I once sat down with a CEO who was doing a lot of things right.

The vision was clear: shift from project driven work to a product based company that could scale internationally. Innovation would be a core value, the fuel for new products, and those products would be designed to delight customers and earn their loyalty.

And it was not just talk.

You could feel the cultural change taking shape. Elements of a structured innovation management system were already operational. People were getting used to new habits, new rhythms, and new conversations. At first sight, everything looked aligned.

Until we touched the topic of costs.

The CEO acknowledged that innovation investments were not paying off in the short term, and that was fine. It matched the longer term strategy.

But then came the lucky strike: a purchasing responsible had renegotiated a set of supplier contracts. The impact was huge, several hundred thousand euros in annual savings. The CEO was genuinely excited and shared an idea:

“What if I install a scoreboard in purchasing, showing the annual savings from supplier renegotiations and cheaper component choices?”

In isolation, that is a great idea. It can motivate people to negotiate harder, challenge assumptions, and improve margins. You could almost see how proud the purchasing team felt, and how quickly others might start worrying about being “the one who makes the number drop”.

Everything looked aligned, until we talked about what gets celebrated.

In this specific context, it was a very bad idea.

Why a “good” scoreboard can become a strategic problem

A scoreboard is never just a scoreboard.

It is a signal. A public, repeated, day to day message that answers one question for everyone watching:

“What does leadership really value?”

It is a megaphone in Excel.

This scoreboard would not communicate: “We build innovative products that delight customers.”

It would communicate: “We win by lowering costs.”

And that message would start competing with the product leadership strategy, even if nobody intended it.

A scoreboard is never neutral. It tells people what is safe to optimise.

Cost focus is not wrong, it is just a different strategy

To be clear, cost performance can be an excellent strategic driver.

History is full of examples where operational excellence became the innovation engine: Ford’s assembly line, Dell’s supply chain model, Ryanair’s ruthless simplicity. If you measure cheap, you will get cheap. Even when you want great.

When the strategy is cost leadership, a savings scoreboard is aligned. It reinforces the behaviour you need to win.

But this company had chosen product leadership.

That means you are deliberately making trade offs. You accept that some innovations will increase cost, because they increase value even more. That is not a problem, as long as the customer value is real and deliberate.

The danger is what happens next, in the minds of teams:

• A product team proposes a feature that truly delights customers, but it increases unit cost.
• Purchasing sees the cost increase, and the scoreboard drops.
• The organisation learns that delighting customers is “expensive behaviour” and therefore risky.
• Innovation starts self censoring, not because people resist innovation, but because the incentive system quietly teaches them what is safe.

Operational excellence is a strategy. Product leadership is a different strategy. Mixing the signals creates drift.

The hidden mechanism: drift

Most strategy failures do not happen through a big decision.

They happen through drift.

Small, local optimisations create a different direction than the one the company claims to follow. Over time, the organisation becomes excellent at something else than what leadership intended.

Drift does not need resistance. It only needs people trying to stay safe in the system.

Imagine walking past that screen every morning. Over time, it becomes the weather in the building. You stop noticing it, but it shapes every decision.

If your KPI is public, frequent, and emotionally loaded, it will shape behaviour faster than any strategy slide.

Drift is exactly why I keep coming back to the idea of detecting and correcting drift, because the earliest warning signs show up in signals, not in results.

Look at what gets celebrated without debate. That is your real strategy.

Drift rarely starts with resistance. It starts with people trying to stay safe.

How to walk the talk, practically

If you want product leadership, you need signals that reinforce product leadership. Here are a few practical alternatives that keep the good part of the CEO’s idea, motivation and focus, without undermining the strategy:

1) Replace “savings” with “value protected”

Track cases where purchasing enabled a customer benefit to remain feasible: better material, better reliability, better user experience, fewer complaints. Purchasing becomes a value partner, not just a cost gate.

Example: a slightly more expensive component that cuts failures in the field, reduces service costs, and improves customer trust.

2) Use two scoreboards, and make the hierarchy explicit

One for cost performance, one for customer value. Make it clear that cost wins only when customer value is not harmed. The message becomes: “We manage cost, but we lead with value.”

Even better: make it a shared metric across product, ops, and purchasing, so it stops being “their number versus our idea”.

3) Celebrate smart trade offs, not absolute numbers

Share short internal stories: “We accepted +2% cost because it removed installation friction and reduced churn.” That trains better judgement across teams and makes trade offs feel safe, not political.

4) Create a product leadership KPI that is impossible to ignore

For example: customer delight signals, adoption rates, renewal rates, NPS themes, return rates, time to first value. If the organisation sees these numbers weekly, they become real.

Do not fight the scoreboard. Redesign it so it rewards the strategy you want.

What this changes in the long run

When signals align, people stop guessing. Decisions get faster. Cross functional discussions become more constructive because everyone is optimising for the same north star.

That is how innovation starts compounding.

Not just in better products, but in better execution, clearer prioritisation, and stronger momentum that supports growth in new markets.

When signals match strategy, innovation compounds and growth follows.

If you recognise these patterns in your own projects and want to work on them, you can reach out via the contact page. I am glad to share ideas and examples.