The Problem With Targets That Don't Tell the Truth

A target that the team knows is disconnected from reality does not motivate. It teaches people that the numbers are not serious, and neither is the leadership behind them.

Numbers matter in commercial organisations. They provide direction, enable comparison, and make accountability possible. Without them, you are managing by feel, and managing by feel does not scale. But not all numbers are honest. And dishonest numbers are worse than no numbers at all.

The problem is not confined to individual organisations. It is structural. Research shows that 70 to 78 percent of strategic initiatives fail to achieve their intended outcomes, and poor measurement is one of the consistent contributors. HBR's research on strategic misalignment estimates that it wastes up to 60 percent of a company's resources. A significant portion of that waste is not strategic failure. It is measurement failure: organisations chasing numbers that do not reflect what actually drives performance.

Related operating context: Why Execution Fails Between the Boardroom and the Branch – The Meeting That Changes Nothing – Why Accountability Is a Gift, Not a Threat.

The vanity metric problem

A vanity metric is a number that looks like performance but does not indicate it. High social media followers. Enquiry volumes without conversion rates. Units sold without profitability attached. Revenue without margin.

Vanity metrics appear in business reviews everywhere. They get reported because they are easy to measure, because they trend in the right direction, or because the organisation has become attached to tracking them. But they can be improving while the underlying business is deteriorating. And when that divergence eventually surfaces, it surfaces as a crisis rather than as a trend, because the measurement system was not designed to show the real picture.

The problem is not just analytical. It is cultural. When people see leadership celebrating metrics that do not reflect real performance, they learn that the organisation is not serious about genuine performance. And they act accordingly. Gallup's research on engagement shows that when employees lose confidence in the honesty and competence of leadership, engagement drops. Global engagement already sits at just 21 percent. Dishonest measurement accelerates the departure from that already-low baseline.

The aspirational target problem

A different and more common problem is the target that is set at an aspirational level and then not adjusted when conditions change.

This happens in budgeting cycles, in sales planning, in operational target-setting. A number gets agreed in a room, often based on what leadership wants rather than what the data supports. It goes into the system. And then the organisation spends months measuring itself against a number it had no realistic chance of hitting.

Teams in this situation do not work harder to close the gap. They learn to manage the gap: to explain it, to contextualise it, to present it in a way that minimises accountability. They learn that the number is not real, and that the real question is whether you can tell a convincing story about why you missed it.

This is a profound corruption of the performance management process. The target, which is supposed to sharpen focus and drive effort, becomes a bureaucratic exercise in narrative management. McKinsey's research on strategy execution consistently identifies the absence of realistic, grounded performance metrics as one of the primary mechanisms through which execution fails. When the number is not credible, neither is the accountability system built around it.

The PwC Trust Survey 2024 found that 61 percent of employees say a lack of trust from leadership directly impacts their ability to do their jobs. Aspirational targets that everyone knows are disconnected from reality are one of the most reliable ways to erode that trust. They signal that the people setting the targets either do not understand the operational reality or do not care about it.

What honest targets look like

Honest targets are grounded in the data that exists, not the aspiration of what leadership wants.

They are built from the bottom up, not the top down. Shaped by what the market, the team, and the current operational reality can actually support, with stretch built in deliberately and transparently. The stretch is real, but it is anchored in an honest assessment of where performance actually is and what improvement is genuinely achievable.

They are adjusted when conditions change materially. Not every quarter as an excuse to lower the bar, but when something genuinely structural shifts, a market contraction, a supply constraint, a competitive change, the target should reflect reality. An organisation that refuses to adjust targets when the operating environment changes fundamentally is not holding the line on standards. It is teaching its people that the measurement system is disconnected from the real world.

And they measure what matters. Not just revenue, but the indicators that lead to revenue. Pipeline quality. Conversion ratios. Customer retention rates. These are the numbers that tell you whether performance is being built or eroded, before it shows up in the final line. Research on sales performance shows that coaching focused on conversion rates at specific pipeline stages, rather than on activity volume, produces 28 percent higher win rates. The difference is that conversion rate measurement reflects what is actually happening in the sales process. Activity volume measurement reflects what people are doing. The two are not the same.

Leading indicators versus lagging ones

The most common failure in performance measurement is the overweight given to lagging indicators.

Revenue is a lagging indicator. It tells you what happened. It does not tell you what is about to happen or why the current trend exists. By the time a revenue problem shows up in the monthly report, it has usually been building for weeks or months in the pipeline, the conversion ratios, the customer retention data, the team capability metrics.

Organisations that build their performance management around leading indicators can intervene when there is still time to change the outcome. Organisations that rely primarily on lagging indicators are always responding to history. McKinsey's research on organisations that lose 20 to 30 percent of potential returns through poor operating model alignment consistently identifies late detection of performance problems as a central contributor. The numbers were there. They just were not the numbers that were being watched.

The leadership obligation

Setting honest targets is a leadership act, not a financial one.

It requires the courage to say: this is what is genuinely achievable, with effort, in the current environment. Not what we wish were achievable, not what would make the board comfortable, not what we hit three years ago in different conditions.

It also requires the discipline to hold those targets seriously, to use them as the actual basis for performance conversations, not as a background document that gets reviewed twice a year and forgotten.

Teams follow the lead of their leaders on this. If leadership treats numbers as real, teams treat numbers as real. If leadership treats them as negotiable fictions, the same lesson is learned. And it is very difficult to unlearn.

An organisation where the numbers are honest is an organisation where performance conversations are also honest, where problems surface early, and where the people closest to the work trust that what gets measured is what actually matters. That trust is not incidental. It is the foundation on which everything else in performance management depends.

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Sources

• McKinsey and Company: Strategy execution and operating model alignment research.
• Harvard Business Review: Strategic misalignment and resource waste research.
• Gallup: Global employee engagement data.