A friend of mine was on a flight a few years back with a Business Process Management (BPM) expert, who had done a lot of consulting for various car companies... the fellow told an interesting tale about how one single bad business metric made him swear off GM cars forever... and it just might be a major reason for their downfall.
The business process seemed innocuous enough at first glance... GM wanted to control costs on their auto parts. So, the process stated to test every auto part, and look for the most expensive parts that were the most reliable. Next, ask suppliers for a cheaper version of that part. Sure, the cheaper version of that part might fail more often... but so what? These are the parts that were severely over-engineered. You don't need space shuttle quality parts in a minivan... so what's the harm?
Notice the problem? If not, don't worry... neither did the millionaires who ran GM.
Now, consider how a rival car company dealt with the same problem. They would also run tests on every car part. They would also keep metrics on which car part failed the least, and which failed the most. However, they did very different things with the data. The rival company took the parts that failed the most often, and either demanded higher quality versions, or searched for a new vendor. Sometimes these changes would increase the price of the part, sometimes it would decrease.
Now do you see the problem? Each business process had an overall side-effect to the quality of the cars produced. As rival companies made their cars more and more reliable, GM was making theirs less and less reliable! Instead of focusing cost cutting on the overall finished product, they decided to tie cost cutting directly to making lower quality cars!
After realizing this, and being completely unable to get anybody at GM to change their metrics, the gentleman decided to swear off GM cars forever...
Peter Senge warned about similar problems 30 years ago in his famous book The Fifth Discipline. Side effects, negative feedback loops, and simple delays in cause-and-effect can wreak havoc on any business process you put together. No matter what your metric, there is always a case where a "good" result is a very bad thing... The key is to try to predict how that could be possible... otherwise, by doing your job better and better, you just might be dooming your company to mediocrity.
Naturally, its probably unfair to blame this all on one single business process. There are also the armies of people asleep at the switch who should have done something to correct it. Unfortunately, the folks who design the business processes are usually unable or unwilling to accept this harsh reality... and if they are politically powerful, bad processes remain. This is why we need "nice" tools that help gather information about these negative consequences that are outside of the model, and make it clear that its time to change...
That's one of the stated goals of Enterprise 2.0 tools... but even they can't help you unless you first try to build up trust and camaraderie in your company. Only then is it easy for people to accept the harsh reality.