Have you been ill and had a temperature lately? You probably compared your temperature to “normal” which you were taught for years was 98.6 F. Wrong. The correct human body temperature is closer to 98.25F (and that is an average, because there are variations from person to person). The 98.6F reading was developed in 1868, when Carl Wunderlich published a seminal paper on body temperature in 25,000 adults. But his study was done using imprecise measuring devices and techniques of that era, yet it has been widely accepted over 100 years.
Modern measurements and improved research has confirmed Wunderlich’s error, yet many people, and even doctors, still cite the wrong “normal” temperature. And even now, measurements taken incorrectly can yield the wrong temperature. Considering how many medical decisions are made based on this metric, it is downright amazing that this error has not caused huge problems. Or maybe it has, and we just don’t know it.
When the metric or the measurement is wrong—trouble is not far behind.
Have you even used a map that was not to scale and been confused by the distorted perspective it gave you? Have you owned a car with a speedometer was wrong—and you got a ticket for speeding without realizing you were speeding?
Does anyone doubt that one of the major causes of the recent financial collapse was the erroneous ratings given to investments by the ratings agencies like Moody’s, S. & P., et. al? Investments that turned out to be worthless were rated AAA—the top rating. No wonder the crisis became so bad, so fast. When metrics are wrong, what do you trust?
If you read today’s news, it talks of unemployment at near 10%. Using one measure (the Bureau of Labor Statistics U-3), that is correct. But that measure excludes millions who have given up looking for a job or who are grossly “under-employed.” That number is closer to 17% (BLS U-6). The government statistics are also “adjusted” or “revised” a month after being issued, because the initial measure was wrong. What can you believe?
Many years ago, I suffered a great embarrassment when telling a customer proudly about how good our service level was. He told me bluntly, that based on the way they measured it, we were terrible. What a shock. What a revelation. I should have asked that customer how they measured our service before bragging about our service and being embarrassed. Now I know better.
It has been proven time and again that simply observing something causes it to change. So does measuring it. Heisenberg’s Uncertainly Principle in physics warns us that two related things cannot both be measured accurately, simultaneously. Clearly this whole measurement concept is not simple or easy, but measurements are still very, very important. They help us assess progress, know how we are doing, and even let us know what is, or isn’t “success.”
What can we learn from these examples?
When a measurement is done wrong, or measures the wrong thing, or somehow, because of error, provides the wrong result, it is seldom recognized until later (like the government’s revisions). In the meantime, we make decisions based on that measurement—wrong decisions usually. Investors react and often over-react, to government reports on employment, on GDP growth, on the balance of trade, and so forth. Markets soar or plummet from these reactions. And then, 30-45 days later, a revision comes along that says, in effect, “Whoops, we got it wrong.” The same happens everyday in business, in government, and in life.
Now we know—plan measurements and metrics carefully
“Forewarned is forearmed,” or so the old saying goes. The most important message of this brief article is to make sure the metrics you choose are measuring what you want to measure—and doing it accurately (to the best level possible.) Carpenters are well aware of the admonition, “Measure twice, and cut once.” There are ways to verify most metrics and the results they yield. The first is to apply “common sense.” Is that result reasonable? Another is to find historical comparisons. A third is by a “check point” or a reference standard.
For many years, factories and industries kept “standards” in the form of physical objects that had been carefully verified to be correct. The U. S. government even established a “Bureau of Standards.” They did this because gauges and measuring devices can be damaged or simply get out of adjustment. If you weigh yourself, and don’t believe the reading, you usually look for another scale—but make sure it’s an accurate one.
Time for the world is kept on very precise atomic clocks and is called “coordinated universal time” (UTC) and often referred to as Greenwich Mean Time or “Zulu” time. Since communications signals cross many time zones, an accurate, standardized measure of time is critical. There are many other places where critical measures of time, mass, and distance are important: in precious metals or expensive gems, in health related measurements involving vital organs, and on and on.
Somewhere, somehow, all metrics need to be checked and rechecked regularly. Whatever you are doing to meet or to use, some predetermined metric, stop every now and then and check to see that the metric is accurate—and the right one—that it is measuring what is really important. If you base decisions on the right measurements, used correctly, you will be surprised how much better your decision-making becomes.
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About the Author: John L. Mariotti is President and CEO of The Enterprise Group. He was President of Huffy Bicycles, Group President of Rubbermaid Office Products Group, and now serves as a Director on several corporate boards. He has written eight business books and a novel and has been a conference keynote speaker, a radio talk-show host, and a multi-national columnist for IndustryWeek, Management Centre Europe, the American Management Association, Fortune Small Business, Tiempo de Mercadeo, and a contributor to Business - The Ultimate Resource and the Encyclopedia of Health Care Management. His electronic newsletter THE ENTERPRISE is published weekly. His Web site is The Enterprise Group.
