Metrics shape behavior - for better or worse. When they're aligned with business goals, they drive results. But when they're misaligned, they encourage actions that work against the very outcomes you’re trying to achieve.

Take manufacturing. If you measure one department by cost per unit, they'll do what the metric demands: run long batches to reduce setup time and lower the unit cost. But that creates excess inventory, boxes of parts no one needs yet. This clashes with the materials team, who are tasked with keeping inventory lean. So you have built in conflict.  Neither party can accept the other's position without jeopardizing their jobs.  Yet it is demonstrable that the materials management perspective is better for company finances.  I learned about this 40 years ago, and it remains all too common. 

There are other pervasive measurement driven problems.

We’ve all been on the wrong end of customer service designed to cut costs. Idiot chatbots, rushed reps, no resolution. So companies save a little money... and lose the customers they paid so much to acquire. That’s not a people problem. That’s a system problem.

Eight Varieties of Measurement Issues

Not all measurement problems are created equal. Here are eight patterns I see most often:

1. Things that are measured but shouldn’t be
   Metrics that track irrelevant or misleading indicators, just because they’re easy to count.
   Example: Number of sales calls made. It’s easy to count—but it rewards volume over effectiveness.

2. Things measured incorrectly
   The intention is right, but the method is flawed.
   Example: Manufacturing inspections with miscalibrated tools.

3. Useful metrics that get misused
   Average call time in a support center is fine for staffing. But when used to evaluate reps, it backfires. Complex cases are rushed, frustrating customers.

4. Accurate measures that are misunderstood
   A number may be correct, but its meaning isn’t. We price hospital beds by dividing the cost of the hospital over the number of beds, and think that reducing beds saves money.  In reality it just makes the remaining beds seem more expensive.

5. Things measured in isolation.
   Department-specific metrics can actually harm the company.
   Example: Sales is rewarded for top-line revenue. Sales departments close deals that increase revenue, but since they incur extra costs to the business, they actually decrease profitability

6. Measurements that create conflict.
   Isolated measures often generate friction between teams.
   Example: As noted earlier, in too many companies, manufacturing is rewarded for low unit cost—so they run large batches. But that increases inventory, putting them at odds with the materials team, which is measured on keeping inventory low.

7. Things that could be measured but aren’t
   Latent capacity, turnover trends, or systemic friction. Often the data exists—but no one’s using it.
   Example: Employee turnover can be a useful proxy for morale, but not if it’s buried in HR reports and never discussed by leadership.

8. Trying to measure things that are real but not measurable
   Ethics. Trust. Leadership quality. Trying to quantify them creates shallow proxies that risk undermining the very values they’re meant to represent.
   Example: Scoring employee loyalty on a 1–10 scale creates pressure to perform positivity rather than fostering actual trust.

Fixing the Invisible

Few leaders make irrational decisions, but the decisions they make are based on the information they have. If the information is incomplete or incorrect, the decisions are not aligned with reality.

Misaligned metrics also shape behavior, and the damage often hides in plain sight: in friction between departments, declining morale, and strategies that never quite deliver.

These are all system issues. And systems can be examined, mapped, and corrected.

The first step is visibility. Someone has to connect the dots and show how your current measurements are creating unintended consequences..

If that’s what you need, book a call.