Stretching Other People – Breaking Bounds

What you measure in management generally governs what you get. So if you set goals below the capability of a person or an organization, under-performance is likely to result. Transcend the aims that people believe feasible, and the opposite may well happen.
Establishing realistic targets
Jack Welch’s concept of stretch starts with producing realistic targets – for profitability, say, or new product introductions. Such targets must, pass the following three criteria: They are “do-able”, They are reasonable, They are within the organization’s or individual’s capabilities.
Set your own targets for your part of the business, making sure they fulfil these three criteria. These realistic targets are indispensable since they enable you to set a baseline, to authorize expenditure, and to apply comparisons that help to monitor trends and spotlight problem areas.
Setting stretch targets
Take your realistic targets and attach a much higher goal, a stretch target, to each one. These goals may “at the outset seem to require superhuman efforts to achieve,” says Welch, but “by reaching for what appears to be impossible, we often actually do the impossible; and even when we don’t quite make it, we inevitably wind up doing much better than we would have done.”
Work out your stretch targets every bit as carefully as your realistic targets. If, for example, your stretch target is to double the budgeted level of sales, ask yourself: What does that imply for revenue per salesperson, per customer, and per product? What are the consequences for production and distribution – can the commitment be met?
Achieving the Impossible
Welch imposed on one of his managers a daunting stretch target to improve productivity: the impossible-seeming goal was achieved in four years.
When Jack Welch found that rival makers of CT-scanners and X-ray machines were getting 50,000 scans per tube, against GE’s 25,000, he demanded a quadrupling of tube life. Confronted with this “impossible” target, the division eventually accomplished the superhuman. Tubes finally appeared that lasted for 150,000-200,000 scans. The new methods required also provided other very valuable benefits.
Searching out sin
Without high aims, you will not achieve extraordinary results. Most companies are all too satisfied with run-of-the-mill performance, complacent in the assumption that their achievement is superior. One of Welch’s greatest lessons is that success always conceals failure. However good the organization is, it is certain to be guilty of many sins – of omission and commission.
Left unconfessed and uncured, these sins can undermine the strongest companies. The only safe course is to be your own Grand Inquisitor, constantly probing for points of weakness and setting new stretch targets. If you can cut costs, raise productivity, and sharpen competitive edge when business is good, the payoff is far greater than if you wait for bad results to stimulate action. Do not make the inquisition negative. Challenge your company with key questions that will raise everyone’s sights and encourage people to become positive inquisitors themselves.
Be a Positive Inquisitor
Is market strength regularly monitored by market research statistics and customer surveys?
Is everybody working on stretch programmes as a spur to greater achievement?
Is constructive criticism encouraged no matter who is criticized?
Are high standards set, and does everybody know them?
Is success treated as a springboard for further advance?
Source: Jack Welsh Masterclass series, www.thinkingmanagers.com