Target setting

Published on November 29, 2022   16 min
Hello, I'm Pietro Micheli. I'm a Professor of Business Performance Innovation at Warwick Business School in the UK. Welcome to the fourth talk on performance management. The topic today is target setting.
Targets as we will see, are typically numbers, percentages or ranges over time. In many instances, what organizations do and politicians for that matter is to really set something that is aspirational, it's not necessarily related to the past results of the organization. Sometimes targets are set just as a means to encourage people to look at something positively even though they're not necessarily based on facts or previous performance, in other cases instead, they're used very well. There is plenty of evidence that shows that targets can actually function in many different ways to really inspire and motivate people to achieve better performance. Let's have a look at a few examples. I'll start with a positive one, and then I'll see a few negative ones to try to understand why and how targets work or they don't.
The first example comes from the World of Motorsport. It's not strictly speaking a business example but it captures a number of points that are very important when we talk about target set. The first photo is the one of a crash. As you can see, this happened in the early 2000s and the driver involved was an Italian driver called Alex Zanardi. He was quite known as a driver in Formula One but also he was quite a charismatic character and so known to people in Italy so for us he was a key person in the World of Motorsport. Unfortunately, it was a terrible accident and he lost his legs. It was tragic in many different ways as you can imagine. Zanardi then reinvented himself and being very competitive, he got himself into playing a role in a different sports called handcycling. You can see him here in action. Even though he was getting progressively older, in his forties and eventually in his fifties, he started to compete at the highest level and he won various medals in the paralympics in London 2012. He won two golds and a silver. In Rio, he also won a gold and silver, you can see him here wining in Rio 2016. Then he competed in many other sport events like Arrow Man, he did various marathons and so on. Sadly he then had another accident so he is recovering at the moment. But essentially the story of Zanardi is amusing in relation to target setting because what he did especially in preparation for the later events, Rio 2016 for example, he almost was double in age compared to his competitors and so he really had to be as efficient as possible. He worked really hard with his coach to try to understand how to be as efficient as he could. They identified a certain level of performance that he could achieve that was essentially stretching him but it was achievable, what in jargon we could call challenging but achievable. That's really a key notion in target setting, something that stretches us but something that we can achieve. He figured out that, 235 watts which is the unit of power, was something that realistically he could achieve in that competition, and he did. He trained for that and eventually that was indeed what led him to succeed against the others. You can imagine that in sporting competitions of this kind, people may accelerate at the beginning, maybe have a dip in the middle or at the end and so trying to be more efficient can give you that one, two, three, maybe five percent extra lead that allows you to win, and that's what he did. This story is positive in the sense of setting a target that is specific, it's 235 watts, not a lot or do your best for example. It's something that he was involved in so he had a part to play in the process, it was challenging but achievable, and it's certainly something that motivated him. This is a very good illustration of what target setting could be and also how this can motivate people to achieve higher levels of performance.