Every target you set sits somewhere on a scale of difficulty. Too easy and nothing changes, because the number can be hit by carrying on exactly as you are. Too hard and nothing changes either, because people stop believing in it somewhere around week six and quietly go back to what they were doing before. The Goldilocks principle is that the useful zone is the band between the two — and it is narrower than most owners assume.
Most owners miss it in both directions at once: a comfortable number for the business, and an impossible one for themselves.
What the model actually says
The zone is not defined by the size of the number. It is defined by the gap between the target and what the business can currently do. A £2m target is lazy for one firm and delusional for another, and the number on its own tells you nothing.
Too easy means the target can be hit without changing anything. Too hard means it cannot be hit even if everything goes right — every hire lands, nobody leaves, no client churns. Stretch means it can only be hit if two or three specific things change, and you can name them.
That is the whole test. Ask what would have to change. If the answer is nothing, the target is decoration. If the answer is everything, it is fiction. If the answer is two or three nameable things, you are in the zone.
Why it costs you either way
A too-easy target costs you a year quietly. Nobody complains. The number gets hit, everybody feels competent, and the capability of the business has not moved an inch. You find out three years later, when a competitor who did move is taking your work.
A too-hard target costs you credibility, which is far more expensive to rebuild than a bad quarter. Once a team has watched a number be missed by forty per cent, they discount the next one before you have finished announcing it. You then inflate the following target to get the same attention, which makes it worse. Within two years, targets are theatre and everybody knows it.
The mixed version is the most common and the most corrosive: comfortable targets for the business, impossible ones for the owner. Grow twenty per cent, hire two people, fix the systems, lose two stone, be home for bath time every night and read on Sundays. The business coasts and the owner burns, in the same twelve months.
A worked example
An agency turning over £900k with six people, running at about eight per cent net, so roughly £72k. Three candidate targets for next year, all defensible in a meeting. Illustrative figures, but the shape of the reasoning is the point.
£950k. Growth of about six per cent. Two existing clients are already expanding and there is a small price rise going through in April. This number gets hit if everyone takes the year off. It is the floor with a bow on it.
£1.5m. Growth of sixty-seven per cent — £600k of new revenue. At an average retained client of £4k a month, that needs roughly twelve new clients inside twelve months. At £150k of revenue per head today, delivering £1.5m needs about ten people, so four hires on top of all that selling. Everybody in the room can feel it is not real, and by March they have stopped pretending otherwise.
£1.15m. Growth of about twenty-eight per cent — £250k, or five new retained clients at £4k a month, roughly one every ten weeks, alongside a proper price review on the existing book. Two hires, or one hire plus a fix to utilisation. Hard, and possible.
The third number is the only one where you can write down what has to change on the back of an envelope.
The zone moves, and it differs by person
Whatever was stretch last year is somewhere near comfort this year, assuming anybody learned anything. That is why targets have to be reset rather than rolled forward with a percentage bolted on. A business that has just built a repeatable sales process is capable of a step that would have broken it eighteen months earlier.
It also runs at individual level, which owners forget when they cascade a company target down the org chart. The same objective can be comfort for your best salesperson and genuine stress for the person who joined in March. Divide by heads and you will demotivate one and frighten the other, and both will miss. Set the company number in the stretch band, then set each person’s contribution against their own current capability. Two people can carry different numbers on the same team without it being unfair — giving everybody the identical target is not fairness, it is a refusal to know your people well enough to judge.
How to set one this week
- Work out the floor. This year’s revenue plus only the growth already baked in: contracted work, clients visibly expanding, price rises already agreed. Any target at or below that is decoration.
- Work out the ceiling. The number you would hit if every single thing went right and nothing went wrong. Write it down. Anything above it is a wish with a deadline attached.
- Sit the target about two thirds of the way from floor to ceiling. Not the midpoint, which is usually still comfortable, and not the ceiling, which is failure dressed up as ambition.
- Name the two or three things that must change. One sentence each. If you cannot, you have a number rather than a plan, and it will not survive February.
- Check it against capacity, not enthusiasm. Divide the target by your current revenue per head, then ask whether that headcount, on that recruitment timetable, is something you have ever actually achieved.
- Recalibrate at ninety days. If the team is comfortably ahead at week twelve, you set it too low. Raise it rather than banking the easy win and coasting.
The commonest mistake is raising the number instead of changing the method. If nothing about how work is won, priced or delivered is different, a bigger target is simply more pressure applied to the same machine — and the machine does not respond to pressure, it responds to being rebuilt.
Questions to ask yourself
- Out of 10, how much would this year’s target genuinely require you to change how the business works?
- What number would you hit doing absolutely nothing differently? How far above it is your actual target?
- Where are you personally coasting because the work sits comfortably inside what you can already do?
- The last time you missed a target, was the target wrong or the execution? Which answer is more comfortable for you to give?
Where this fits in coaching
Calibration runs through the planning work in our business coaching, because most owners do not have a motivation problem. They have a calibration problem, and it shows up either as a year that felt easy and changed nothing, or a year that felt brutal and changed nothing. Read it with Future Self, which is where the destination comes from, and The Formula for Change, which explains why the first step matters more than the size of the number.
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Frequently asked questions
How do I tell a stretch target from an unrealistic one?
Ask what would have to change, and count the answers. If the honest answer is nothing, the target is decoration and will be hit by drift. If the answer is everything — every hire lands, nobody leaves, no client churns, the market turns your way — it is fiction, and the team will know by March. A stretch target is one where you can name two or three specific changes on the back of an envelope: a price review, one hire, a fix to utilisation. If you cannot write them in a sentence each, you have a number rather than a plan.
Should everybody in the team have the same target?
No, and identical targets are usually a refusal to judge rather than an act of fairness. The stretch band is personal: the same objective can be comfortable for your strongest salesperson and genuinely stressful for someone who joined in March. Cascade one company number by dividing by heads and you demotivate the first and frighten the second, and both are likely to miss. Set the company number in the stretch band, then set each person’s contribution against their own current capability. Two people carrying different numbers on the same team is normal once you know your people well enough to calibrate.
What if I hit my target every single year?
Then you have probably been announcing forecasts rather than setting targets. If a number genuinely sits in the stretch band, you should miss one occasionally — that is what stretch means. A perfect record over five years usually indicates the floor is being dressed up as ambition, and the cost is invisible until a competitor who did stretch starts taking your work. Recalibrate at ninety days rather than in December: if the team is comfortably ahead at week twelve, raise the number then, instead of banking the easy win and coasting for the rest of the year.