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When Should We Lower a Target and When Should We Try Harder to Figure Out How to Reach It?

Jan 29, 2020

Republished from Mark Graban’s Lean Blog
By Mark Graban

Today, I’m sharing a question from a reader who started their career at Toyota and now works at another company. See previous posts with reader questions.

The reader has given me permission to share this — to get your input — and there are no identifying details included:

I came across something interesting at work around goals that I wanted to share with you and perhaps get your thoughts.

At the beginning of the fiscal year, our manufacturing sites submitted their cost savings targets to me. I looked them over to make sure they both seem reasonable yet challenging and asked questions as needed. From there, I submitted them to the operations VP for final approval. The VP accepted them without question.

We’re at the end of the first quarter, and 3 of the 9 sites are not meeting their run rate target.

I’m not surprised — it’s early in the year, and I expect sites will go red from time to time. Red doesn’t “bother” me, it’s just a trigger for action.

But the Process Improvement manager from one of the sites emailed me requesting that their annual savings target be reduced.

His reasoning was that the savings ‘forecast’ had changed — but from what I can tell this forecast is a linear extrapolation of their current savings that are not meeting the run rate target. That’s not technically a forecast.

This is very strange to me, and I’m not sure how to respond.

At Toyota, no one ever asked a target to be reduced because they thought they couldn’t hit it. The pervasive mindset at Toyota was that it was better to be red because the bar was set to high than green because it was set too low.

This was ingrained in me, but I’m battling between what I learned at Toyota vs. conditions of my current organization where not meeting target is viewed much more negatively.

I told the PI manager that he needed to get approval to reduce the goal from the GM and operations VP, not me. I also told him I did not believe the response to not meeting a run rate target was to reduce the target but rather to view as a challenge and problem to be solved.

I expect I will get some sort of response about how “business conditions” have changed, etc. etc. but I still believe even if that was the case it would send the wrong message to reduce the annual target. They should aim to hit the original goal in spite of those changing conditions.

I’m curious as to if you have seen this before and if my approach might be too harsh for an organization less mature than Toyota…

My initial reply was this:

I agree that it’s unfortunate that they’d lower the target instead of working harder to figure out how to achieve it.

Are you working in an environment where people get punished for not hitting targets? That might make people very risk averse…

I’m not sure what to suggest. From your position, you might not be able to change the culture that’s driving people to lower the bar…

Their reply was that it probably wasn’t a matter of fearing punishment, but more just a matter that the culture is one where people like to hit targets (or they hate to miss them).

What are your thoughts?? Is it ever appropriate to revise a goal or target downward, or should we always be striving to coach people up?

Is it the case that we “can’t hit the goal” or that we “haven’t figure out how yet”?

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