A CEO once told me, with real pride, that his leadership team had hit every single one of their quarterly objectives for two years running.

He meant it as evidence of an exceptional team. I heard it as evidence that the objectives were meaningless.

Not because his people weren't good — they were. But a system where everyone hits everything, every time, is a system that has quietly optimized for something other than performance.

What a perfect record actually indicates

There are only a few ways to produce a two-year unbroken run of hitting targets, and most of them are bad.

The targets are set below capability. The most common. When missing a target has real career consequences and beating it has modest upside, every rational person negotiates for a number they're confident of. Do that across a leadership team for a few cycles and your annual plan becomes a floor everyone has already cleared before the year starts.

The targets are vague enough to always be arguable. "Improve customer experience" is never missed, because nobody can prove it wasn't achieved. Companies drift toward this language naturally, since it reduces conflict at plan-setting time. It also makes the plan useless.

Definitions move quietly during the period. The number gets restated, the scope gets adjusted, an exclusion appears. Everyone hits, and everyone knows.

Nobody is attempting anything genuinely uncertain. This is the expensive one. A company that never misses is very likely a company that isn't attempting anything it might fail at — which is fine for a utility and fatal for a company that still needs to grow.

The sandbagging problem is a design problem

I want to be careful here, because "your team is sandbagging" sounds like an accusation of bad faith, and it usually isn't one.

People set conservative targets because the incentive structure asks them to. If missing a number damages your standing, your bonus, and your team's morale — and beating it by 40% mostly just resets next year's expectation higher — then the optimal play is obvious. Your leaders aren't being dishonest. They're being rational inside a system you built.

You cannot exhort your way out of this. You have to change what missing costs.

Separating commitment from ambition

The mechanism I've seen work is separating the two things a target is being asked to do, because they're incompatible.

Commitments are numbers the business can plan against. Inventory, hiring, and cash all depend on them, so they need to be reliable, and hitting them should be the expectation. Missing a commitment is a real problem, and it should be treated as one.

Ambitions are the number if things go well and the team executes at its best. These should be missed some of the time. If a team hits every ambition, the ambitions were commitments wearing a different label.

Two numbers, two conversations, two consequences. It sounds like extra process, and it's the only version I've seen actually break the sandbagging equilibrium — because it gives people a safe place to be conservative and a separate place to be ambitious, instead of forcing both into one number that then satisfies neither purpose.

The critical part is that leadership has to genuinely not punish a missed ambition. The first time someone gets criticized for missing a stretch goal, everyone recalibrates permanently and you're back where you started, with one more layer of process.

What healthy actually looks like

In a leadership team with honest goals, I'd expect commitments hit nearly always, and ambitions hit maybe half the time. Somewhere in that range, misses are informative rather than alarming.

More importantly, I'd expect the misses to be discussed early and specifically. The health indicator isn't the hit rate — it's how fast a miss surfaces and how precisely the team can explain it.

A leader who says in week four "I'm not going to make this, here's what changed, here's what I'm doing" is worth considerably more than one who delivers a clean number every quarter and can't tell you why.

The thing to watch for

If your team hits everything, run this test: pick a target that was hit and ask the owner what would have happened if a key assumption had gone the other way.

If they can answer — "we'd have been at 80% and here's what we'd have cut" — the target was real and they were managing it.

If the honest answer is that it would have been fine regardless, you've found a target that was never actually at risk.

Do that across the plan and you'll learn quickly whether you have an exceptional team or a well-calibrated negotiation.

Most of the time it's the second one, and the good news is that's a fixable design problem rather than a people problem.