Scholars in the subject of Management have extensively analysed performance measurement, reinforcing many of the points in the previous articles. A foundational concept in theory is that what gets measured gets managed an idea often attributed to Peter Drucker and other management thinkers. In practice, this adage holds true, when clear metrics exist, employees tend to focus on them [1]. This can drive desired outcomes but as academics caution, it can also lead to unintended consequences if metrics are poorly chosen. Economists refer to Goodhart’s Law, once a measure becomes a strict target, it can distort behaviour and lose its validity. This highlights the need, stressed in academic literature, for balanced and well-aligned measures. Professor Robert Kaplan and David Norton’s introduction of the Balanced Scorecard in the 1990s (yes the 1990, how much has changed in the past 35 years) was rooted in academic research showing that traditional financial metrics alone were inadequate [2]. Their framework (now used by ~70% of companies worldwide [3] incorporate multiple perspectives financial, customer, internal processes, learning and growth to provide a more holistic gauge of organizational performance. Studies have found that organizations using a mix of financial and non-financial indicators tend to outperform those relying solely on one dimension, because they capture a fuller picture and encourage long-term thinking [4].
Despite this knowledge, academia also recognizes the high failure rate of performance measurement initiatives. Research by Mike Bourne and Andy Neely, experts in performance management from Cambridge University, indicates that around 70% of performance measurement system implementations fail to achieve their objectives [5]. In analysing why, they point to several themes, political, infrastructural and focus-related barriers [6]. Political issues refer to internal organizational politics, culture and human factors for example, power struggles over goals or fears and resistance among staff (mirroring the cultural barriers discussed earlier). Infrastructural issues pertain to inadequate systems, data and resources essentially the technological limitations that can cripple a measurement effort. Finally, focus-related issues mean lack of strategic clarity and poor metric design if an initiative doesn’t focus on the right things in the right way, it will likely fail. These categorizations align closely with the real-world barriers of culture, leadership, technology and operational complexity outlined above. They underscore that measuring performance is not just a technical exercise but an organizational change effort. Change management methodologies are often invoked, for instance, researchers note that successful implementation requires senior management commitment, employee involvement, training and continuous reinforcement [7]. Simply installing a dashboard without addressing these soft factors is doomed to fail.
Another area of focus is the emphasis on alignment ensuring that performance measures link to strategy at every level (this is more difficult than what it first appears). Studies in strategic management highlight that when metrics are derived from strategic objectives (and employees understand that link) organizations see stronger execution of strategy and better performance outcomes [8] [9]. This is why frameworks like the Balanced Scorecard and newer methodologies (e.g. Objectives and Key Results (OKRs) in the tech world [10]) are advocated in both business and academic communities, they tie daily metrics to strategic goals, creating a “line of sight” from the front-line employee up to the CEO’s objectives. Conversely, academics have observed that in many businesses, performance measurement falters because metrics have no clear connection to strategic goals, they are either too generic or reflect historical reporting needs rather than current strategy (sometimes called the “so what?” problem). This results in apathy toward measurement, since people don’t see the relevance. Research reinforces the point that leadership must define and communicate what success looks like (strategy) and build a measurement system around that definition [7]. Without this alignment, measurement efforts often degrade into checkbox compliance or an over-abundance of data with no insight.
Lastly, literature often discusses the continuous improvement loop facilitated by measurement. Pioneering quality gurus like W. Edwards Deming stressed that measurement is integral to the Plan-Do-Check-Act cycle for organizational learning. In modern terms, high-performing organizations establish feedback loops, they set targets, measure results, analyse gaps and adapt in a recurring cycle. This helps to creates a performance driven learning culture. When organizations do not measure, they effectively break this loop. As performance expert Stacey Barr bluntly put it, not measuring performance means you can’t know what’s working and what isn’t, which fundamentally prevents good strategic decision making [11]. Academic case studies have shown that companies making performance measurement an ongoing organizational habit tend to be more agile and successful [12] [9]. On the other hand, businesses that only sporadically measure or treat it as a one-time project, fail to reap benefits confirming the view that consistency and longevity of the measurement process are key. The consensus in the literature is that overcoming the barriers (cultural, leadership, etc.) is possible but requires deliberate effort and often a shift in mindset at all levels of the organization. Measurement should be viewed not as an audit or a threat but as a tool for collective improvement and strategic navigation. That ethos, supported by appropriate technology and skills, is what separates organizations that succeed with performance management from those that abandon it.
In conclusion, while the value of measuring organizational performance is well established, numerous barriers explain why many organizations still do not do it effectively. Cultural factors such as fear of accountability, lack of a measurement habit and change resistance can create an environment where metrics are shunned or ignored. Leadership plays a pivotal role, without clear strategic priorities, alignment and top-down commitment, performance measurement will not take root. Technological and data limitations have historically constrained what companies can track, although modern analytics are easing these issues for those willing to invest and the inherent complexity of designing and integrating meaningful performance measures poses an intellectual and operational challenge that some organizations are not prepared to tackle. Industry patterns show that these barriers manifest differently across contexts, sectors with readily quantifiable outputs have led the way in measurement, whereas those dealing in intangibles or complex outcomes lag behind or use only partial measures. The academic perspectives reinforce these findings, highlighting the importance of balanced, aligned metrics and warning of common failure points if initiatives are not managed well.
Overcoming the reluctance to measure requires addressing each of these barriers. Culturally, it means fostering a safe, data-informed environment where metrics are used for learning, not punishment. In leadership terms, it means executives making performance measurement a priority agreeing on what matters, tracking it rigorously and leading by example in using data for decisions. Technologically, it involves breaking down data silos and equipping the organization with tools that make performance information accessible and actionable. Operationally, it demands carefully selecting key metrics tied to strategy (avoiding the trap of measuring only what’s easy) and embedding the review of these metrics into regular management routines. Organizations that have made these changes demonstrate measurable benefits from higher change success rates to improved financial returns [7]. The journey is not easy, as proven by the high failure rates of performance measurement projects but the trends are clear, in an increasingly data-driven and competitive world organizations can no longer afford to fly blind. Those that continue to neglect measuring collective performance risk misalignment, stagnation and missed opportunities, whereas those that break through the cultural and operational barriers set themselves up for continuous improvement and sustained success [7] [1]. The choice to measure or not to measure can ultimately shape an organization’s fate and the evidence suggests that embracing comprehensive performance measurement, while challenging, is a hallmark of resilient and high-performing organizations.
References
[1] Wells Fargo and the Misuse of Metrics https://www.from.digital/insights/wells-fargo-and-misuse-metrics#:~:text=,means%20necessary%20%E2%80%93%20including%20cheating
[2] Organizational Performance Isn't What You Think—Here's Why https://nobl.io/changemaker/how-to-improve-organizational-performance/#:~:text=Before%20improving%20performance%2C%20leaders%20need,ways%20to%20measure%20organizational%20performance
[3] A Balanced Scorecard for Maximizing Data Performance PMC https://pmc.ncbi.nlm.nih.gov/articles/PMC9008540/#:~:text=Hickman%20,a%20balanced%20scorecard%20management%20system
[4] Organizational Performance Isn't What You Think—Here's Why https://nobl.io/changemaker/how-to-improve-organizational-performance/#:~:text=Reward%20Structure,strategy%2C%20your%20strategy%20will%20fail
[5] Mike Bourne and Andy Neely, Int. J. Business Performance Management, Vol. 5, No. 1, 2003, Implementing performance measurement systems: a literature review https://www.tlog.lth.se/fileadmin/tlog/Utbildning/Kurser/Logistik_i_foersoerjningskedjor/Artiklar/Perf_Meas._Neely.pdf
[6] Andy Neely and Mike Bourne, December 2000, Measuring Business Excellence 4(4):3-7, DOI:10.1108/13683040010362283, Why Measurement Initiatives Fail https://www.researchgate.net/publication/235281985_Why_Measurement_Initiatives_Fail#:~:text=Points%20to%20three%20causes%20of,Suggests%20that%20the
[7] Office of Personnel Management (OPM) (1999). “Good Measurement Makes a Difference in Organizational Performance.”https://www.opm.gov/policy-data-oversight/performance-management/measuring/good-measurement-makes-a-difference-in-organizational-performance/#:~:text=Measurement%20plays%20a%20crucial%20role,financial%20performance%20and%20operating%20efficiency
[8] Bain & Co. survey Ivey Business Journal (2004). “The Balanced Scorecard: To Adopt or Not to Adopt?” https://iveybusinessjournal.com/publication/the-balanced-scorecard-to-adopt-or-not-to-adopt/#:~:text=A%20recent%20Bain%20%26%20Company,responding%20organizations%2C%20a%20higher20
[9] Measuring and evaluating key performance indicators for organizational effectiveness https://vorecol.com/blogs/blog-measuring-and-evaluating-key-performance-indicators-for-organizational-effectiveness-10274#:
[10] Ultimate Guide to Objective and Key Results – OKR Meaning and Examples, https://www.getjop.com/blog/what-is-okr
[11] Stacey Barr, Last modified: September 25, 2019 What Happens if We Don’t Measure Performance? https://www.staceybarr.com/measure-up/what-happens-if-we-dont-measure-performance/
[12] Stacey Barr, The Top 5 Struggles With KPIs And Performance Measurement https://staceybarr.com/downloads/Top5StrugglesWithKPIsAndPerformanceMeasurement.pdf
Please note that parts of this post were assisted by an Artificial Intelligence (AI) tool. The AI has been used to generate certain content and provide information synthesis. While every effort has been made to ensure accuracy, the AI's contributions are based on its training data and algorithms and should be considered as supplementary information.
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