Setting company strategy based on a revenue target: a deep dive

Setting a revenue target seems to be the go-to move for many company leaders. But is it the best way to shape strategy?

Revenue targets. You’ll find them scrawled on whiteboards, thrown about in meetings, and broadcast to shareholders with the kind of enthusiasm usually reserved for football scores. But what really goes on when companies base their entire roadmap on a figure they’ve pulled from the ether?

Let’s unpick the pros and cons of setting strategy based on a revenue target, examine why leaders do it, hear what strategy experts recommend, and consider some key takeaways for anyone thinking of taking this approach.

The allure of the magic number

Leaders are often drawn to revenue targets like moths to a flame. And it’s not hard to see why. Revenue targets provide a clear, measurable goal. There’s a certain comfort in being able to say, “We’re aiming to hit £100 million by the end of the year.” It’s tangible, precise, and can be understood by everyone from board members to interns.

But what’s really going on beneath the surface? For many leaders, setting a revenue target taps into a deep psychological need for control. In an ever-shifting world, where market forces, competitors, and global crises all play their part, having a figure to aim for gives the illusion of order amidst chaos. It’s a way of saying, “We’ve got this under control.”

Yet, as we’ll see, basing your entire strategy on this figure can be more problematic than it seems.