You Can Only Measure 3% of What Matters

I read that quote in The Fifth Discipline, a book I’m reading now.

How true. I track my activities pretty intensely and always try to focus on how I will measure the outcome of some task. Sometimes it’s as easy as, "What will success look like for this?"

The problem is not everything is easily measured. I recall a conversation I had on a train in Florence with a school teacher and we got into a long conversation about education. My big takeaway was, "How do you measure the effectiveness of schools?" There are a million criteria you could use.

In general, I think we have a tendency to discount intangible benefits in a traditional cost/benefit analysis. For example, when a start-up tries to recruit a new CEO from a large corporation, it can be hard to articulate the intangible benefits of running a start-up: few people to manage, total flexibility on scheduling, no bureaucracy etc. Unfortunately, these intangibles are often dismissed in compensation discussions because they’re not as easy to measure as "$10k more in comp," even though I would argue these intangibles contribute more to quality of life than a few thousand extra dollars.

On a related note, Tom Peters just posted a nine minute audioblog on metrics which I found quite engaging and he notes that "metrics are essential but useless". It’s what you do that matters, not how thoroughly you track what you do.

One Response to You Can Only Measure 3% of What Matters

  1. I also read the Fifth Discipline… my systems thinking professor reccomended it. Amazing book!

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