Monday, 7 September 2009

On the subject of Data and Numbers

"The Gross National Product includes air pollution and advertising for cigarettes, and ambulances to clear our highways of carnage. It counts special locks for our doors, and jails for the people who break them. The GNP includes the destruction of the redwoods and the death of Lake Superior. It grows with the production of napalm and missiles and nuclear warheads. And if GNP includes all this, there is much that it does not comprehend. It does not allow for the health of our families, the quality of their education, or the joy of their play. It is indifferent to the decency of our factories and the safety of our streets alike. It does not include the beauty of our poetry or the strength of our marriages, or the intelligence of our public debate or the integrity of our public officials. It measures everything, in short, except that which makes life worthwhile."

A quote from a man with far greater wisdom than I can ever hope to have and one who suffered the fate so often meted out to visionaries: assassination. Robert Kennedy recognised a truth we would be well advised to recall today: The things we think are 'hard facts' like data and performance measures frequently lead us to misleading interpretations, mistaken assumptions and flawed decisions. If a measure of our success or 'progress' such as GDP (GNP in RFK's day) can include so much that we would otherwise consider an indicator of 'bad' performance, what other headline or compound measures of the performance of our organisations do we interpret so simplistically? For example: Does a rise in the number of our staff indicate growth? Does a comparative fall in profits over a previous year indicate weakness in our business performance? Does a rise in share price commensurately indicate strength?

I hope you have a full set of 3 'no' answers - or at least 3 x 'not necessarily'.

Have a look at the top-level performance indicators you use to judge success.

Are they as potentially misleading, simplistic and inaccurate as GDP?

What indicators would give you a truer qualitative picture of your performance?

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