The Tyranny of Metrics

Author: Jerry Z. Muller

We live in an age that puts metrics up on a pedestal. Every business is ultimately measured by its financial metrics. Internally, the business is run by a host of metrics that are expected to be an early gauge on the business performance. Recent advances in computing have provided us with a treasure trove of Big Data that from which we mine even more metrics than we can imagine.  Where does all of this lead? According to the author, Jerry Muller, “we have gone from measuring performance to fixating on measuring itself”. He argues that this has resulted in a tyranny of metrics that is misguided and leading many of us down the wrong path.

There are numerous quotes in the book on both sides of the metrics aisle. It starts with a statement that is apparently mis-attributed to Lord Kelvin: “If you can’t measure it, you cannot improve it”. 

He tackles several disciples ranging from Education to Policing. He explains how Pay-for-performance is notorious for encouraging all kinds of metrics manipulation. In Vietnam, the enemy body count was a key metric that the US used to determine success in the war. These counts were often exaggerated and sadly many US soldiers lost their lives searching for bodies.

Here are some nuggets from the book that are very relevant to our role as managers. 

A system of measured performance will work to the extent that people being measured believe in its worth.

Some things to keep in mind

• misalignment of metrics will most certainly be counter productive.
• metrics to evaluate performance and promotion are some of the most dangerous
• metrics are more effective if they are developed by someone close to the activity being measured
• more measurement means more costs in measuring and evaluating data, resulting in lost productivity
• metrics work best when those measured buy into its purpose and validity.

I found the book to be a good cautionary tale to all of us who swear by the metrics we keep track of.