In The Most Perverse Incentive of All, Earl Mardle tells the story of a Norwegian oil company in which management's obsession with KPIs eventually came back to bite it. The organization’s budgeting ‘system’ was based on the widely held management assumption that "if you can't measure it, you can't manage it." This simplistic approach to performance management and executive reward had resulted in attention being misdirected towards short-term costs at the expense of more important oil exploration opportunities.
As Mardle says, “The major problem with all management is that its objectives and rewards [can so easily] become divorced from its purpose.” He therefore offers the following corollary to the “what gets measured gets done” mantra:
"... you end up with a business that only produces measurements. There's no point being up to your ass in KPI's when the original intention was to drill for oil."
In the Re-focusing performance management post, I similarly cautioned against the excessive use of measurement by arguing that you cannot collapse the full breadth of performance management into a system of performance measurement. To this I would add:
Scorekeepers and commentators should not be seen as being more important than the players!
For a few more thoughts on this alternative view of target setting, you might also like to look at Target setting - Is it WISE to be SMART?