MTO Goals: The 3-Level Goal-Setting System That 10x'd Our Output

The Problem With Binary Goals

Traditional goal-setting has a fundamental flaw: it is binary. You either hit the number or you do not. You either achieve the goal or you fail.

This binary framing creates two equally destructive patterns:

Pattern 1: Sandbagging. Teams set conservative goals they know they can hit, because missing a goal feels like failure. The result is that the team underperforms its potential — not because they lack capability, but because the goal did not challenge them.

Pattern 2: Demoralization. Teams set ambitious goals (often because leadership demands them) and miss them by a small margin. Even though they achieved impressive results, the narrative is "we failed." Morale drops. Next quarter, the team sandbags to avoid the feeling of failure.

Both patterns are caused by the same root issue: a single target does not capture the reality of performance. Reality is a range, not a point.

What Are MTO Goals?

MTO stands for Minimum, Target, Outrageous. Instead of setting one number for each goal, you set three:

Minimum: The baseline level of acceptable performance. If you do not hit this, something went wrong and we need to understand why. This is the "floor" — the result you would be disappointed not to achieve.

Target: The expected level of performance given normal conditions and solid execution. This is what you plan for, staff for, and budget for. Hitting the Target means you executed well.

Outrageous: The stretch level that is achievable if everything goes right — if the team operates at peak performance, the market cooperates, and opportunities materialize. This is not a fantasy number. It is the top end of what is realistically possible.

An Example

Traditional goal: "Achieve €500,000 in Q1 revenue."

What happens if you hit €480,000? Technically, you missed the goal. But is that really a failure? What if market conditions were tough and €480,000 was exceptional given the circumstances?

What happens if you hit €500,001? You "achieved" the goal. But what if you could have pushed to €600,000 with more effort? The goal gave you permission to stop.

MTO goal: "Q1 Revenue: Minimum €400,000 / Target €500,000 / Outrageous €650,000"

Now the conversation changes:

• €480,000 is clearly above Minimum and close to Target — solid performance
• €500,000 hits the Target — good execution
• €550,000 exceeds Target — great quarter, and the team has visibility on what "Outrageous" looks like
• €650,000 is Outrageous — exceptional performance worth celebrating

The range creates nuance. It acknowledges that performance is not binary. It motivates at every level.

Why MTO Works: The Psychology

MTO goals work because they align with three psychological principles:

Principle 1: Progress Motivation

Research by Teresa Amabile at Harvard Business School found that the single most motivating factor at work is making progress on meaningful work. MTO goals create more opportunities for people to experience progress:

• Hitting Minimum is progress
• Moving from Minimum toward Target is progress
• Exceeding Target is progress
• Approaching Outrageous is progress

With binary goals, you only experience progress at one point: the moment you hit the goal. With MTO, progress is continuous.

Principle 2: Goldilocks Motivation

People are most motivated when goals are challenging but achievable — not too easy (boring) and not too hard (demoralizing). This is called the Goldilocks zone.

The problem with a single target is that it is only in the Goldilocks zone for a narrow range of circumstances. If conditions are tough, the Target feels impossible (demoralizing). If conditions are great, the Target feels too easy (boring).

MTO automatically adjusts: when conditions are tough, the team focuses on hitting Minimum (challenging but achievable). When conditions are great, the team pushes for Outrageous (challenging but achievable). The Goldilocks zone expands to cover all conditions.

Principle 3: Loss Aversion

Behavioral economics shows that people feel losses roughly 2x more intensely than equivalent gains (Kahneman & Tversky). Missing a binary goal feels like a loss. MTO reduces loss aversion by reframing: "We did not miss the goal. We hit Minimum and got 80% of the way to Target."

This is not about lowering standards. It is about creating a psychological environment where people push harder — because the cost of falling slightly short is progress, not failure.

Setting MTO Goals for Tech Companies

MTO for SaaS Metrics

MTO for AI Product Teams

MTO for Engineering Teams

How to Set the Right Levels

The most common question about MTO is: "How do I set the right numbers for each level?" Here is a framework:

Setting Minimum

Minimum = Last period's performance minus a small buffer.

The Minimum should be achievable even in tough conditions. If the team cannot hit Minimum, it signals a systemic problem — not just a bad quarter.

Guidelines:

• If last quarter's result was 100, Minimum might be 85-90
• Minimum should be achievable 90% of the time
• If the team misses Minimum, it triggers a root cause investigation

Setting Target

Target = Realistic stretch based on current trajectory and planned investments.

This is the most important number. It should require solid execution but not heroics.

Guidelines:

• Target should represent 10-25% improvement over the prior period (for growth-stage companies)
• Target should be achievable 50-60% of the time
• This is the number you plan resources around

Setting Outrageous

Outrageous = What happens if everything goes right AND the team operates at peak.

Outrageous is not a fantasy. It is the top of the realistic range.

Guidelines:

• Outrageous should be 30-50% above Target
• Outrageous should be achievable 10-20% of the time
• Hitting Outrageous should trigger team celebration and recognition

The MTO Review Cadence

MTO goals are most effective with a regular review rhythm:

Weekly: Check-in (15 minutes)

Where are we tracking relative to MTO? If we are below Minimum trajectory, what needs to change this week?

Monthly: Course correction (60 minutes)

Are we on track for Target? What obstacles are blocking us? Do we need to adjust tactics (not the goals — the approach)?

Quarterly: Full review (Half day)

How did we perform against all three levels? What did we learn? Set new MTO goals for next quarter.

The Quarterly Scoring System

At the end of each quarter, score each MTO goal:

• Below Minimum: Score 0. Root cause investigation required.
• At Minimum: Score 1. Acceptable but not where we want to be.
• Between Minimum and Target: Score 2. Solid performance.
• At Target: Score 3. Good execution.
• Between Target and Outrageous: Score 4. Excellent performance.
• At or above Outrageous: Score 5. Exceptional. Celebrate loudly.

Average the scores across all goals. The team's quarterly performance score is a nuanced picture of how they did — much more useful than a binary "hit or miss."

Common MTO Mistakes

Mistake 1: Setting Minimum too high. If your Minimum is essentially your old Target, you have not changed anything — you have just given it a new name. Minimum should be genuinely the floor of acceptable performance.

Mistake 2: Setting Outrageous as unreachable. If the team never hits Outrageous (say, 0 times in 8 quarters), it stops being motivating and becomes a joke. Outrageous should be hit roughly once every 5-8 quarters.

Mistake 3: Only celebrating Target and Outrageous. Recognize progress at every level. Someone who moves from below Minimum to above Minimum has grown. Celebrate that growth, not just the top-end results.

Mistake 4: Changing the goals mid-quarter. MTO goals are set at the beginning of the quarter and do not change. If conditions change dramatically, note it and adjust next quarter — but do not move the goalposts mid-game.

How Hyperion Consulting Implements MTO

At Hyperion Consulting, we help tech companies implement MTO goal-setting as part of our strategic planning and operational excellence services. We facilitate the goal-setting workshops, build the tracking systems, and coach leadership teams through the first few quarterly cycles until MTO becomes second nature.

Ready to replace binary goals with a system that actually motivates performance? Book a free consultation to discuss implementing MTO in your organization.