Not knowing is, probably, the worst thing an IT executive can have happen. Not knowing how your team's time is being spent, not knowing what projects are succeeding or failing, and even something as seemingly arbitrary as not knowing how happy your team is can sink your organization. This article by F. John Reh discusses what measurements are important to an organization, how to gather them, and what to do with them for analysis:
Measure those activities or results that are important to successfully achieving your organization's goals. Key Performance Indicators, also known as KPI or Key Success Indicators (KSI), help an organization define and measure progress toward its goals. They differ depending on the organization. A business may have as one of its Key Performance Indicators the percentage of its income that comes from return customers. A Customer Service department may have as one of its KPIs the percentage of customer calls answered in the first minute. A Key Performance Indicator for a development organization might be the number of defects in their code.
But Reh goes beyond just explaining how to collect good metrics: he explains when to share those metrics with your team. Do you see improvement? Be sure to share that information with your team, your boss and your stakeholders. People like to know when things are improving, and keeping that information to yourself is only getting half of the benefit from it!