Measurement Myopia

Posted on Jul 4, 2013 | 6 Comments

Here’s this month’s piece from neuroeconomist Paul Zak. For those who might dismiss some of our thinking as the “soft side” of management, Paul puts “hard science” behind it.

“If you can’t measure it, you can’t manage it.”

This maxim ranks high on the list of quotations attributed to Peter Drucker. There’s just one problem: He never actually said it.

Confession: I’m a numbers guy, and so I’ve always loved using this purported Druckerism. After rolling it out at a recent conference to emphasize the importance of measuring outcomes, Zach First of the Drucker Institute, who was also there, kindly informed me of my mistake—not only on the misquote, but regarding Drucker’s broader views on the subject.

The fact is, Drucker’s take on measurement was quite nuanced. Yes, he certainly did believe that measuring results and performance is crucial to an organization’s effectiveness. “Work implies not only that somebody is supposed to do the job, but also accountability, a deadline and, finally, the measurement of results —that is, feedback from results on the work and on the planning process itself,” Drucker wrote in Management: Tasks, Responsibilities, Practices.

But for all that, Drucker also knew that not everything could be held to this standard. “Your first role . . . is the personal one,” Drucker told Bob Buford, a consulting client then running a cable TV business, in 1990. “It is the relationship with people, the development of mutual confidence, the identification of people, the creation of a community. This is something only you can do.” Drucker went on: “It cannot be measured or easily defined. But it is not only a key function. It is one only you can perform.”

What a wonderful insight. When it comes to people, not everything that goes into being effective can be captured by some kind of metric. Not enthusiasm. Not alignment with an organization’s mission. Not the willingness to go above and beyond. True, a 360-degree review might pick up on some of these qualities, but often poorly.

This is why Drucker believed—and so do I—that conversations with colleagues are essential. The science backs this up. Expansive conversations and socializing can induce the brain to synthesize oxytocin, the “social engagement” molecule. When the brain releases oxytocin, we are motivated and internally rewarded to cooperate with others for a common purpose.

This is likely the neurochemical basis for that highly sought-after employee attribute: intrinsic motivation.

The goal of conversations (including, as I’ve written, during the annual-review process) is not only to understand the employee next to you, but the human being next to you.

So, measurement, yes. Only measurement, no.

Paul Zak is the director of the Center for Neuroeconomics Studies at Claremont Graduate University and the author of The Moral Molecule.

6 Comments

  1. Richard Straub
    July 6, 2013

    I would fully agree with Paul Zak. I would particularly emphasize that pure numeric measurements are not up to giving a clear picture of the contribution of a human being to an organization. To play a pure numbers game as many corporations do, even destroys human relationships and trust in an organization. In this way one can say “you get what you measure” – where measurement is an expression of mistrust in employees you will impact the social capital in the organization. Compensating and rewarding employees on their short term revenue performance will inevitably impact the level of collaboration between business units and so on. While numeric objectives are required, one cannot accept that they become the sole criteria to assess performance even though most managers love the simple yes/no measurements as opposed to think deep about the “whole person performance and contribution”. It is an important moment to discuss this – with big data and analytics as the new creed, many believe that those will provide the answers to all of our questions, even in the HR arena. A lot of intelligent debate will be needed to fully understand their impact and to use them in the right way.

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  2. john wright
    July 10, 2013

    Hear, hear you can’t put a ruler to true service and it is not on the daily “you got to get it done” list.

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  3. Analytics Have Their Place…It’s People That Matter
    July 16, 2013

    [...] But for all that, Drucker also knew that not everything could be held to this standard. “Your first role . . . is the personal one,” Drucker told Bob Buford, a consulting client then running a cable TV business, in 1990. “It is the relationship with people, the development of mutual confidence, the identification of people, the creation of a community. This is something only you can do.” Drucker went on: “It cannot be measured or easily defined. But it is not only a key function. It is one only you can perform.”…More at Measurement Myopia – The Drucker Exchange – The Drucker Institute [...]

    Reply
  4. Carnival of Quality Management Articles and Blogs – July 2013 | The world is too small? or Is it?
    July 20, 2013

    [...] have a quite telling article by Paul Zak – Measurement Myopia, and this what he has to [...]

    Reply
  5. Bernard Rosauer
    August 30, 2013

    My perspective is that we manage to influence the way things emerge. We know that most emergences are made up of relatively simple ingredients that combine to form an experience that is rarely measurable yet often quite important. ‘Culture’ is an emergence that is not measured but is experienced in one way or another by all employees, business partners, and customers. I highlight all this and the three key ingredients in a white paper called Three Bell Curves. Free download at http://WWW.ThreeBellCurves.com. if you read it, I would be happy to listen to your feedback.

    Reply
  6. Scott Pemberton
    November 11, 2013

    Thanks very much for your valuable insights. But if Drucker didn’t say it, who did?

    Reply

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