Kaplan and Norton already warned about this risk when they observed that indicators only create value when they are explicitly connected to decision-making and active strategy management. When this connection is missing, they become retrospective control mechanisms—useful for explaining the past, but largely ineffective at guiding the present.
The most common mistake in strategic management
Indicators are essential to strategic management. Even so, many organizations use them in a way that produces a paradoxical effect: more apparent control and less real decision-making capability.
The problem is not measuring performance, but the way organizations treat indicators as an end in themselves—rather than as instruments to guide everyday choices and adjustments.
Kaplan and Norton had already drawn attention to this risk by noting that indicators only create value when they are explicitly connected to decision-making and active strategy management. When this does not happen, they turn into retrospective control mechanisms—useful for explaining the past, but largely ineffective at guiding the present (The Execution Premium, Harvard Business Press).
Measuring well is not the same as managing well
Over the past decades, organizations have significantly improved their measurement capabilities. Dashboards have become more sophisticated, tools more powerful, and reports more frequent. Even so, decision-making remains slow.
This happens because many indicators focus on showing what has already happened: consolidated results, accumulated variances, or deviations that can no longer be corrected. As a result, management ends up analyzing outcomes instead of guiding decisions.
A classic survey by Harvard Business Review points precisely to this paradox: executives acknowledge that they have many indicators at their disposal, but few that are truly useful for guiding short-term decisions (Kaplan, Measuring Performance).
When this happens, management inevitably becomes retrospective.
Indicators stop supporting execution when they explain the past but fail to guide decisions in the present.
When an indicator turns into noise
This is the point where indicators start to get in the way: when they stop serving a practical purpose.
- they exist in excess, with no clear hierarchy
- they are not linked to concrete decisions
- they are tracked out of obligation, not usefulness
- they fuel long debates, but few actions
The effect is well known: leaders run meetings filled with numbers, but with little clarity on what to do differently the next day.
Research by McKinsey shows that organizations with an excess of metrics tend to spend more time on reporting than on decision-making, reducing agility and strategic responsiveness.Performance management: Why keeping score is so hard).
The problem is the lack of a cause-and-effect relationship.
Useful indicators help leaders answer simple, decisive questions, such as:
What needs to be adjusted now?
Which lever is under the team’s control?
What decision needs to be made in this cycle?
Indicators that get in the way, on the other hand, only show consolidated results—that is, outcomes that can no longer be changed.
The performance management literature clearly distinguishes outcome indicators from leading indicators. An excess of the former, without a connection to the latter, drastically reduces the ability for early intervention (Kaplan & Norton, Strategy-Focused Organization).
In this scenario, the organization tracks the past but fails to manage the present.
A classic symptom: indicators do not resolve priority conflicts.
In addition, another clear sign of poor indicator use appears when they fail to help resolve conflicts.
If two areas show strong results but pull the organization in different directions, the indicator has failed to fulfill its strategic role. Instead of guiding choices, it ends up justifying positions that have already been taken
Effective indicators help leaders make choices, guide trade-offs, and support tough decisions. Poorly used indicators only reinforce silos.
Studies published by MIT Sloan Management Review show that metrics disconnected from corporate priorities tend to intensify internal disputes rather than promote coordination.
What more mature organizations do differently
Companies that use indicators to support execution follow a set of recurring principles. They work with a small number of truly decision-oriented indicators, make the link between metrics and actions explicit, review indicators as context changes, and treat metrics as part of an execution system rather than as a periodic report.
In these organizations, the indicator does not end the conversation. It opens the decision.
Reports from Bain & Company show that companies with higher strategic maturity operate with lean sets of critical metrics, frequently reviewed and connected to clear decision-making forums (Management Tools & Trends).
Indicators don’t fail on their own
When indicators hinder execution, the problem is rarely the metric itself, but rather the absence of a system that connects strategy, decision-making, monitoring, and continuous adjustment
Without such a system, even good indicators turn into well-presented numbers—but with little actionability.
Indicators are just one of the possible failure points.
The misuse of indicators is part of a broader problem: the difficulty of translating strategy into consistent decisions over time.
Poorly used indicators are just one of the structural failures that undermine strategy execution.
This discussion is explored in greater depth in the full analysis: Why most strategies fail in execution — even with clear goals and strong indicators
The problem with indicators is not the metric itself—it’s the absence of a system that turns numbers into decisions.
If indicators today generate more discussion than decisions, the issue may not be measuring better, but rethinking how execution is structured.
In many cases, improving execution starts less with new numbers and more with a clear system for prioritization, monitoring, and timely adjustment.
