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In the sixteenth century, a new word appeared in English dictionaries—pantometry, which means universal measurement. Ever since, humans have been obsessed with counting things, from people and sheep to the amount of cars imported and the number of McDonald’s hamburgers served. Being able to count and measure is another one of the traits separating man from animals.
The problem for the pantometrists is the same one facing businesspeople today: what should be measured? Facts and figures do not provide a context, or reveal truth; we still need our imaginations and creativity. If everything important has to be quantified to be comprehended, how are we to understand art, music, poetry, literature—indeed, our own human feelings?
Statistics can certainly pronounce a fact but they cannot explain it without an underlying context or theory. Numbers have an unfortunate tendency to supersede other types of knowing. The human brain is capable of assimilating literally thousands of pieces of information, from facial and body expressions, inflection, and tone of voice to experiences and intuition, to draw conclusions. This is why juries are instructed to judge the guilt or innocence of a defendant based on concepts such as “beyond reasonable doubt” or a “preponderance of the evidence,” not to precisely measure their verdicts.
- We work in an Intellectual Capital economy, not an Industrial economy or service economy, and why that difference is critical.
- Determine why the traditional metrics of efficiency—which are over a century old—are no longer relevant to measuring the effectiveness of intellectual capital.
- Identify the perils of Pantometry: Counting for the sake of counting.
- Recognize the critical difference between a Key Performance Indicator and a Key Predictive Indicator.
- Determine how to combine a theory with a measurement for maximum understanding.
- Recognize Managing by Results versus Managing by Means.
- Identify the ramifications of Boyle’s Law: “When you use numbers as the basis for payment, they become irrelevant to the broader objectives of the service.”
The Seven Moral Hazards of Measurements:
- We can count consumers but not individuals.
- You change what you measure.
- Measures crowd out intuition and insight.
- Measures are unreliable.
- The more we measure the less we can compare.
- The more intellectual the capital, the less you can measure it.
- All measurements are lagging, equivalent to timing your cookies with your smoke alarm.