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Understanding measurement madness

Wed, 18th Apr 2018

Modern-day management is subject to several debilitating diseases, but the most damaging and pervasive may be the measurement fetish. As Jerry Z. Muller puts it in his new book The Tyranny of Metrics, we don’t just live in an age of measurement – ‘we live in an age of mismeasurement, over-measurement, misleading measurement, and counter-productive measurement’. Despite the manifest and mounting costs of measurement failure, there’s no sign of the fetish diminishing; if anything the reverse.
The first reaction on reading Muller’s concise and non-strident study is relief: we’re not actually alone, or mad, to believe we are surrounded by measurement madness. As Muller confirms, it is rampant in public and private sector throughout the US and UK, the chief subjects of the book, and its unintended consequences – distortion of purpose and effort, fake figures, short-termism, discouraged risk-taking, innovation and cooperation, burgeoning bureaucracy, degradation of work and worker demoralisation, and costs both direct and indirect – are the same, equally huge, and equally disregarded, everywhere. As Muller remarks: ‘A question that ought to be asked is to what extent the culture of metrics – with its costs in employee time, morale and initiative, and its promotion of short-termism – has itself contributed to economic stagnation?’
Leading on from the first, the second reaction is a mixture of stupefaction and rage: in view of the evidence, including ‘a large body of literature’ dealing with, say, the problems with goal-setting, pay for performance (P4P), and performance rankings, why does this dysfunctional obsession persist and even grow, spreading like a virus from the source of infection in the US and UK to the rest of the Anglosphere and thence to other countries in Europe and the rest of the world?
Muller attempts to answer this question. ‘In a vicious circle,’ he writes, ‘a lack of social trust leads to the apotheosis of metrics, and faith in metrics contributes to a decling reliance on judgment’. He shrewdly notes that a metrics of accountability appeals equally but for different reasons to both the political right and left – the right being suspicious of public-sector empire building and protectionism (Yes, Minister, public choice theory), the left from the 1960s onwards distrusting authority and being convinced that leaving things to experts was to limply accept the prejudices of established elites. Both wings therefore wanted to make institutions more accountable and transparent, ‘using the purportedly objective and scientific standards of measured performance’, while the institutions themselves had no choice but to use similar performance data to defend themselves.
These tendencies were turbocharged both positively and negatively by related developments on the business front, where growing distrust of managerial motives led to the recasting of management into a system of goal-setting, monitoring and incentivisation, all dependent on standardised measured performance. New Public Management applied the same principles to the public sector, supplemented by consumer choice theory which held that giving people the right information to make rational choices was the basis of economic democracy. When this didn’t work (as it couldn’t), the response was not to change course but to try harder, using technology to measure more things and invent new rules about how to do it, giving another savage twist to the measurement ratchet.
The massive irony is that the choice of measures may be the most important thing that management does. And that being so it is subject to measurement’s all-powerful Catch-22: the point of measurement is assumed to be to supplant fallible human judgment and thus enable better decisions; but the choice of measures itself requires human judgment, and without it measurement is actually worse than useless – it misleads and hides the real situation, both from management and everyone else. This is why no one knows the real demand on the NHS or social care, for example; why politicians are puzzled to see services that win stars and plaudits from regulators and inspectors getting a resounding thumbs down from their constituents; and why none of the figures reported by the public sector – whether schools, universities, medicine or the police, all covered in the book – can be relied on.
The truth is that today’s metrics fixation has produced a culture of gaming and manipulation worthy of the Soviet Union – a resemblance that Muller does not fail to observe: ‘Just as Soviet managers responded by producing shoddy goods that meet the numerical targets set by their overlords, so do schools, police forces and businesses find ways of fulfilling quotas with shoddy goods of their own: by graduating pupils with minimal skills, or downgrading grand theft to misdemeanor-level petty larceny or opening dummy accounts for bank clients.’
In the age of Big Data and the gig economy where tasks are measured by the second, it is hard to see the measurement obsession diminishing any time soon. It’s not that the alternative to dysfunctional measurement  – choosing measures that relate to purpose and that support rather than degrade professional judgment – is conceptually or practically more difficult; it just requires a different kind of thinking (and an implicit admission that previous methods were wrong) – which is why companies that model the alternatives are treated as one-off curiosities rather than exemplars to emulate.
But as a sobering reminder of how far we have strayed from the ideal of minimal (self-)management ideal, consider the example of the Medical Research Council’s Laboratory of Molecular Biology in Cambridge. The most successful biological research lab in history, the LMB was set up after the war by Max Perutz, who had arrived in the UK in the 1930s as a penniless refugee from Vienna. Recognising that creativity, in science as in the arts, can be fostered but not organised, still less planned, since it arises from individual talent, Perutz saw his task as removing anything that got in the way of his recruits following their desire to do the best possible science. (Compare with Peter Drucker's rueful observation that 'So much of management consists of making it difficult for people to work.') Lab administration was kept to a bare minimum: ‘No politics, no committees, no reports, no referees, no interviews – just highly motivated people picked by a few men of good judgment,’ as pharmacologist Sir James Black, another Nobel prizewinner, described it. The result of this recipe for anarchy? Not surprisingly, the lab became a magnet for scientific talent, and while the MRC may not have got much paperwork from Perutz in return for its cash, by the time he died in 2002 it had chalked up the extraordinary total of nine Nobel Prizes, four Orders of Merit and nine Copley Medals (the highest honour from the Royal Society). London Business School’s Jules Goddard comments that Perutz deserves to be feted as much for the brilliance of his management as for his scientific example.


 

 


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User comments

Paul Reading :: 19th Apr 18
Now that's another book I have to read! Thanks Simon, you pointed me to John Seddon years ago and you continue to provide ideas,
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