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Target Setting

Articulating strategy and identifying strategic objectives often get the spotlight as major scorecard-building challenges. But defining measures and setting targets are no less challenging – for different reasons. And unlike the more stable BSC elements, targets must, by definition, be continually revised. One of the most delicate tasks is setting effective stretch targets – those that are ambitious, yet achievable without being demoralising. The implications are great, not just for company performance but for individual performance and morale. Here, Robert Kaplan discusses external and internal benchmarks across the four BSC performance perspectives, presenting proven methods for setting stretch targets that deliver the results leaders want without incentivising the wrong behaviour.