Jeff Judy

Jeff's Thoughts - December 9, 2009

Of Measurement and Management

There is a popular saying in business circles that "you can't manage what you don't measure," and I certainly agree with the basic idea underlying that saying. If you never make the effort to see how you are doing, you have no way to apply the appropriate course corrections as you drift off course, or to fine tune processes, or even to take advantage of unforeseen opportunities.

But there is a school of thought that says the more precise the measurement, the better. And I'd like to suggest that a better guiding principle might be that the more frequent the measurement, the better.

I can't help but think of the PowerPoint presentations some young MBA's churn out, stuffed to the gills with charts and graphs and numbers. For sure, these analyses can provide a host of useful information

But they can also seduce you into tunnel vision, to the point where you only believe in, and monitor, things that easily cough up a nice, objective number.

I'd rather see management keep their eyes moving, working from a combination of objective and subjective indicators that they check frequently. It's a little like driving a car.

A lot of (bad) drivers lock onto one thing, usually the car in front of them, or a visual field that ends about 20 feet in front of their bumper. These are the ones you see driving right up to a car that is stopped or turning, getting stuck because they didn't give themselves enough information to take action. They only monitored one input.

The best drivers are constantly moving their eyes. They are checking objective measurements, for sure -- speed, warning lights on the dashboard, and so on. But they are also gathering subjective information, looking near and far, checking their mirrors, and making judgments about what other drivers are going to do.

And in many, many cases, those frequent assessments of other drivers' behaviors do more to keep them safe than, say, the reading on the speedometer. Subjective information, gathered regularly, is a powerful management tool.

Naturally, I encourage you to make those subjective assessments in a consistent fashion. (For instance, a performance evaluation of an employee is subjective, even though it is often expressed by numbers, but a framework helps guide the assessment approach.) A series of consistent subjective judgments can show important trends (the driver ahead of you who never signals turns) even if they will not generate a line graph or pie chart.

Of course, for some aspects of management, you can enjoy the best of both worlds, by developing systems that provide precise measurements that are easily checked as often as necessary. After all, the speedometer in your car's dashboard gives an accurate, real-time measurement of how fast you are going.

But few institutions have all the resources -- people, time, money, and knowledge -- to build precise, real-time measurement systems for everything that can help they manage their way to success

So don't be embarrassed to stir in some less formal, less precise assessments into your "management measurement mix," as long as you check them often enough to allow you to make adjustments before disaster strikes, or your opportunities escape.