Nutopia Book Look: The Tyranny of Metrics
How metrics sometimes get you the thing you measure, but not the thing you need
I’m a big analytics buff, believe that ‘you get what you measure’ and have completed voluntary and extensive finance programs at Columbia Business School and the Corporate Finance Institute.
So you might say that I do enjoy the numerical side of business. But being a solid Gemini, I also recognize the more ambiguous side of things, and the other business maxim stating how ‘not all that counts can be counted.’
With both of these lenses, I dove into 'The Tyranny of Metrics', which, depending on your position on metrics, will be your worst nightmare, or the wake-up call you desperately need.
Muller comes out swinging with a clear message: your OCD with numbers, KPIs, and boxes checked is ineffective; it can be critically harmful.
He argues that chasing numbers as the sole aim of the business turns organizations into circus acts performing for metrics, not missions. Metrics can look good on paper but sometimes keep the organization pedaling in place or even veer it off a cliff. Enron and, more recently, Wells Fargo are mentioned as prominent examples.
This happens in public policy too. 'Teaching to the test' instead of striving for genuine learning is all too prevalent in schools. And defining kids that don’t do well as ‘disabled’ to drop them off the stats and boost scores is downright jarring.
And what about the tyranny of metrics in actual life and death? During the Vietnam War, US Secretary of Defense Robert McNamara embraced the ‘body count’ metric, stating that the more of the enemy you kill, the closer you are to winning. Today, you don’t need a geopolitical degree to know that that was a bad idea.
This relentless rat race to quantify everything, Muller suggests, isn't just misallocating resources, but also undermining trust, stifling creativity, and creating a one-size-fits-all mentality that doesn't fit many at all.
In the process, we lose sight of the things that count but can't be counted.
As with all normative business books, Muller naturally offers a way out of this numerical labyrinth. He pleads for moderation, relevance, and transparency in using metrics, urging us to remember that they're tools, not tyrants. They should inform, not dictate, our decisions.
Above all, he champions cultivating a trusting culture that values professional autonomy over imposed tick boxes. And he states that measuring should not replace judgment; instead, measuring always requires judgment.
I would have craved a bit of a deeper dive into how metrics, especially in the age of big data, can help us make better decisions, and where things like AI and statistical learning are beneficial.
The book was written in 2019, so the above topics were already timely. But as there are many books on those subjects, and with the book's topic being what it is, I think those are understandable omissions.
In short, 'The Tyranny of Metrics' is a sharp, timely critique that serves as both a cautionary tale and a roadmap for those brave enough to question the dogma of data. On a scale of 1 to 10, how ready are you to rethink your reliance on numbers?
Key Learnings:
Metrics fixation: Muller criticizes the over-reliance on metrics and Key Performance Indicators (KPIs) to assess performance, suggesting it often leads to gaming the system, distorting the institution's original purpose.
Unintended consequences: Metrics can have unintended consequences, leading to 'teaching to the test' or focusing on quantity over quality.
Cost and time: The gathering, analyzing, and managing metrics require considerable cost and time, which might be better spent on the core activities.
Public and private mismatch: Metrics developed for public accountability may not be helpful for internal management.
One size doesn't fit all: Different fields and roles have different requirements, and not all activities can be meaningfully translated into numerical metrics.
Action Points:
Strategic use of metrics: Metrics should be a guide, not a substitute for skilled judgment. Use them strategically and sparingly.
Relevant and purposeful: Ensure the metrics used are genuinely relevant to the outcome you want to achieve.
Transparency and dialogue: Be transparent about the limitations of metrics and promote discussion about what metrics can and can't capture.
Avoid gaming: Implement safeguards against gaming the system when metrics are used for performance evaluation.
Focus on culture: Cultivate a culture of trust and professional autonomy, reducing the need for external, imposed metrics.