What Obedience-Rewarding Leadership Costs an Organization

A laptop mouse that moves on its own is now a real product category. People buy them to keep the little activity light green while they step away from their desk. An entire industry now exists just to fool software that was built to prove someone is working.

One financial services and wealth management client in Europe found out exactly what that kind of device really measures. The culture had run on command and control for years. Hierarchy always won over competence. People learned fast that questioning a decision got you in trouble, so bad news stopped traveling upward. People agreed to things in meetings, then did something else once the meeting ended.

Leadership tracked what was easy to count: seats filled, keystrokes logged, lines of code per developer. Employees gave the metrics exactly what they asked for, because that's what any smart person does inside a system like that. Some wasted time writing code that did nothing. Remote staff, watched through laptop activity trackers, bought the mouse jigglers mentioned above. None of it looked like a problem. The numbers were fine. Underneath them, technical debt had been piling up for years, invisible to anyone staring at the dashboard that measured activity rather than outcomes.

The CEO called me because past transformations hadn't stuck, and he couldn't figure out why. His latest fix was automated testing, measured by the number of test cases produced. The count was huge. A lot of those test cases checked nothing that mattered. People had written them to move a number, not to catch a bug or improve quality.

I asked to see the dashboards he actually ran the business on. One look told me everything I needed to know and had assumed already. Every metric measured obedience and activity, not health and outcomes. Running the Adaptive Capability Diagnostic confirmed it: this organization rewarded obedience over competence, purpose, and its own stated goals.

So we started at the root. HR rebuilt roles and performance criteria. IT retired the vanity metrics and replaced them with ones tied to outcomes: customer satisfaction, employee engagement and attrition, process efficiency, financial performance, organizational agility. Leadership added leading indicators too, pipeline health, product engagement, strategic alignment, instead of only looking backward. We put decision-makers in the same room on a regular basis instead of routing everything through an approval chain that was slow and outdated. Every employee could trace their own work back to a goal that mattered. And we dealt with the habit of punishing people for raising problems, directly, instead of assuming a new scorecard would fix that on its own.

People stopped gaming the system. Not because gaming got banned. Because they finally had something real to work toward instead. Code got simpler. Testing started catching what mattered. The organization could see its own problems early enough to act on them, instead of finding out only after they'd already gotten expensive.

Measurement is one way an organization senses trouble. It's not the only way.

A small to mid-size European retailer brought me in for an ERP rollout. They'd done the groundwork properly: processes mapped and documented before anyone touched the system, people trained, testing underway. Everything looked ready. Then, during testing, one employee used a workaround that had never been part of the new design. A few questions later, I understood what I was looking at. The workaround was left over from an earlier process change, never documented, because the employee had been afraid admitting it existed would cause trouble. It changed the bill of materials. More conversations turned up the same thing across most of the company's processes: old workarounds nobody had ever told anyone about.

I asked the employee directly about it. The answer came instantly: "Oh, I'm still following the process. I just have to do this part so everything still works." That's a workaround, however it gets described, and it couldn't be ignored.

Left alone, this would have compounded. More people trained on a process that didn't match reality. A wrong bill of materials going live. Financial impact, unhappy customers, returns, and nobody finding out until the damage had already shipped.

Because we caught it during testing instead of after go-live, the fix was still cheap. Two more weeks of direct observation found and fixed the rest of the hidden workarounds before the new system went live. We set baseline metrics, cycle times, rework rates, backlog build-up, so they'd have something to watch for drift going forward. Employees got an actual, low-fear way to flag process problems. And alongside the usual exit interviews, we added stay interviews: asking people why they were staying, and what the most frustrating part of their day looked like.

Both companies were blind to what was happening inside them. Different industries, different symptoms, same broken capability: Assessment & Sensing, the dimension of the Adaptive Capability Ecosystem built to catch exactly this kind of blind spot before it gets expensive. A dashboard only tracks what someone decided was worth tracking. It can't ask a follow-up question. Only a person watching the actual work catches the thing nobody thought to write down or was too scared to admit. And only an organization that doesn't punish honesty will ever hear about it in time.

If you're curious what your own dashboards are really measuring, the Organizational Adaptability Pulse Check is a free starting point. It’s only twelve questions and takes about five minutes.

P.S. My new book, Stop Managing Change, is out. It's the long version of what I write about here. The official launch week is 10 November. I am looking for to get some honest reviews. If you'd like to be on the launch team, send me a DM and I'll send you a copy.