In an article titled The last thing your business needs is more metrics, Alastair Thomson writes about metrics obsession: when the cost of measuring exceeds the cost of doing.
He recalls working for a company with a huge bureaucracy. « Every metric had a manager somewhere who was responsible for that particular measure across all the divisions of the business, who in turn reported in to someone pretty important in the Head Office management structure… I reckoned the costs of measurement and reporting was possibly the single biggest cost the business had, even though resources were being starved from the front line at the time on the grounds of “cost pressures in the business”. »
« What would you rather have – £500,000 spent on measuring the recruitment of women and ethnic minority candidates into senor level posts or £500,000 spent giving women and ethnic minorities within the business the training, support or coaching they might need to be a credible candidate for the next senior role? Which one is more likely to create the positive result you’re looking for…measuring it or doing it? »
« When I tell this story to business leaders, I’m often told that they could never do things the same way because they can’t trust their people enough to operate without lots of reports and meetings… Seems to me the solution to that problem is entirely in their own hands. Hiring people you can’t trust doesn’t sound like the smartest recruitment decision I ever heard. »
« “Oh, but the people we could trust are too expensive,” people sometimes respond, “so only have the budget for entry-level people.” Again, the solution is in the hands of leaders. Running the business on cheap labour is often the most expensive way to run a business. »
« Metrics won’t give you trust… The problem with metrics is that smart people try to game them, and dumb people try to achieve them. »
« And if you think this is just my own personal opinion, no less an authority than Dr W Edwards Deming, the father of modern quality control, had as part of his famous 14 Principles “Eliminate management by numbers and numerical goals, Substitute leadership.” »
Thomson’s frustration with metrics-run-amok is shared by Jerry Z. Muller, author of The Tyranny of Metrics by .