The 3 Hidden Pitfalls of Metrics: How Numbers Can Derail Your Strategy

Have you ever attended a strategy presentation full of metrics and walked away thinking, “This team has a well-thought-out plan”? Then, in the very next meeting, another team presents their own set of business metrics with their own set of plans to achieve them, and suddenly you realize something’s off—aren’t these metrics overlapping or even interdependent? You can’t help but wonder: Are these teams working toward the same goal, or are they pulling in different directions?

In my previous article, "Your Metrics Need a Strategy" I emphasized the importance of ensuring that metrics align with long-term objectives. But even when they’re well-meaning, metrics often come with their own set of challenges—fostering silos, encouraging teams to chase numbers instead of focusing on real business outcomes.

In this article, I’ll dive into three key problems that arise when metrics dominate the narrative, and explore how to address these pitfalls to realign metrics with true business success.

1. Metrics Can Create Silos

In today's increasingly data-driven corporate culture, metrics are often assigned to specific teams to foster accountability. Each team becomes responsible for its own KPIs, focusing on hitting targets. While this brings clarity, it can also lead to isolation—silos form when teams focus solely on their metrics, neglecting how their actions affect the broader organization.

Here’s the catch: Think of it like each team building its own island. They’re so focused on their patch of land that they forget to connect with neighboring islands. Without alignment, the company loses sight of how all efforts work together for long-term success. This often creates misalignment between teams, causing overall corporate strategy to fail.

One of the main solutions is introducing joint metrics. Joint metrics ensure that teams don’t just chase their individual KPIs but also understand how their work impacts others. These shared metrics bridge the gap between teams and create alignment across the organization. However, joint metrics can also create ambiguity, as overall success may not be attributed to a single team. Therefore, they should be carefully developed and chosen with a full understanding of dependencies—how each sub-metric, owned by different teams, contributes to the joint metric. This flexibility allows the organization to isolate and improve specific parts of the overall process when needed.

For instance, in a project I worked on with a telecommunications company, the sales team was focused on acquiring new customers, while the customer success team was responsible for customer retention and churn reduction. The sales team successfully onboarded new customers but often brought in clients who were not a great fit, which increased churn and created friction for the customer success team. To address this, we introduced a joint metric: net customer growth, which combined both customer acquisition and retention. This ensured that both teams worked together to balance quality with quantity, reducing churn and improving long-term customer satisfaction.

Joint metrics help teams work toward unified goals by connecting different departmental metrics and addressing interdependencies between KPIs.

2. Surrogation: When Metrics Replace Strategy

In the Harvard Business Review article, “Don’t Let Metrics Undermine Your Business,” Michael Harris introduces the concept of surrogation—where a metric becomes the strategy itself, rather than a tool to measure progress. Surrogation occurs when teams focus so much on hitting their numbers that they lose sight of the bigger business objectives.

One prominent example of surrogation is the Wells Fargo scandal, where employees opened millions of unauthorized bank accounts to meet aggressive sales targets. The bank’s strategy was meant to grow its customer base, but the metric of “accounts opened” became the sole focus. Employees prioritized hitting this metric, even if it meant engaging in unethical behavior, resulting in a massive scandal that damaged the company’s reputation and trust.

Another great example comes from the smartphone industry a few years ago. Many smartphone manufacturers have focused on competing over features like processing speed, battery life, or the number of cameras. While these metrics are easily measurable and look impressive on paper, they often miss the broader strategic goals of customer loyalty and user experience.

Apple, on the other hand, takes a different approach. Instead of focusing on competing in the feature race, they built a holistic ecosystem around their products. Through iCloud, Apple Pay, and services like Apple Music, they ensured that once customers entered their ecosystem, they had little reason to leave. Apple’s internal teams, spanning hardware, software, and services, are aligned around this broader strategy—delivering a seamless and integrated experience across devices. By focusing on the user experience and ecosystem, Apple avoids surrogation and keeps all teams aligned with the company’s larger vision.

Metrics should not only track progress but also inform strategic pivots. For example, in fast-moving markets, real-time data from marketing campaigns can signal when it's time to adjust product positioning or pricing. Ensuring metrics are continuously fed back into strategic discussions can enable more agile decision-making.

To avoid surrogation, regularly review KPIs in the context of long-term strategy, ensuring metrics are used to measure progress rather than dictate it.

3. Metrics Create a False Sense of Completion

Anyone who regularly tracks metrics knows the constant pressure to hit weekly, monthly, or quarterly goals. Achieving these numbers can feel like a success in itself, creating a false sense of completion. Teams often think that once they hit their targets, their work is done, leaving strategic and long-term initiatives on the back burner..

In my experience with a nonprofit sustainability organization, the leadership team was focused on meeting monthly donation targets. While they succeeded in driving short-term donations, they overlooked the importance of fostering long-term relationships with donors. When we surveyed donors, it became clear that there was a gap in appreciation and impact reporting. Donors wanted to understand how their contributions were making a difference, but the organization was too busy hitting financial targets to focus on nurturing these relationships.

The focus on hitting monthly metrics gave the team the sense that they had “completed” their job, but they missed out on strategic opportunities for donor retention.

To avoid this false sense of completion, teams must think beyond hitting immediate numbers and focus on how they can contribute to long-term, sustainable success.

Navigating Metrics to Reach Strategic Success

Navigating a company through metrics-driven performance is like flying a plane. It requires coordination between multiple roles, each focusing on their specific metrics while ensuring that the entire flight stays on course to reach the destination successfully.

1. The Pilot (Big Picture) = Strategic Objective Alignment The pilot is responsible for understanding the bigger picture—the flight path and final destination (i.e., long-term strategic goals). They ensure that all decisions and adjustments during the flight are aligned with reaching the final goal safely and efficiently. Like a pilot’s role, aligning metrics with strategic objectives ensures that every team understands the end goal and works toward it.
2. Flight Attendants (Delegated Metrics) = Prioritization of Key Metrics Flight attendants have their own responsibilities—passenger safety, comfort, and specific tasks during the flight. While they don’t focus on the plane’s altitude or speed, they handle crucial functions that contribute to a successful journey. However, they prioritize their tasks to avoid distractions from the main objective: ensuring that passengers arrive safely and comfortably. Each team should focus on a small set of high-priority metrics, just like attendants focus on key tasks that enhance the overall passenger experience.
3. Control Tower (Joint Metrics) = Cross-Functional Metrics and Coordination The control tower coordinates with the pilot and other planes in the sky. It provides critical information that helps the pilot and flight attendants adjust based on weather, other flights, and airport schedules. The control tower’s view ensures that everyone is working together to maintain safety, efficiency, and coordination. Joint metrics work like the control tower, helping teams collaborate and see how their efforts influence the company’s overall performance, just as the control tower helps align different planes for a smooth operation.
4. Post-Flight Review (Reflective Feedback) = Learning and Feedback I was told that during training, every flight, pilots, attendants, and ground staff review how the flight went—were there turbulence issues, customer complaints, or delays? This post-flight review helps teams learn from each journey to improve the next one. This reflection ensures that metrics aren’t just about hitting targets but also about improving the process. Creating a culture of feedback is like a post-flight review—teams use metrics not just to hit short-term goals, but to learn and grow from each “flight” for long-term improvement.

Metrics Are Tools, Not the End Goal

Just like grades in school, metrics in business are only part of the story. They help guide and measure success, but they don’t capture the full picture. When teams focus solely on metrics, it creates silos, promotes short-term thinking, and leads to tunnel vision of the full potential. Metrics must be seen as tools that support—not replace—strategy.

As discussed, issues like surrogation and misalignment arise when metrics take precedence over long-term goals. Businesses, like students, often chase short-term wins without considering the bigger picture. To avoid this, teams need joint metrics and alignment across departments to ensure they work toward shared objectives.

Think of your business as a plane. Metrics are the instruments guiding you, but it’s the overall strategy that ensures you stay on course to your destination. With the right balance between metrics and vision, your team can soar toward greater alignment, innovation, and long-term success. Measure what matters, but always aim for the bigger future ahead.

#Metrics #BusinessStrategy #KPIs #CrossFunctionalCollaboration #Leadership #Silos #StrategicAlignment #DataDrivenDecisions #LongTermSuccess #OperationalExcellence #PerformanceManagement #JointMetrics #StrategicPitfalls

References:

1. "Don’t Let Metrics Undermine Your Business", Michael Harris, Harvard Business Review Read more
2. "Metrics: Useful or Evil?" Read more
3. "CMOs and CFOs: Working Together to Measure Success Effectively", Jessica Apotheker and Leila Hamidou, BCG Read more
4. "How To Use Metrics To Drive Alignment And Accountability", Forrester Read more