You'll have heard the saying, “If it doesn't get measured, it doesn't get managed”. But you may not have heard it recently, and if you have, it might have been delivered in an ironic tone. Metrics-obsessed management is associated with an uptight, wood-for-the-trees mentality. Measurement calls to mind “scientific management”, time-and-motion studies, behemoth organizations operating in long-gone environment where little changed year after year.
It's true that business saw an injection of creativity in management practices once the baby boomers took over the big desks. And people who stick to a measurement-driven approach get labeled as bean counters. However, my thesis is that we need bean counters because beans count. There's more to management than measurement – but measurement runs through management like connective tissue.
The things we care about in business are often abstract qualities: benefit, quality, risk. Yet unless we turn these abstract notions into concrete measurables, we can't tell whether or not we're achieving them, or how much they're costing us. The insurance industry is built on the reduction of risk to credible variables. For countries with socialised healthcare, measures of quality-of-life must be used to decide on treatment priorities. While it can be misleading and offensive to seek dollar values for abstract qualities, we do need to apply some kind of measurement system.
Business measures don't have to be designed with absolute scales. You can apply measurement – and thereby management rigor – to any area of activity with a small set of relative indicators. This is why our opinions as consumers are queried by categories such as “strongly agree”. How do we know if our customer service is getting better, for example? A simple start is to ask customers whether they'd rate their just-completed encounter as better than, worse than or the same as their last encounter with our organization.
If we're not measuring, we're not managing. I'll come back to the dangers of measuring the wrong things in another post.
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