets: What Makes Them Effective?’, Kenneth Thompson, Wayne Hochwarter and Nicholas Mathys say that their use ‘enhances motivation, performance and creative decision making’. Yet, just setting these targets is not enough. ‘[Plans] must include work environment changes that encourage acceptance. Two factors that we call ‘bureaucratic immunity’ and ‘structural accommodation’ encourage this acceptance.’

If there’s a sarkari ring to those two, it brings us to the other inevitability of the idea: its adoption by governments. As Robert Behn of Harvard’s Kennedy School of Government has written, it’s trickier for a state than a business to get grandiose with goals. ‘In business, if you miss a stretch target but still do ‘much better’, you will win kudos. In government, however, missing a publicly declared target of any size simply invites criticism and attack.’ Behn, though, is convinced of the idea’s efficacy for public projects, especially if those who propose these goals are ‘certifiably crazy’, which he quips ‘may be an essential component of the job description’. The point, either way, is to prod people. ‘A stretch target that is directly connected to the organization’s purpose invigorates and mobilizes people in a way that no ordinary target can. It connects everyday work to something significant.’

Significance, presumably, is part of the Modi Government’s aim as it sets India the grand goal of a $10 trillion economy—with zero poverty—by 2032, as outlined in ‘Transforming India’. It would take annual expansion at a rate of 10 per cent for the next decade-and-a-half—a stretch, no matter how you look at it, given the country’s past record and near-term prospects. Like all big dreams, there’s a roundness to the figure. It also has doubtless desirability. And since nobody can object to it, it’s just the kind of bow-bender that turns realists into spoilsports.

Still, a stern eye on a single lakshya could run the risk of letting elasticity morph into rigidity without anyone being the better for it: the risk of the Soviet Glass Factory Syndrome. You know the tale. Ordered by Moscow to meet an output target of an absurd number of tonnes, managers began churning out great big blocks of glass to report success. Millions of people, meanwhile, were left shivering at home, try as they did to keep chilly winds out with planks of wood, cardboard and what not. Window panes, alas, were simply not available.

What needs to be most elastic is the way an economy responds to aam needs. And that takes depth-of-field vision.

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