There’s plenty of tests to define a what a good target might look like. Perhaps the most popular being the SMART test, that a target is Specific, Measureable, Achievable, Realistic and Time specific. However there’s less to steer the process to get to such a target which passes all these tests.
Targets are one component to a balanced assessment of performance, but only one. The others are (a) trend – the levels of performance until this point and (b) benchmark – the level of performance being achieved by comparable others. See What a performance on how to do that.
Simply using targets as a measure of success or failure can be quite crude, unless they’ve been very well constructed. After all the measure is binary – achieved or failed, and to be fair, the world is typically not that simple. The secret to setting a good target is that it should be determined by first assessing performance on those other two dimensions of trend and benchmark.
So three parts….
Part 1: Trend
As this is typically using like-for-like data over time, this is probably the best starting point. The current level, past levels and a trajectory. It can be helpful to consider a range of time periods, rather than blandly compare one end of year figure with a previous one. Much better to understand the underlying trend, and help separate the real trend from any noise (natural variation). Simple visual tools - such as plotting the measure over time - can give quick and easy insight, without having to rely on clever statistical techniques, as the eye is very good at seeing patterns.
Part 2: Benchmarks
This may not be perfect like for like comparison but at the least provides an indication of the levels of performance being achieved elsewhere. In most cases there will be no single comparison, rather a range of sensible comparitors. In corporate terms this might be geographical (national, regional, local) or other organisations, or other sectors.
The next level of sophistication would be to assess the trend for these benchmarks - are they going in the same direction as your trend - to provide a more thorough benchmark assessment. Again simple visual tools can be both easy and effective.
Part 3: Previous target performance
A view to previous targets, and in light of the above trend and benchmark, will provide a sense to which they may have been about right, or over or under ambitious.
The next level of refinement would be to give a sense of relative emphasis to these three dimensions. Here a starting point.
Trend. This is perhaps the strongest predictor of future possibility, and should have the strongest weight. There is also some implicit assumption that in setting the target there is a very reasonable degree of control over it. Weight = 3
Benchmark. The risk here is comparing apples and pears, but still should be seen as broadly indicative. Weight = 2
Previous Target. Given its arbitrary nature, and unless set well previously, the least significant indicator. Weight =1.
So ready, aim fire:
... ready – set a sensible target using a process
... aim – focus activity to achieve that target, ‘targeted effort’
... fire – a sensible target and focussed effort give the best chance of success.
The assessment of trend and benchmark, is really just a proxy for understand the cause and effect relationships at work which influence the measure for which a target is being set. After all a target is only sensible where there is a reasonable degree of control of the measure. These relationships can be quite tricky to map and measure exactly, so the trend and benchmark simply summarise the current and past state of play.
There are alternatives of course….”to be sure of hitting the target, shoot first, and call whatever you hit the target”. Ashleigh Brilliant