With the world changing as fast as it is today, I suggest we need to look again at a number of notions that may have served us well in the past but may now be outdated or corrupted. In any case, they warrant a critical ‘second look’. And where better to start than with the well know prescription
“If you can’t measure it, you can’t manage it”
Where did this come from?
It is usually ascribed to Edward Deming (or, sometimes, Peter Drucker). Deming was an American statistician who rose to fame by helping Japanese manufacturing industry improve the quality and reliability of its product through concentrating on measures that enabled them to reduce variability.
But Deming didn’t actually subscribe to this at all!
Deming is often misquoted as saying, “You can’t manage what you can’t measure” but Deming realised that many important things that must be managed can’t be measured. He asked “Spend $20,000 training 10 people in a special skill. What’s the benefit?”, and answered “You’ll never know! You’ll never be able to measure it. Why did you do it? Because you believed it would pay off!”
In “Out of the Crisis” (p.121), Deming cites Lloyd S. Nelson, director of statistical methods for the Nashua corporation, “The most important figures that one needs for management are unknown or unknowable, but successful management must nevertheless take account of them.”
So what are the downsides of adhering to this prescription?
Gut feel, intuition, imagination all play a role in management, but today we tend to denigrate these elements and consider them less important than metrics. (As an aside, every business man is urged to do consumer surveys to measure the likely demand for new products and to then base his decision on the metrics. As is now well recognised, if Steve Jobs had thought that way we would not now have the iPhone, the iPad, and the iPod; products that, at the time, were beyond customers’ perceptions.)
There is more to management than simply measurement.
Question: What are the Upsides, and what the Downsides of uncritical acceptance of this management prescription?