Executives are drowning in metrics these days. Finance is tracking endless ratios, operations is monitoring how efficient things are, marketing is measuring how engaged people are and tech teams produce too many dashboards.
And yet, for all that data, nearly 80% of companies still can’t even get their sales forecasts right more often than not. Clearly, throwing more metrics at the problem isn’t going to magically make the decisions better.
Too many organizations track hundreds of KPIs, but their leaders review only about 30. And of those, only five or seven are actually making a real difference to the bottom line. The rest is noise.
It’s this gap between what you know and what you can actually do with that information that leaves you with blind spots.
The cognitive limits of executives
Humans get tired, and when executives are faced with too many numbers, their judgment starts to get fuzzy. Decision fatigue sets in, and you end up making rash or hesitant choices. Research shows that having too much information leads to worse decisions, feeling more indecisive and struggling with strategic thinking. The outcome is:
- Senior leaders start to hesitate about making tough calls.
- They get bogged down in surface-level trends rather than looking at the bigger picture.
- Decision-making becomes slower and less effective.
The truth is that most executive dashboards are probably not doing their job of giving you clear insights; they’re making it harder to see what’s really going on.
Unclear metric ownership
When metrics are tracked, but nobody really owns them, they tend to fail. Organizations track dozens or hundreds of indicators, but nobody really takes responsibility for them. That leads to:
- A lack of accountability for the outcomes
- Different teams interpreting the same data in completely different ways
- Reports produced without purpose
The 2024 Operational KPI Priorities & Challenges Survey shows that most organizations don’t know what their key metrics should be, or how to actually use them. And without ownership, metrics drift off into irrelevance. Leaders might notice trends they can’t actually do anything about, and blind spots grow.
KPIs without action or clear thresholds
Take a walk into any office and you’ll likely see lots of executive dashboards full of metrics. However, many of them just sit there with no clear targets, no plans in place and no real consequences. Metrics are being tracked, seemingly only for the sake of it.
A genuine KPI should have four key pieces to it:
- A clear threshold that actually triggers a plan of action
- Clear ownership, and with that comes some accountability
- A direct tie to what the business is actually trying to achieve
- Some consequences in place if that threshold gets crossed
If they don’t have these four things, then they’re there to make lots of noise. Take “brand awareness” for example: if it goes up by 10% what actually happens next? If the best answer is “we talk about it,” then it’s a discussion point, not a KPI.
Leadership design problem: The real issue
This isn’t about having a lack of data. It is a leadership problem in how things are designed. Companies track loads of stuff but then only decide on – or act on — a tiny sliver of that. Everyone usually operates in their own space. As a result, what you see is:
- The finance team sets targets but never even talks to the ops team.
- Marketing brings in leads, but sales can’t turn them into anything tangible.
- The product team develops features that nobody actually needs.
- Customer success has to mop up all the mess left by the other departments.
Departments are optimizing for their individual metrics, but the business as a whole is falling apart. To sort this out, you need to redesign your leadership so that it’s integrated right from the beginning, you assign clear ownership and you reward people for working together over getting the numbers right.
Redesigning metrics for actionable insights
To turn your metrics into tools that actually inform your decisions, ask yourself: Are they driving action or taking up space on a report? If not, then it’s probably time to rethink these strategies.
- Match your vanity metrics with real substance, like linking website traffic to actual sales or customer value, for example.
- Use forward-looking indicators and cohorts to gauge where things are headed. How much revenue are you getting from new customers versus existing ones, say, or how does revenue change over time?
- Make sure everyone is on the same page about what each metric is supposed to measure and what it actually takes to succeed.
- Before you start tracking anything, get every team on board so you know that your metrics are actually guiding decision-making.
The bottom line is we want metrics to drive action, not fill up reports so we can say we’re doing something. We need to turn all those insights into real-world results.
Conclusion: The governance lesson
The problem isn’t that there’s not enough data. It’s that leaders are tracking the wrong things, or no one knows who’s responsible for what or they don’t have any purpose behind their KPIs.
Leaders need to:
- Pick a small handful of metrics that really matter.
- Link them up to concrete decisions and actions, and make it clear who’s accountable.
- Focus on making sure your measurement system is solid and useful, rather than focusing on metric volume.
Executive dashboards should be clear and easy to understand, not confusing jargon that no one can follow. When you’re tracking the right metrics, you can make clear decisions, be confident in them, and actually get some real results. Less clutter, more sense. That’s how you lead effectively.
Opinions expressed by SmartBrief contributors are their own.
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