Setting targets

Well-defined targets serve as a framework for decision-making as the transformation progresses. They create the necessary tension between potentially competing objectives, ensuring that choices are made with the overarching goals in mind. This becomes invaluable when facing difficult decisions, which are inevitable in any significant change.

In contrast, setting targets that are too high-level and lack the necessary granularity can lead to a lack of clarity and motivation. While targets that are too narrowly focused can stifle innovation and fail to capture the broader vision of the transformation.

A critical by product of rigorous target setting, is that it builds leadership alignment and commitment, as the sharper focus of the type and scale of potential changes forces the tough discussions at the highest levels in the organisation, that are needed to build genuine collective leadership commitment to change that is essential for successful implementation of the transformation strategy. When leaders are united in their understanding of what constitutes success, they can more effectively communicate this vision to their teams and stakeholders. This alignment creates a powerful momentum, pushing the organisation to think radically differently.

When setting targets for a business transformation, it's crucial to consider a mix of quantitative and qualitative goals. Financial targets, such as cost reduction or revenue growth, are often at the forefront. However, it's equally important to include qualitative and operational targets, such as customer-focused metrics, or goals related to cultural change or skills development.

Remember the adage, what gets measured gets done – if the only metrics being measured are quantitative, implementation is likely to skew towards those targets at the expense of others. Qualitative targets are typically harder to measure but are no less influential on long-term success, and in our experience investing the time to think creatively about proxy or indicative measurement mechanisms is tell well spent.

Similarly, set targets that encompass different business domains, such as customers, efficiency, environment, people, for example. Having a mix of targets will often force trade-offs in design and delivery, forcing the organisation to think differently about how it does business.

For instance, one organisation we worked with successfully articulated a simple yet powerful target to reduce complexity by having no more than eight layers between the CEO and any employee. This metric addressed both cost and organisational agility, forcing the company to rethink work processes, governance structures, and overall efficiency, while also bringing a sharp focus to decision-making during the transformation.

Our experience advising major organisations through successful transformation programmes has enabled us to identify three key strategies to help set meaningful, well-defined targets:

1. Balance short-term and long-term goals. While immediate cost savings might be necessary, also consider long-term benefits and sustainability. This approach ensures that the transformation creates lasting value for the organisation.
2. Create a target hierarchy or ‘strategic pyramid’ with two or three top-level targets and supporting sub-measures for different organisational levels. This structure helps cascade objectives throughout the company and ensures alignment across various functions and geographies.
3. Invest time upfront in determining how to capture and measure progress against targets, including less quantifiable ‘soft’ measures. This step is crucial for maintaining focus and adjusting course as needed throughout the transformation journey.

Clearly communicating the rationale behind the targets helps to ensure buy-in and motivation from employees. You need to articulate the ‘why’ behind the transformation – in positive terms - as much as the ‘what’, in a way that reflects the history, culture and maturity of the business.

To drive alignment among leadership teams, consider organising well-structured engagement events with professional facilitators. These sessions force leaders to invest the time to really understand the implications of the transformation, facilitate the tough leadership conversations required to build genuine alignment and agree on a common set of leadership behaviours and accountabilities to drive the change.

Setting clear targets is a critical step in planning and executing a successful business transformation. Well-defined targets should serve as a course correction tool rather than just a means to justify success, allowing for adaptability in an ever-changing business landscape.

By carefully considering the types of targets to set, employing effective strategies for target-setting, and ensuring proper communication and alignment, you can significantly improve your chances of achieving a successful and lasting transformation.