City Shift Finance: How do you ensure financial targets remain realistic as business conditions change?
Justin D Maxwell: Most business owners set financial targets based on what they want, not what the evidence supports.
A good month becomes the new baseline; the new baseline becomes next quarter’s target. The problem is, the decision was made without context, without understanding whether or not it was repeatable.
And don’t misunderstand me; this isn’t telling business owners to not have big ambition or big targets. It’s keeping them aligned so that they reach those targets instead of just dreaming of them.
The question to solve this problem is: if we do x and y, are we ninety percent confident z will happen? If you cannot get to ninety percent confidence, you do not have a realistic target; you instead need to ask yourself, your team, and the key stakeholders: what do we need to do differently to get to ninety percent confidence? Is it more time, more training, more team?
Here is what ninety percent confidence requires: it requires that you know which activities produce which outcomes; it requires that you measure them consistently; it requires that you review them on a cadence short enough to catch when things drift before it becomes a crisis. We would recommend monthly check-ins within ninety-day cycles. When business conditions change, and they will change, the question is not, how do we protect the target? The question is, what does the evidence tell us is happening right now?
You re-anchor the target to what is demonstrably true; you ask the ninety percent question again; you adjust. Targets stay realistic when they stay connected to evidence. The moment you let ambition run ahead of what your activities can actually produce is the moment you likely stray toward financial targets that will never be reached.
City Shift Finance: What causes organizations to lose confidence in their forecasts, and how can that be prevented?
Justin D Maxwell: Organizations lose confidence in their forecasts for one reason above all others: the forecast was never connected to the activities that were supposed to produce it; they guessed.
When a projection is built on ambition rather than evidence, the first time conditions shift, and they will, the forecast falls apart. And because nobody can explain why it fell apart in specific terms, nobody trusts the next one either. That erosion of confidence is cumulative, from the C-suite to the rank and file; once a team stops believing the numbers, the numbers stop driving decisions. The first thing that has to change is what you are forecasting.
Most organizations try to project too much at once; a twelve-month budget built in November is often a goal guessed based on what the business looks like today, without accounting for what it will look like in February. The gate system solves this. A gate is a defined set of conditions that must be proven true before the organization moves to the next phase of growth or investment. You do not get to advance until the conditions of the current gate are met; no exceptions.
The gate forces the organization to prove one thing at a time instead of projecting everything at once. That shrinks the forecast to what is actually knowable. Instead of projecting the full business eighteen months out, you forecast only what has to be true to open the next gate. Those are specific, provable, falsifiable conditions; you either meet them or you don’t. And when you meet them, you have done something more valuable than hit a target: you have proven a model.
That proof is what rebuilds forecast confidence: proof that x and y actually produced z under real conditions.
City Shift Finance: How should executive incentives support better financial planning and decision-making?
Justin D Maxwell: The reward has to be tied to the outcome that moved the business forward, and it has to mean something to the person receiving it: a personal stake in where the business is going long term, and milestone rewards close enough to feel attainable right now. When both are in place, executives stop treating the financial plan like a document they review in a meeting; they start treating it like a personal roadmap to what they actually want.
Most executive incentive structures are built on an assumption that often turns out to be wrong: the assumption is that people are motivated by the company winning. More often than not, they aren’t; people are motivated by what the company winning means for them personally.
You can tie compensation to EBITDA, to revenue growth, to margin improvement; but if the executive sitting across from you cannot connect that structure to something that actually matters in their life, it is just numbers on a page. And people do not make better decisions for numbers; they make better decisions for outcomes they can see themselves winning in. The first thing that has to change is how you find out what your executives actually want; not what you assume they want, what they actually want.
You sit down with each person and ask: what does winning look like in your life? One person wants the dream house; another wants time freedom; another wants generational wealth; another wants to be a present parent. Those are not compensation conversations; they are commitment conversations. And when you tie the business outcomes to those personal outcomes, something changes in how people plan and decide.
City Shift Finance: How do you maintain consistent planning across departments as the organization grows?
Justin D Maxwell: The reason planning breaks down as organizations grow, in my experience, is not complexity; it is disconnection
The vision lives in the head of the founder, but if you asked anyone else in the company, you would get a different answer for every person you talked to. And as such, the priorities get interpreted differently by every department, the standard for what good looks like changes depending on who you talk to. And by the time a decision reaches the people doing the actual work, it barely resembles what leadership intended.
Consistent planning across departments requires one thing: a system that starts at the top and scales all the way down without losing its shape. We call it the Five Keys. It starts with a vision that, no matter who you ask, everyone gives the same answer. This is not a mission statement; it is a specific visionary destination. Where is this business going, by when, and what does it need to look like when it gets there? When that is clear, every department has a reference point for every decision they make.
From there, priorities are set on ninety-day cycles, not just at the leadership level, but inside each department. Sales asks: what do we have to accomplish this quarter to hit the sales target that moves us toward the vision? Operations asks the same question for operations. The priorities cascade down; each department is pulling toward the same destination from their own lane.
Then you define what good looks like in every role; not general and vague, specific. This is the standard; this is what good behavior, good output, and good decision-making looks like in your specific seat. When people know that standard, they stop guessing, and you stop having so much variability between employees. And when they fall short, you have something to intervene against rather than just a feeling that things are off.
