Every January, CEOs set ambitious goals. They gather at retreats with their executive team and come up with entirely unique goals. I’ll use a few common examples I’ve personally experienced – from $5M to $1B companies – to illustrate my points below:
“Increase revenue 30%.”
“Improve employee engagement by 15%.”
“Increase NPS to 50”
“Execute product launches 20% faster.”
The CEO presents them confidently. Leadership nods. They cascade into OKRs. Employees update dashboards. Slack fills with optimism.
By April, execution is uneven.
By July, priorities have drifted to the shores of status quo.
By October, the goals are quietly revised or rationalized. PIPs rumble through the organization.
By December, everyone agrees the goals were “directionally right” but unrealistic given the year.
This cycle repeats so often that failure itself becomes normalized.
The problem is not effort.
The problem is how goals are conceived.
How CEOs Typically Set Goals
Most CEOs set goals using one of three approaches.
1. Goals as Numeric Targets
Revenue. Headcount. Market share.
These goals are easy to measure and easy to defend to a board. They are also emotionally inert, therefore they narrow staff attention to outcomes. But numbers do not guide people on who they need to be become in order to achieve these outcomes. Managers translate lofty targets into pressure. Employees respond by negotiating, optimizing locally, gaming metrics, or blaming unclear instructions. Fear replaces true ownership. Respect is lost. Culture becomes competitive instead of cooperative. And in the spirit of Peter Drucker – culture snacks on strategic goals all year long. Execution fails from fear-driven behavior implicitly embedded in the system to hit a new goal.
2. Goals as Aspirational Statements
“We will be best-in-class in support.”
“We will retain 95% of clients”
“We will execute faster across all departments.”
These statements sound motivating, but they do not change how work is done. They express intent without specifying what decisions, behaviors, or tradeoffs must change as a result.
Because nothing concrete is defined, each function fills in the gaps for itself. Product interprets “execute faster” as shipping more. Sales interprets it as pushing deals sooner. Marketing interprets it as launching campaigns earlier. No one is wrong, but no one is aligned.
Since no behavior is modeled or enforced, there is nothing to reinforce. The statements appear in decks and all-hands meetings, then quietly disappear from daily work.
With no change to decisions or incentives, energy returns to the existing way of operating. The goal fades, not because people disagreed with it, but because it never affected what they actually did.
3. Goals as Cascaded Tasks
The CEO defines objectives. Leadership breaks them into OKRs. Managers translate those OKRs into narrow, local metrics. Employees work to satisfy the metrics tied to their role.
This creates the appearance of alignment, but the original goal is fragmented into disconnected targets, to be optimized in isolation.
Because performance is evaluated locally, people prioritize what they can control and measure. When tradeoffs arise, they choose the metric over the intent behind it.
Over time, the system stops responding to the goal itself and starts responding to the measurements created in its name. Coordination breaks down. Teams succeed locally while the organization stalls globally. That means many OKR targets are hit and the company still misses its goal.
Execution suffers not because people ignore the goal, but because cascading it converted intent into competing incentives.
Why Goals Do Not Stick in Company Culture
Goals fail for structural reasons because the system they are placed into is not designed to support them. Effort increases, intent is clear, but the underlying mechanics of decision-making, incentives, and authority remain unchanged.
Goals Bypass Identity
People do not change behavior just because a goal exists. People change behavior when a goal fits how they see themselves and how they believe success is achieved.
When a goal conflicts with identity, people comply outwardly and resist inwardly. They follow the letter of the goal while preserving the behaviors that have kept them successful and safe.
Example.
A company may declare a goal to “move faster,” but if promotions, praise, and credibility have historically gone to those who avoid mistakes and maintain polish, the real identity remains being “risk-averse”. Under pressure, people revert to caution, escalation, and over-analysis.
The stated goal fails because it never became part of who the organization believes it is.
Goals Ignore Internal Conflict
Inside every organization are competing priorities, fears, and incentives. Leaders want growth and stability. Managers want clarity and protection. Employees want autonomy and safety. These needs can coexist, but they pull in different directions when pressure rises.
Traditional goals assume these tensions will resolve themselves. They declare a shared outcome without addressing what each group risks by pursuing it.
Example.
CEO announces a goal to “move faster.” In the meeting, everyone agrees. No one objects. Afterward, managers keep extra reviews in place to avoid mistakes. Employees escalate decisions instead of owning them. Teams move cautiously to protect their metrics and roles.
Publicly, the goal was accepted. Privately, the system made speed impossible.
Goals Are Detached from Real Decision-Making
Most goals live in documents. Decisions live in meetings. When goals do not change how tradeoffs are made in those meetings, they have no effect on behavior.
Example.
A company goal states customer retention is a priority. In a planning meeting, the team must choose between fixing a reliability issue or shipping a feature tied to a big sales deal. They choose the feature to protect the revenue number.
Under pressure, people fall back on familiar decision patterns, and the organization returns to the status quo precisely when it matters most.
Goals Are Treated as Outcomes, Not Constraints
CEOs often define what they want without defining what they will no longer tolerate. When CEOs define goals without setting boundaries on time, attention or capacity, teams try to do everything at once. No work is stopped, tradeoffs are avoided, and capacity is silently exceeded. The system becomes overloaded, and effort increases without progress.
Example.
A CEO says growth, reliability, and innovation all matter this year. No projects are cut. Teams stretch to deliver everything. Deadlines slip, quality drops, and people burn out.
Nothing changed because no constraints were introduced. The reward is burnout and frustration.
The Frustration Loop
When goals fail structurally, a predictable emotional loop forms.
CEOs see missed targets and conclude the organization is not stepping up. Managers feel trapped between ambitious goals and unchanged constraints. Employees experience shifting priorities and growing cynicism.
Each group reacts rationally to its position, but in isolation. CEOs push harder. Managers buffer and reinterpret. Employees disengage.
Each group blames a different layer. No one questions the goal-setting model itself.
The Principle That Changes Everything
Goals do not drive behavior.
Conditions drive behavior.
People act consistently with how they make meaning under pressure.
That means they act consistently with how decisions are rewarded, how risk is treated, and what feels safe under pressure. Meaning is not abstract. It is shaped by incentives, authority, and past consequences.
When pressure rises, people don’t consider the company goals. They follow the rules the system has taught them through experience.
Effective company goals change how decisions are made, who has authority, and who owns the outcome.
An Effective Way to Set Company Goals
The CEOs who break the cycle do something fundamentally different. They stop asking, “What should we achieve?” and start asking, “Who must we become for this goal to be inevitable?”
Step 1: Start With the Truth, Not the Vision
Before setting goals, the CEO surfaces the unspoken realities of the organization.
Where do decisions stall?
Where is accountability diffused?
Where does fear masquerade as professionalism?
Where do incentives quietly contradict stated values?
This requires restraint from fixing too quickly, defending past decisions, or softening the truth to keep things comfortable. The tradeoff is discomfort now versus failure later.
Until these truths are named, goals are fantasy.
Step 2: Define the Few Conditions That Matter
When too many goals exist, teams decide for themselves which ones matter in the moment. That creates inconsistency, politics, and slow execution.
Instead of many objectives, effective CEOs define a small number of non-negotiable conditions that govern how work gets done.
Examples:
Decisions are made with full ownership, not consensus. For any decision within a defined threshold, one person owns the call. Input is welcome. Agreement is not required. Once the decision is made, it is final unless materially new information appears.
Information flows directly to decision-makers, not through hierarchy. Customer data, risks, and failures are surfaced directly to the people who can act. Information is not summarized, softened, or delayed to protect layers of management.
Leaders trade personal comfort for organizational clarity. Leaders address conflict early, make unpopular calls when needed, and remove ambiguity even when it creates discomfort.
These are not slogans. They are constraints on behavior.
Step 3: Translate Conditions Into Observable Behavior
Each condition is translated into specific, visible changes in how work happens.
What meetings change?
What decisions move faster?
What behavior is no longer acceptable, even if results are good?
Examples:
If decisions are made with full ownership:
Which decisions are final unless materially new information appears?
Who owns those decisions and is expected to explain them when outcomes are poor?
If information flows directly to decision-makers:
What information now bypasses layers of management?
How quickly is it expected to reach someone who can act?
If leaders trade personal comfort for clarity:
Which conversations happen sooner instead of being deferred?
What behavior is no longer acceptable, even if short-term results look good?
Step 4: Model the Cost Personally
New conditions may ask people to take risks they were previously punished for taking. If the CEO does not publicly take those risks first, the organization will not believe the conditions are real. That risk is rarely financial. It shows up as reduced control, greater exposure, or delayed personal wins.
Who will the CEO become so that their organization thrives as it progresses towards those goals?
Examples:
Reduced control The CEO stops acting as the final decision-maker on product calls and lets an executive own the outcome, even when the decision is uncomfortable.
Increased exposure The CEO openly names a failed decision they made and explains the reasoning, without blame, signaling that mistakes are discussable rather than punishable.
Delayed personal wins The CEO supports a long-term product fix over a short-term revenue boost, even though it weakens a quarter’s narrative.
When the CEO takes that cost first, fear drops. Ownership rises. Authority stops enforcing compliance and starts making it safe to decide.
Step 5: Let Outcomes Emerge
When conditions are stable, outcomes follow. You cannot force growth through pressure any more than you can PIP a tree into growing faster. Pressure may increase activity, but it does not change what the system can produce.
Growth becomes inevitable only when the conditions that produce it are in place.
When decisions are clear and owned, teams stop revisiting the same issues and move forward faster. For example, a product decision made once and held allows Sales, Marketing, and Customer Success to align instead of hedging or constantly revisiting.
When behavior is healthy and consistent, culture strengthens. People stop guessing what is safe and start acting with confidence because expectations do not change week to week.
When ownership is real, execution accelerates. Work does not stall in review cycles or escalation loops. Problems surface earlier and get resolved by the people closest to them.
At that point, the goal is no longer chased. It emerges as a byproduct of a system designed to produce it.
A Goal Barometer
A company goal is well-set if the answer to this question is clear:
“When pressure hits, what will we do differently without needing to be reminded?”
If the answer is vague, the goal will fail.
If the answer is embodied, the goal will stick.
That is how effective company goals are set in a way that actually works. Of course, every company is unique and their goal setting must be unique. The examples provided are universal enough to drive the point but it is important to treat each company as its own – the goal setting methodology is universal, the solutions that come as a result are highly specific.
And if you need someone to talk to, I’d welcome getting to know you.
