A while back, Maria Tymtsias raised an uncomfortable question about EcoVadis assessments on her LinkedIn: are companies being rewarded for actual sustainability progress, or simply for producing the right documentation? Her observation followed an assessment in which, according to her account, a consultancy with limited sustainability policies, minimal action and very few measurable results still achieved a Silver Medal, placing it among the top 15% of assessed companies at the time.
If a company can achieve a strong sustainability rating without having equally strong sustainability practices in place, what does that rating actually tell us? The assessment itself may be valid, but does achieving a high score necessarily mean a company is making meaningful progress?
That question came from sustainability reporting. But it’s one we should be asking far more widely, from revenue forecasts and sales activity to investor reporting and strategic decision-making.
Across businesses, we’ve become increasingly focused on measuring, documenting and reporting progress. All of which should help us understand whether we’re actually moving in the right direction. But somewhere along the way, reporting can become an objective in itself. The assessment needs completing. The dashboard needs updating. The targets need hitting.
Have we become so focused on demonstrating progress that we’ve started changing how we work to satisfy the measurements, rather than using those measurements to understand how we’re performing?
Commercial metrics are no different.
A growing sales pipeline suggests future revenue and potential market demand. Rising customer acquisition numbers indicate market traction. And impressive year-on-year growth figures can make a business attractive, particularly to investors.
On paper, everything appears to be moving in the right direction. Sounds good, right?
But a €5 million pipeline tells us very little about likely future revenue if the opportunities are poorly qualified. And impressive growth figures tell us very little about the health of a business without understanding what that growth costs to achieve.
The problem isn’t that businesses measure too much. It’s that we’ve become very good at measuring what makes us look successful, and seemingly much less interested in understanding whether we actually are.
To summarise Goodhart’s Law: “When a measure becomes a target, it ceases to be a good measure.”
If sales teams are measured on pipeline creation, they’re incentivised to create pipeline, regardless of quality. If executives are rewarded for revenue growth, profitability can become secondary.
I've seen versions of this throughout my career. Take a company preparing for an acquisition. It wants to demonstrate strong future growth potential, and a healthy sales pipeline is one way of supporting that story. So the commercial team is given an ambitious pipeline target to reach- nothing unusual about that.
The problem starts when hitting that number becomes more important than what’s actually behind it. Whether opportunities are properly qualified, customers have genuine buying intent, or deals are realistically going to close becomes secondary. On paper, the business now has an impressive pipeline and promising growth projections. But has it actually validated market demand, identified where its product is gaining traction or built a reliable picture of future revenue? If we start with the conclusion we want to reach and then adjust how we measure performance to support it, are we really trying to understand the business? Or just finding evidence for the story we want to tell?
And the same pattern appears across different teams. A customer success team celebrates high retention rates without questioning whether customers are staying because they see value in the product or simply because they’re locked into long-term contracts. An SDR team hits its target for meetings booked, but half of those meetings never happen and fewer still turn into real opportunities.
Different departments, different metrics. But the same risk: confusing evidence of activity with evidence of progress.
To be clear, none of this means that growing pipelines, revenue growth or high cash burn are inherently problematic. Experienced investors and leadership teams already know that headline figures need context. The issue is what happens when the pressure to deliver those figures starts influencing the information being reported in the first place.
People respond rationally to what they’re rewarded for. If the system pays for impressive numbers, it will get impressive numbers.
And while it’s easy to focus on how misleading numbers might influence investors, there’s another risk that’s more concerning: the business starts believing its own reporting.
That €5 million pipeline doesn’t just appear in an investor presentation. It influences hiring decisions, expansion plans, budgets and next year’s revenue targets. The business starts making real commitments against revenue that may never materialise. When the underlying information is unreliable, every report, forecast and strategic decision built on top of it becomes questionable. It’s like building a house on sand. You can keep adding floors, but that doesn’t make the foundations any stronger.
And what happens when the numbers don’t materialise?
How often do businesses go back and examine what happened to the pipeline they were celebrating twelve months earlier? Which opportunities actually closed? Which assumptions proved wrong? Did the VP who challenged the original forecast get listened to, or were they seen as being too pessimistic?
Reporting should help businesses learn, not just demonstrate performance at a particular moment in time. If nobody goes back to compare what was predicted with what actually happened, how does the business improve the quality of its next decision?
Perhaps the simplest test is this: if nobody required us to report these numbers, would we still consider them useful for running the business?
Asking that question might not produce the most impressive board presentation. But it could prevent a business from investing in the wrong market, scaling an unproven commercial model or making commitments based on growth that was never particularly likely to materialise.
The purpose of reporting should be to help a business understand reality, not to create a version of reality that looks good on paper.
