Measure the right things badly: It is important to track the right metrics and know what to do with them to see the performance improvement. Performance metrics should well directly link to the ultimate business goals they want to achieve at the strategic level. For example, if the business strategy is an early adopter and rewards innovation, and then the metrics have to accommodate service outcomes that may have a higher level of support for that goal. The digital organization needs to expand the capacity by improving business effectiveness, operation efficiency, setting KPIs to resolve problems, increase in the number of problems successfully resolved, optimize business process, and improve the organization’s scalability and changeability. However, even you have a well-defined set of measurement, it doesn't guarantee you could measure them right. One of the biggest problems with metrics, in general, is that, once you have them, people will try to game them. Metrics shouldn’t motivate a team to game the data, otherwise, they can filter and even distort qualitative evidence and prevent the management from seeing the truth, or distract the business from reaching the long-term business goals. Measuring the right thing badly will mislead the management for decision-making or decelerate business performance improvement. Thus, ensure that the measures are both qualitative and quantitative, and implement whatever mechanisms you need to be able to gather the data. Take a systematic approach, put the cohesive effort into taking the correct measurements, collecting the data obtained, analyzing it, evaluating it, determining what needs to be improved, determining what the actions are to improve it, assigning actions to performance improvements, continue to measure the results and make adjustments in continuous growth.
Measure the wrong things, either well or badly: Wrong selections of key performance setting could get the devastating effect on the business. The most dangerous part is when performance system is connected with motivation system on an operational level, but disconnected from the strategy management. It’s like that the business wheel keeps spinning without going anywhere, just waste time and resource. The whole issue of measuring the right things is to have a starting point and the performance metrics that come first at a strategic level are doing the job. They serve as headings to of chapters of measures that will be defined at tactical and operational levels. Therefore, to avoid the pitfall of measuring the wrong things, the people in the organization need to know and understand why the data are being collected and analyzed, as well as what decisions will be made based on the data. Performance metrics are numbers in context, results are related to your strategic goals. The fewer the better, but they have to be credible and relevant also in the eyes of the stakeholders. It’s important to measure performance that could tell the full story and ensure the business as a whole is superior to the sum of pieces.
Well defining the right set of metrics will never be an easy job, but always keep in mind of the "simplicity" principles, and do not confuse the means with the end. It takes multifaceted approaches from multidimensional perspectives, to avoid those pitfalls, ensure measuring the right things in the right way, and make sure that the business as a whole is superior to the sum of pieces.
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