Beyond KPIs: The Cobra Effect and the Watermelon Effect in ITSM

# ITIL

# Service Management

Why Green Dashboards Can Still Signal Failure in Digital Service Management

May 26, 2026

Yurguen Penaranda Thomas

Beyond KPIs: The Cobra Effect and the Watermelon Effect in ITSM

Measurement vs Operational Reality in Service Management

Throughout its different versions, ITIL 4 has evolved from being a best practice framework for IT management into a best practice framework for the management of digital products and services. This change has made its approach less technical and more focused on a holistic vision that encompasses all stages of the service lifecycle. Such a change also requires certain adjustments in the way services are measured and in the way service improvement actions are identified and implemented.

Why is it that even when all indicators appear green on control dashboards, service users still perceive that they received poor service? Why is it that even when delivery times for requests associated with a digital service decrease, financial analyses show that the operating costs of that service have increased? This article will analyze two effects that may explain these questions and how the current ITIL approach (Version 5) can help avoid these biases.

The Watermelon Effect Analogy

This analogy refers to the colors of a watermelon: green on the outside and red on the inside. In the service management context, it refers to situations where, when looking at control dashboards, all indicators are meeting their targets (green), but users perceive that they are receiving poor service (red). This is due to a disconnect between what the indicators are measuring and what service users truly value, generating a false positive perception and preventing hidden service deficiencies from being identified.

The Cobra Effect Analogy

This analogy refers to a phenomenon in which a supposed solution to a problem actually worsens it. Its name comes from a historical event in colonial India, where, due to an overpopulation of cobras, the British government offered a reward for every dead cobra delivered in order to reduce the cobra population. This led some people to start breeding cobras in order to kill them and collect a larger reward. Authorities discovered these practices and canceled the reward program, and eventually all the bred cobras were released. It is even said that the number of cobras was greater when the program ended than when it began.

Measurements and Improvements Without Alignment Can Generate These Effects in Service Management

Measurements and the adoption of improvement actions are vital in the field of digital service management, but if these types of practices are implemented without a clear direction, without alignment to strategy, and without alignment to the value customers and users expect to receive, these biases may emerge.

In the case of the watermelon effect, this may occur when a culture focused on achieving an indicator target is promoted, where the primary emphasis is simply on reaching the number itself, without clearly understanding the underlying purpose behind that number.

This can commonly occur in first-level support areas such as the Service Desk, where service SLAs typically define ticket resolution metrics based on resolving cases before their due date, and the target is defined as achieving a minimum percentage of tickets resolved on time. If these types of metrics are not communicated correctly, they may lead the ticket-handling team to focus primarily on resolving cases before they expire, closing tickets as quickly as possible, while placing secondary importance on whether the requester’s need was actually resolved correctly.

Another scenario where this may occur is in project deliverable submissions. The team may focus on meeting delivery deadlines while leaving aside quality aspects and compliance with deliverable requirements. These situations may create the internal perception that resolution and delivery goals were achieved, while from the requesters’ perspective, the issue was not truly resolved correctly or the requirements were not actually met.

In the case of the cobra effect, this may also occur in the previous scenarios. For example, if some type of incentive is defined for Service Desk team members who meet the target percentage of tickets resolved on time, or for completing project deliverables on schedule. These types of incentives may further encourage practices where priority is placed on completing targets within timeframes while leaving aside the quality factor and the value delivered to the customer.

Another scenario where the cobra effect may arise is when incentives are offered for proposing actions that generate cost savings for the organization. This may cause people, in pursuit of receiving the incentive, to propose any type of action that effectively reduces costs but may also generate negative effects on the organization’s operations. For example, reducing the processing capacity of a cloud service will reduce the billing paid to the provider, but it may also generate impacts such as slowness or outages in the organization’s digital services due to insufficient processing capacity. This demonstrates that incentives aimed at efficiency or improvement proposals, if not managed properly, may become harmful.

The Adoption of ITIL Management Practices and Guiding Principles Can Reduce the Possibility of These Biases Occurring

Taking into account the Guiding Principles and following the recommendations of the Management Practices proposed by ITIL 4 can reduce the likelihood of these types of biases occurring.

The Guiding Principle of “Focus on Value” is vital to avoid this. The performance indicators that are defined must be aligned with the value proposition that the customer and/or service user expects to receive. This creates an evolution from traditional SLAs, which are technically focused on meeting or delivering outputs, toward a greater focus on XLAs (Experience Level Agreements), where indicators are primarily focused on the user’s real experience, meaning they measure the perceived value of service outcomes.

This can also be complemented by the Guiding Principle of “Collaborate and Promote Visibility.” Stakeholders must be informed about which indicators are being measured, what targets must be achieved, and what is truly intended to be measured through those indicators. In this way, people will clearly understand the objective of the indicators and will avoid a mentality of simply “measuring for the sake of measuring,” prioritizing quality and experience in achieving indicator targets rather than focusing solely on meeting deadlines.

This also applies when offering incentives for proposing improvement actions. Improvement actions received must be validated through a “cost-benefit” analysis from the perspective of the value they will generate and the potential adverse effects that may result from implementing the action. For example, in the previously mentioned scenario of reducing the processing capacity of a cloud service, the benefit obtained would be reduced billing from the provider, but the adverse effects could include dissatisfied customers due to platform slowness, delays in transaction processing, reputational damage, and even severe system failures. Therefore, from the perspective of the value obtained, it is likely that the cost-benefit analysis would conclude that the cost savings are not sufficient justification to approve this improvement proposal.

Governance as a Key Mechanism to Avoid the Watermelon Effect and the Cobra Effect

Governance is the key mechanism for preventing the watermelon effect and the cobra effect biases from occurring because it introduces structure, control, traceability, and alignment to real value in service measurement and management.

Governance is the mechanism through which an organization is directed and controlled. Proper governance will ensure that indicators are created in alignment with the value users expect to receive and not solely with a technical perspective by asking: Does this indicator reflect real value or only activity?

Governance also introduces separation of roles, where a first line is responsible for operations while another team is responsible for measuring indicators, thus preventing the same team from “controlling” indicator results and even manipulating them for convenience.

On the other hand, governance allows incentives to be aligned with results, requiring strong evidence to ensure that the improvement proposals being rewarded are the ones that truly generated valuable outcomes for the organization and are not superficial improvements that may even create more adverse effects than positive ones.

Effective Governance: Closing the Gap Between Reported Performance and Perceived Value

In conclusion, controlling performance through the measurement of performance indicators and providing incentives for proposing improvement actions are very positive practices in service management. However, if these measures are not adopted properly, they may generate biases such as the cobra effect and the watermelon effect. The adoption of ITIL best practices, following its guiding principles and supported by proper governance, can reduce the likelihood of these biases occurring and thus ensure that measurements are aligned with the value expected by the customer while rewarding improvement initiatives that generate a positive impact on the organization.

The true maturity of ITSM is not about having dashboards in green, but about ensuring valuable experiences and outcomes.

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