What Is The Real Value Of Having A Target

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Monday, 6.39pm

Sheffield, U.K.

Fairness is not an attitude. It’s a professional skill that must be developed and exercised. – Brit Hume

My first real understanding of the differences in opportunity people across the world face only came when we were expecting children. We took classes, a free one and one we paid for. And I realized, looking around me, that all the children who were going to be born to parents that had the relatively small amount of money needed to pay for their class would have books and attention and resources. The free session had a different set of parents, ones with more challenges and the children born to them would have less – and that difference, cemented at birth – would only increase until they went to school and then the gap would get increasingly harder to close all their lives, not considering other factors like gender and race.

I have never been a big fan of targets. Maybe it’s a cultural thing – I was brought up to think that the work was what mattered, not the results. If you do what you need to do every day the long-term will look after itself. And if it doesn’t it won’t matter anyway.

But even that ability to “get on with the work” is a privilege. It presupposes that you have the time, knowledge and money to do work. And not everyone has that.

I’m learning, quite late really, about the power of targets to change behaviour. But there’s something else about what’s going on that seems to suggest that targets are a good thing. And it’s the availability of information.

Take investing, for example. Once upon a time you could have an information advantage. If you read the papers and looked for opportunities you might find a bargain. Those days are gone because information is widely available and the ability to profit from an information advantage no longer exist. Now, you’re best off buying the market or buying a great company at a fair price – not looking for an edge.

This “transparency” is what’s making the difference in sector after sector, workplace after workplace. Your reputation is on the Internet, with metric after metric telling the world how you’re doing on financial and non-financial metrics – how you treat your people, what you’re doing to the environment, who you’re paying.

Setting a target does two things: it sets up an evaluation framework and creates an incentive mechanism. For example, if you run a conference these days you’ll be evaluated on how diverse your panels are. If you have a male only panel – a “manel” – people will ask questions that you will find hard to answer. You have an incentive to create a diverse panel if only to avoid the embarrassment of being seen as a unrepresentative and behind the times.

The incentive mechanism spurs you to take action and you can do one of two things. You can create real change and start to transform your operations so that you develop a diverse workforce or you can game the system and make sure that you meet the numbers. But it’s going to be hard to do that over the long term because of the availability of information – it’s certainly harder to do this than it was in the past. Some people perhaps look longingly over at the more authoritarian regimes in the world remembering when they could do the same thing but still claim to be democratic.

Diversity and representation is one very important space where targets seem to be making a difference. Another area where you can see action is when it comes to climate change. Clear targets like the UK’s Net Zero target and the Paris Agreement’s 1.5 degrees science based one are causing companies to make public statements about their commitments – ones that they increasingly feel compelled to do to protect their position in the economy. And that’s a good thing.

Perhaps the biggest benefit of this approach is that it’s a fundamentally fair way of looking at what the economy is meant to do. If the economy is made up of many people but the benefits of their work goes to a few it used to be ok to argue that those few were entitled to more because they worked harder, because they were “better”. And that’s not a bad argument really because you do want people to be the best they can be. But what you also want to do is dismantle the barriers that are in the way of people being the “best” they can be.

Cheers,

Karthik Suresh

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