A DICTIONARY OF MISLEADING MANAGEMENT METRICS

A Dictionary of Misleading Management Metrics examines sixty-one of the numbers, ratios, and grids that organizations rely on and explains, entry by entry, the conditions under which each stops describing the thing it was adopted to describe. The entries cover financial measures such as EBITDA and return on equity, commercial measures such as bookings and pipeline coverage, operational measures such as capacity utilization and on-time delivery, people measures such as engagement scores and the nine-box grid, and the familiar two-by-two grids of strategy and risk, and each is analyzed through a common framework of six failure mechanisms: Goodhart drift, the proxy gap, survivor skew, vanity, gaming, and theater. The book is written for managers, analysts, and MBA students who must interpret and act on such numbers rather than merely compute them, and it offers, alongside the criticism, the diagnostic questions and the replacement measures that hold up under pressure. Readers will finish it able to identify why a given metric will fail before it fails, to estimate how long a measure will remain informative after it becomes a target, and to build reporting that keeps the distance between the number and the thing in view.