IN business, we often say: “What gets measured gets managed.”
Metrics are meant to guide performance, align teams, and drive growth.
Yet across many organisations, metrics are doing more harm than good by encouraging the wrong behaviours, such as siloed decision-making or outcomes that look good on dashboards but fail the business.
When metrics reward local optimisation over enterprise performance
This occurs when a function improves its own metrics while disregarding upstream or downstream impacts.
The behaviour is rational: people respond to what they are measured and rewarded for.
It follows that metrics create targets, and naturally, team members work hard to achieve them — even if doing so deviates from the organisation’s vision and mission.
This problem is systemic.
For example, a manufacturing value stream might maximise output to meet efficiency targets while inventory piles up and cash flow deteriorates.
Departments or silos focus solely on their key performance indicators, making decisions in isolation.
When metrics emphasise activity over impact
Activity is visible, measurable and easy to reward.
Yet business leaders increasingly confront the sobering reality that high activity does not necessarily translate into high impact.
Activity-based metrics are appealing because they offer clarity and control.
They answer simple questions: How much did we do? How busy is the team? How fast are we producing?
These metrics are not inherently wrong, but when they dominate performance evaluation, they can become dangerously misleading.
Gaming the system
This begins when employees realise that meeting the metric matters more than achieving the underlying goal.
Every employee or function wants to be seen as performing well; as a result, they may manipulate data — for example, inflating sales figures to look good — leading to distorted outcomes and poor business performance, such as underperformance once targets are met.
Goodhart’s law in business states that “when a measure becomes a target, it ceases to be a good measure.”
Employees will manipulate metrics to hit the number rather than achieve the genuine goal the metric was meant to track.
This poses serious consequences for the organisation, distorting results and prioritising quantity over quality.
Moreover, over-reliance on key performance indicators shows how fixating on a specific number can render the metric useless, causing organisations to miss strategic objectives.
The absence of context and leadership oversight
Metrics are abstracts of reality, not reality itself.
A single number rarely captures the conditions, constraints, or tradeoffs behind it.
In most organizations, metrics are viewed in isolation, stripped of operational, market or human context.
Quantitative metrics often lack the depth to capture distinctions in areas such as leadership effectiveness and employee well-being, and require qualitative insights for a complete picture.
Moreover, leaders who do not consider the unique challenges and environment of their business may fail to respond strategically.
A laissez-faire leadership approach without proper oversight can lead to weaker corporate governance and internal control systems.
How can leaders fix this?
Connect metrics to purpose
Metrics are most powerful when teams understand why they matter.
When disconnected from purpose, metrics feel arbitrary, transactional and easy to discard or game.
When connected to purpose, they lead to better decisions and shared commitment.
Balance leading and lagging indicators
This requires a deliberate balance between confirming outcomes and signalling future performance.
Lagging indicators measure results after they occur, answering the question: What did we achieve?
Leading indicators measure the drivers of results, answering: What influences future outcomes?
Review behaviours, not just results
High-performing organisations use metrics to assess how results are achieved, not just what was achieved.
When metrics are used to review behaviours as well as results, organisations build trust, resilience and sustainable performance.
Effective leaders understand that numbers alone do not define success; the way success is achieved defines the organisation.
- Innocent Hadebe, with 25 years of experience and credentials as a John Maxwell certified business coach, serves as a trusted executive advisor through Innocent Leadership Group (ILG), empowering global leaders to think boldly, lead transformational change and turn operational complexity into measurable success
