At the time it seemed a bit outlandish and ill considered. But has proven a good benchmark. 

McKinsey are recommending adding an order of magnitude to the speed of productivity improvement which seems implausible on first glance.

But if some of your competitors find a way to do achieve that sort of prodcutivity their costs will plummet and so they will be able to compete at a completely different level to the current normal (eg something that cost $10 to make now will cost $5 in 12 months).  That means if there is 20% margin at the moment ($2.50) in 12 months a competitor will be able to sell that product at $9.  So selling at $1 below your cost and with twice as much margin as you.  The following year (when your cost is down 4% to $9.60) the competitor's cost is at $2.50 per unit.     

Given those sorts of stakes it an idea worth discussion so give me a call if you want to do that. 

I enjoy helping businesses to think through these sorts of challenges. 

Here is the article... Mckinsey & Co claim that The resource revolution represents the biggest business opportunity in a century. However, success requires new approaches to management. Companies that try to stick to the old "2 percent solution” (just improve performance by 2 percent annually and you will be fine) are going to become obsolete quickly. Businesses that can deliver dramatic resource-productivity improvements at scale will become the great companies of the 21st century.