The Rubber Band.

Stretch a rubber band between two fingers and it pulls. The Rubber Band applies that to a business: the distance between where you are today and where you have said you are going is what generates movement.

The tension always resolves, in one of three directions, and only one of them is the outcome you want.

What is the Rubber Band model?

It is often taught as structural tension, and Robert Fritz set it out most clearly. One end of the band is your vision: a specific description of the business you have said you are building, with numbers and a date on it. The other end is current reality: what is true today, in numbers, with the commentary removed.

Both ends have to be held at the same time and both have to be accurate. Goal setting asks you to write only the top end; this model also asks you to write the bottom one.

The three ways the tension resolves

1. Reality rises to meet the vision

The business changes until it matches the description. A hire is made, a price moves, a process gets built, a customer concentration comes down. It is the only one of the three that requires anything to happen.

2. The vision quietly drops

The goal comes down to meet where you already are. Nobody announces it; the three-year target stops being mentioned, and a year later the ambition is a version of last year.

3. Reality bends instead

The gap gets closed by changing what you believe about today rather than what is true about today: run-rates quoted from the best month, turnover talked about instead of margin, two good weeks treated as a trend.

Options two and three both feel like relief, and both remove the reason for anything to change.

Why it matters when you own the business

You are the only person who holds both ends. An employee is handed a target by somebody else; you write your own, and you are also the person who gets to quietly revise it. There is nobody above you to notice that the number you talk about in August is smaller than the one you wrote in January.

Owners lose the tension in three ordinary ways. Some let go of reality: the management accounts stop being opened, the complaint gets avoided, nobody checks what the last five jobs made. Others let go of the vision: every hour goes on today's fire, and the answer to where the business is going is a version of onwards.

Another failure is holding both ends but never at the same time. The vision comes out once a year at a planning day. Reality is checked on the other 364. They never meet, so no tension is generated.

What sizing the gap looks like

This illustration uses round numbers rather than a client. A trades business turns over £600,000 and the owner says they want a £1.5m business inside three years. That is the top peg.

The bottom peg: net margin is 6 per cent, so £36,000 of profit. The owner personally does around 90 per cent of the quoting. One customer is a third of turnover. There have been no management accounts since October.

The gap is more than a marketing gap. Getting to £1.5m at a 12 per cent net margin means £180,000 of profit, roughly £900,000 of additional revenue, something like three more crews, somebody estimating who is not the owner, an extra chunk of management overhead to carry it, and enough working capital to fund wages and materials before customers pay. That converts into moves with dates on them.

How much tension is useful?

A vision so distant that no first step is visible produces avoidance, which often looks like being busy with something else.

Test it: can you name what the next ninety days require, specifically? If yes, the tension is working. If you would not know where to start, the band is too long and you need an interim peg — a twelve-month position that is a real stretch from today and on the route to the longer picture.

Tension is a gap between two facts; anxiety is emotional. You can hold a large gap perfectly calmly, and plenty of owners feel enormous anxiety about a business with no gap in it at all.

How to use it this week

Put both ends on one page

Write the vision in numbers with a date at the top, and current reality in numbers, as of today, at the bottom. Keep the page somewhere you will see it.

Write the bottom end accurately

Write five facts about the business you would rather not write down. If nothing on the list is uncomfortable, you have written the version you show other people.

Check which end moved in the last twelve months

If the answer is the vision, you have had resolution two.

Set an interim peg at ninety days

Set one number, one date and one person who owns it, close enough that the first step is obvious.

Say both ends out loud to one person

Tell someone who will ask you about it in three months, because a target you have only thought about can be quietly revised.

Diarise a monthly ten-minute re-read

Re-read the page each month and ask which end moved.

Questions to ask yourself

• Out of ten, how accurately is your current reality written down anywhere, in numbers, today?
• Over the last year, which end of your band moved — and who decided that?
• What goal have you stopped mentioning without ever formally abandoning it?
• If somebody read only your numbers, with none of your commentary, what business would they conclude you were building?
• Is the vision at the top of your page one you want, or one a business of your size is supposed to want?

Where this connects

This is foundation material in Personal Coaching. If you want the models either side of it, The 7 Habits covers the private work that has to be in place before a vision means anything, and Scarcity vs Abundance deals with the assumption sitting underneath what you allowed yourself to write at the top of the page.