There are few phrases in management that have been repeated more often than “what gets measured gets managed”. It is neat, memorable and, to a point, absolutely true.
Businesses that measure nothing usually drift. Expectations become vague, accountability weakens and performance becomes a matter of opinion rather than evidence.
The problem isn’t measuring performance.
The problem is forgetting why you’re measuring it.
Too many organisations become obsessed with improving the number rather than improving what the number was supposed to represent. Somewhere along the way, the KPI stops serving the customer and starts serving itself.
It’s rather like following a sat nav that is absolutely determined to save you thirty seconds.
The dirt track through a rural farm seems like a clever shortcut until you meet a combine harvester coming the other way. Congratulations. You’ve arrived thirty seconds earlier, slightly stressed and wondering why you ever left the perfectly good A-road.
The metric was achieved.
The journey was worse.
Businesses make exactly the same mistake.
When the KPI Becomes the Goal
Every KPI begins life with good intentions.
It exists because somebody wants to understand whether the organisation is moving in the right direction. That’s sensible. Good leaders should measure performance.
Problems begin when people forget that a KPI is only ever an indicator.
Once a measure becomes the objective itself, behaviour changes. Employees quite rationally optimise whatever they’re rewarded for. The organisation starts chasing the scoreboard instead of the outcome.
Take Amazon, for example.
If I’m told that my parcel will arrive on Thursday, I’ll organise my week around Thursday. Perhaps I’ll work from home, postpone an appointment or ask somebody else to be available.
So why does it so often arrive on Wednesday?
From the customer’s perspective, nothing has improved. In fact, it may have become less convenient.
Somewhere inside the Amazon organisation, though, somebody is probably delighted.
- Another parcel delivered ahead of schedule.
- Another service target exceeded.
- Another reassuring green tick.
The trouble is, I never asked for Wednesday.
That distinction matters because customers generally value certainty more than premature enthusiasm. They asked for reliability, not an opportunity for the business to congratulate itself.
It is a small example, but it illustrates a much broader organisational habit.
Why Good KPIs Can Produce Bad Behaviour
The Amazon example isn’t unusual. It’s happening in businesses everywhere.
Call centres measure average handling time, so advisers become experts at ending conversations quickly rather than solving problems properly.
Sales teams are rewarded for opening new accounts, so existing customers quietly receive less attention.
Maintenance departments are judged on response times, so temporary fixes become preferable to addressing the underlying cause.
None of these KPIs is inherently wrong.
- Response times matter.
- Sales growth matters.
- Efficiency matters.
The problem is assuming that improving the measure automatically improves the business.
It often doesn’t.
One of the most revealing questions a leader can ask is not, “Has the KPI improved?”
It’s, “What behaviour did we just encourage?”
That question exposes unintended consequences remarkably quickly.
I’ve worked with businesses where almost every department could demonstrate improving KPIs while the organisation itself was becoming less effective. Customers were leaving, margins were shrinking and operational frustration was steadily increasing.
Nobody had manipulated the figures.
Nobody had lied.
Everyone had simply become very good at succeeding according to their own scoreboard.
Collectively, however, the business was losing.
Customers Don’t Care About Your Dashboard
This isn’t an argument against KPIs. Quite the opposite.
Well-designed performance measures remain one of the most valuable tools available to leaders. Without them, businesses become reliant on instinct, anecdotes and optimism, none of which is an effective management system.
The answer is to remember what KPIs actually are.
The clue is in the name: They are indicators.
Indicators point towards something more important. They are the dashboard warning light, not the engine. Sensible drivers don’t celebrate because a warning light has switched off. They want confidence that the underlying problem has genuinely been resolved.
Business leaders should think about KPIs in exactly the same way.
Every measure should have a clear line of sight to customer value, commercial performance or organisational health. If that connection becomes blurred, the metric should be questioned, refined or, if necessary, discarded altogether.
It is also worth remembering that numbers rarely tell the whole story. They explain what happened remarkably well. They are often much less helpful at explaining why.
That still requires leaders to leave the dashboard, spend time with customers, observe operations, listen to employees and exercise judgement. No spreadsheet has yet replaced curiosity.
Perhaps the simplest test of any KPI is also the most revealing.
Imagine removing the measure tomorrow.
Would the underlying behaviour still matter?
If the answer is yes, you have probably identified something genuinely valuable.
If the answer is no, there is every chance the organisation has become busy serving its own reporting system.
Because businesses do not create value by producing beautiful dashboards.
They create value by solving problems for customers.
And the best KPIs never allow leaders to forget the difference.
About Gerald Price
Gerald Price is a business change consultant and interim managing director specialising in business turnarounds, operational improvement and commercial performance, especially within the waste and recycling industry. Having worked with operators across the sector, he regularly writes about leadership, strategy, waste policy and the commercial realities facing UK waste businesses.
More articles and insights can be found at www.gpcp.co.uk and https://www.linkedin.com/in/geraldprice/
