The Duel of the Physicists

Peruse any forum on business and sooner or later, you will find a discussion on the value of metric-based performance appraisals. Almost inevitably, you will also find a reference, attributed or not, to Lord Kelvin’s famous dictum, “If you can not measure it, you can not improve it.” (Here’s one example: Metrics, metrics, metrics. “If you don’t measure it, it won’t happen.”) Finally, you’ll also probably note that the discussion’s initiator heavily favors measuring. In my example, the next lines read, “Do you believe that every department/function and employee should have measurable goals? Can you share your successes?” Quite possibly, because of this aphorism, Lord Kelvin is better known to managers than physicsts.

Now consider Albert Einstein. True, he wasn’t a “Lord”, but surely his various other achievements compensate for this deficiency? He said, “Everything that can be counted does not necessarily count; everything that counts cannot necessarily be counted.” As managers and students of management, if we must turn to physicists for insights, can we not cite him with equally often? We don’t and this is sad, for we need this particular insight very, very badly. Consider just two examples:

In a world in which most businesses rely on others for core products and services, as a manager you rely on work done by people you don’t know, who work for other companies with different goals, cultures, and risk tolerances. Here, you have two choices: You can base your hopes for a mutually beneficial relationship on tightly structured, measurable Service Level Agreements that your teams of lawyers can help enforce. Or, recognizing that if you have to rely on lawyers to enforce the relationship, you can’t possibly succeed at it, you could choose to invest in building a a level of mutual trust (which you could never measure) which would smooth the imperfections of your “good enough” SLA.

How about innovation? How many of the greatest products or services you use today (or those that were used in the past) were created in workplaces that operated under the philosophy, “If you don’t measure it, it won’t happen?” Some of the most innovative workplaces of the world have long given employees free “off the clock” time and free resources – and benefited from the results of the unmeasured, untracked tinkering they did.

One and even two generations ago, the doyen of quality, Edward Deming, tried to use statistics to convince managers that measuring the performance of individuals often made no sense. Most weren’t willing to consider this advice. Now they need to follow it more than they did then. (And no, Google’s recent efforts, to which I will devote a separate post soon, doesn’t obviate this opinion.)

Metrics and measures have a place in business, just not a central one. A manager who firmly ascribes to “If you don’t measure it, it won’t happen” will most likely make sure only one thing will definitely happen: he/she will be outperformed by those who understand that at the very least, not all statements about physics should be applied to management, and more correctly, management is most definitely not physics.

Category: Business Tools, Leadership | Tags: , , 3 comments »

3 Responses to “The Duel of the Physicists”

  1. Kailas Mote

    I liked your views about “If you cannot measure it, you cannot improve it”. However, I do not agree with you on the part that managers who firmly ascribes to this belief will be outperformed by others.

    In my opinion, in management, you can achieve only if you can measure it. Many organizations have adapted this philosophy successfully and hence the management tools such as Six Sigma and Balance Scorecard are becoming the constituent of the corporate strategy. The well know example, I would like to give, is Motorola. Motorola adapted Six Sigma to improve its performance, which it did using that tool. Motorola is also successfully using the Balance Scorecard to define and achieve the targets and more importantly to measure the performance.

    I think metrics are the central part of the management.

  2. Amit Mukherjee

    First of all, thank you for writing. I regularly meet people who say “I was reading your blog …” but they never contribute to it themselves!

    I understand your perspective; I think we differ on one issue alone: whether everything needs to be measured in order to be improved. Six Sigma, almost by definition, applies to things which can be measured and it is a great tool for those. My concern is that too many managers ignore things which cannot be — or are very hard to — measure and in doing so, they can trip up. Motorola is doing well with Six Sigma (which incidentally, they — not GE — pioneered among American companies with a product called the “Bandit Pager” in the 1980s) and the Balanced Scorecard, but it is still way behind Apple, a company in which Steve Jobs’ opinion matters more than objective measures. Jobs has an uncanny knack of understanding consumers far better than any insight voice-of-the-consumer measurements would produce. The “Stages of Knowledge” concept (which you’ll appreciate, though most other readers of this blog won’t) broadens this argument: many (critically important) things are at low stages and defy measurement – but good managers work to improve them.

  3. Kailas Mote

    Hello Prof Amit,

    Thanks for the reply.

    Yes, whether everything needs to be measured is arguable.

    However, I do agree with your views on the Apple’s strategy and Steve Jobs’ insight about consumers needs.

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