Most companies and projects will use metrics as goals. There are a lot of benefits to it, especially in unkind environments where realtime feedback is hard to come by. It serves very important purpose in managing a project, team or company
Gives a clear actionable goal to the team
Provides feedback in as near realtime as possible to iterate quickly
Hold a team accountable
Identify when a team fails and debug why to improve in the long term
…
However, a lot can get lost when single-mindedly focusing on one metric. One number is trying to capture a ton of complexity. At best it is an approximation of the underlying mission you are trying to achieve. It can get close to measuring that goal but it is never 100% accurate. In our busy day-to-day, we often fail to acknowledge and counter these shortcomings. A few examples to illustrate the above reasoning
DAU Example
Acme company wants to provide banking services to unbanked segment of the population. They use DAUs as the metric to optimize for. Teams are incentivized to drive up those DAU numbers. Unconsciously, one team forgets the mission of the goal and starts gamifying the experience. It increases conversion rates on sign-up, those users engage more and eventually become DAUs. Voila! Company rewards this team for driving them towards the goal.
In the above simplistic example, there are ways to drive DAUs that don’t align with company’s mission. However, that complexity can’t be captured in the metric in short-medium term. It might be captured in the long term on 12+ month timescale when users ultimately decide to vote with their feet because they realize it is not healthy for them. At best, you will learn that you were driving the DAUs in a sub-optimal way down the road. At worst, it will be too late to course correct by then.
Counteraction: how can you avoid these traps?
The simple answer is that leaders need to invest more time and understand more thoroughly. A few aspects to think through that can help contextualize a given metric
What is the mission you are trying to achieve?
How closely does this metric capture the mission?
How is the metric calculated? What are the caveats associated with it in the calculation?
What are the shortcomings in accuracy and/or recall of that metric? What are the blindspots it fails to capture?
What are there other complimentary or counter metrics you can use to contextualize this metric better?
What are sub-optimal ways to drive this metric? Be on the lookout for those!
Answering these questions can help provide a framework to evaluate progress against a metric, especially when there is real progress that helps your users but it fails to get captured in your measure. That is the time a leader can recognize an individual, team or company for doing the right thing because what you reward is what you will get!