Metrics have become an obsession. They’re the scorecards of success, the evidence behind decisions, and the fuel for endless debates. But let’s be honest: metrics can also be a mess. They clarify and confuse, illuminate and obscure, guide and mislead—sometimes all at once.

The Paradox of Metrics

Nearly every leader I know grapples with metrics. What should we measure? Are we focusing on the right numbers? Why do we feel like we’re drowning in data but starving for insight? These questions cut to the core of how organizations operate and how leaders lead.

At the heart of this challenge lies a profound tension captured by these popular business quotes:

“You can’t manage what you can’t measure.”

“Not everything that counts can be counted, and not everything that can be counted counts.”

This paradox captures the double-edged nature of metrics. They’re indispensable for driving accountability, focus, and progress. Yet, they can distort priorities, oversimplify complex realities, and lead us astray if we’re not careful.

Leading Goes Beyond Metrics

This tension between the two quotes highlights a fundamental truth: metrics aren’t the only way to manage effectively. In fact, I’d argue that the first quote—”You can’t manage what you can’t measure”—is fundamentally flawed. Humans manage all sorts of complex aspects of life without metrics.

Take parenting as an example. Parents don’t rely on dashboards to quantify every aspect of their child’s development. Instead, they observe behaviors, identify patterns, and draw on past experiences to make decisions. If a child seems withdrawn or upset, a parent doesn’t need a specific metric to recognize the issue and respond thoughtfully. They rely on intuition, context, and accumulated wisdom.

The same applies to leadership. Many great leaders manage effectively by observing team dynamics, listening to feedback, and recognizing patterns over time. They see what’s working and what isn’t based on their experiences and the signals they pick up in conversations and day-to-day interactions. Metrics can complement these insights, but they’re not the only—or even necessarily the primary—way to manage.

This doesn’t mean metrics aren’t valuable. They are. But they must be used alongside human judgment and experience. That’s where a thoughtful framework for metrics becomes essential.

The Three Ds (Types) of Metrics

This leads us to a framework I’ve found invaluable for making sense of metrics: the Three Ds. Metrics can be better understood through three distinct roles they play: Determine, Detect, and Diagnose. By recognizing these roles, leaders can use metrics with greater precision and purpose, avoiding common pitfalls and maximizing their impact.

Let’s dive into the Three Ds to see how they clarify the tension and guide better use of metrics.

• Determine: The Metric as the Final Arbiter. Metrics that determine outcomes serve as the ultimate measure of success or failure. Think about quarterly revenue targets, customer retention rates, or product launch dates. These metrics decide whether a goal has been achieved or not. But here’s the trap: over-relying on metrics that determine outcomes can lead to narrow, short-term thinking. They generally are backward-looking, representing the results of actions that were already taken. When such metrics become the end-all, we risk ignoring the underlying systems that drive long-term success.
• Detect: The Metric as a Signal. Metrics that detect changes highlight areas that deserve attention. They act as early warning systems or opportunity flags. For instance, a spike in website traffic might signal a new marketing success, while an increase in employee turnover could indicate cultural challenges. Metrics that detect changes are incredibly useful but require a balance of vigilance and discernment. Not every signal requires immediate action, and not every fluctuation is meaningful. Leaders need the wisdom to differentiate between noise and actionable insights.
• Diagnose: The Metric as a Source of Insight. Metrics that diagnose help identify the root cause of problems or opportunities. For example, if customer satisfaction drops, metrics that diagnose might reveal whether it’s due to longer wait times, product quality issues, or unclear communication. These metrics are invaluable for course correction, but they can also lead to analysis paralysis. Leaders must resist the urge to get bogged down in endless data dives. The goal is to diagnose problems and opportunities that you are committed to improving and will significantly impact future outcomes.

Putting the Three Ds Into Use

Understanding the Three Ds is one thing—putting them into practice is another. To use metrics effectively, leaders need to integrate these roles into their decision-making processes and organizational routines. Here’s how:

• Define the purpose of each metric. Start by categorizing your key metrics. Ask yourself: Is this metric meant to determine success, detect areas of focus, or diagnose deeper issues? Ensuring clarity about the purpose of each metric will prevent misuse and confusion.
• Establish metrics in context. No metric exists in isolation. Consider how each one fits into the broader picture. For instance, while a revenue goal (determine) might indicate success, fluctuations in customer satisfaction (detect) or product feedback (diagnose) can reveal whether that success is sustainable.
• Incorporate metrics into conversations. Build discussions of the Three Ds into your regular meetings. Instead of simply reviewing dashboards, ask: What do these metrics tell us about where we are? Are there warning signs we need to address? What underlying causes might explain these trends?
• Balance action and reflection. Avoid the extremes of reacting to every signal or overanalyzing every data point. Use detect metrics to guide focus, then leverage diagnose metrics to explore root causes before jumping to solutions. This balance ensures thoughtful, effective responses.
• Recognize metrics are tools, not truths. Metrics themselves are neither inherently good nor bad—it’s how they’re used that determines their value. Misapplied metrics can mislead or distort priorities, while well-applied ones can drive clarity and progress. Always evaluate whether your use of metrics is creating understanding or confusion.
• Revisit and refine regularly. Metrics evolve as organizations grow. Periodically assess whether your metrics are still aligned with your goals. Are they serving their intended purpose? Are there gaps in your approach that new metrics could address?

Sparking New Leadership Thinking

Leaders play a crucial role in shaping how metrics are used within their organizations. Beyond setting targets or reviewing dashboards, leaders must actively influence how their teams interpret, discuss, and act on metrics. This requires intentionality and a focus on fostering the right environment for metrics to drive insight and improvement.

Here’s how leaders can create a culture that maximizes the value of metrics:

• Turn metrics into learning opportunities: Use metrics to spark curiosity and problem-solving, not fear or blame. For example, when customer satisfaction scores drop, guide the team to analyze possible causes and propose solutions, framing the discussion around continuous improvement rather than pointing fingers.
• Ask for feedback and thoughts: Actively pair data with qualitative insights and team judgment to uncover the full story behind the numbers. For instance, when reviewing employee engagement scores, ask team members to share observations from recent conversations and gather insights from an employee advisory council.
• Focus meetings on actions, not numbers: Dedicate time in meetings to exploring future improvements rather than rehashing past results. For example, if a meeting is focused on reviewing a customer feedback report, ensure that most of the time is dedicated to problem solving and next steps, not metrics and data.
• Align metrics with strategic shifts: Regularly reevaluate whether your metrics support the organization’s evolving priorities. For instance, if your strategy pivots from growth to efficiency, move from tracking lead generation to focusing on operational metrics like cost-to-serve and customer retention.

The Bottom Line

When you use metrics with intentionality, they become tools of empowerment rather than traps of confusion. They help you manage what you measure—without forgetting that not everything that counts can be counted.