Most business decisions are driven by hard data. A business model with an XY axis assumes that you have measurements that enable you to plot things on the graph. A SWOT analysis assumes that you can score your strengths and weaknesses and the opportunities and threats in order to place them in the grid. A brand audit has a range of brand attributes that require a measure.
We are obsessed with measurements. Management guru, Peter Drucker, says "What gets measured gets managed.” This isn’t a new philosophy. In 1883, William Thomson (Lord Kelvin to you and me) said:
“When you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meagre and unsatisfactory kind: it may be the beginning of knowledge but you have scarcely, in your thoughts, advanced to the stage of science.”
The implication is that “what gets measured gets done”. It gets done because we can keep focused on key indicators and see if they are improving. Without measurements we are working on gut feel. Even the gut feel can get measured. We are fixated on Net Promoter Scores. They are useful but, we've all felt the frustration of giving something a score out of 10 when in reality things aren’t that consistent and your assessment varies. Explaining the reason for the score can be much more revealing. “Why?” is the most important question of all.
Peter Drucker, the aforementioned guru who wants to measure everything, is also cited with saying that "culture eats strategy for breakfast". He acknowledges the powerful influence of soft factors such as culture.
An organisation that measures everything can be dispiriting. Measurements become benchmarks and goals. In the early stages of a customer satisfaction tracker it is motivating to see the needle move in the right direction. It can be difficult to maintain the motivation when the organisation is running at near to perfection. Customer satisfaction scores that reach an average of 8.5 out of 10 tend to stick around that figure and people can get bored with the “same old, same old”.
What does this mean for management? Leaders must recognise the importance of soft factors. Of course it is possible to attribute a score (a hard figure) to a feeling but how reliable is this? You can’t measure love. Sometimes intuition is just as important as measurements. The best leaders have the right balance between hard and soft. Who said management is easy - it's hard!