Unmeasurables

We all understand the need to measure; to take decisions based on facts, on hard data and the analysis thereof. Businesses increasingly frown on using intuition, gut instinct, emotional intelligence or feel. These are "soft" metrics. The desire is that decisions are documented, justified, and based only on hard (data based) metrics. From here decision processes can be strictly controlled, delegated, checked, measured ( vs. hurdle rates for investment). Sounds familiar right? No one can argue with hard data measurements - they are the basis of logic.

But what about soft metrics? The issue is this. Whilst many things can be measured, some cannot. It is harder to find data points for strategic value, competitive instinct, behaviours, cultural values, indirect consequences, reputational impact etc etc.

Data devotees, analysts and finance folk will try their damndest to try and turn soft into hard. By assigning numbers and scales, by developing metrics. If this becomes impossible, then if you can't measure it, then is probably not important. However, the soft things can be just as important as the hard data.

In team sports (e.g. football) data is king. Moneyball rules. performance, health, positioning, running, passing - all tracked, measured and capable of telling the story by data. Quite right, we can all remember signings that were made before the age of data analytics that sucked. The new signing just didn't work. However, every football manager will also tell you that they place as much emphasis on the personal characteristics of the potential signing - are they of good character, settled, kind, leaders and good team players. Or are they selfish, grumpy, disruptive, contrary, Hard data can't help with any of these - however they are important (previous blogs discuss the "no dickheads" rule to hiring where hard data does not always predict poor or toxic behaviours)

Making decisions is difficult when facing incomplete, insufficient or unreliable hard data (which is most of the time if we are all honest) or, where softer more subjective issues significantly impact the decision (again, more often than the aforementioned number-biased folk care to admit)

There has been times where I have made decisions based on emotion, gut feel or competitive instinct - always in the pursuit of doing the right thing for the business. Often without full data, in time sensitive situations, or because I knew that the pursuit of data alone would lead to wrong/poor quality outcomes. It is a skill, based on knowledge, experience and awareness.

Likewise, I have seen decisions made where soft non-measurable considerations lead to poor outcomes. Either because no-one gets it right all the time (aka "shit happens") or because the decision maker overestimated his ability to apply gut instinct and intuition when applying soft decision skills in preference to assessing hard data (we all know examples of this as well)

It's a challenge.... where good outcomes are pursued, but control can be lost. However, brilliant "outside the box" thinking cannot be totally discouraged.

It's not "either/or": hard or soft metrics; hard data or gut feel. Decisions need to blend both hard and soft in varying degrees. Rory Sutherland, marketeer, author, speaker and vice Chair at Ogilvy UK often tells the story of bees and their "waggle dance" (you can look it up) to illustrate this point. Following the bees example - most people should be busy following and repeating the set process based on hard data to achieve the day job (improving efficiency, productivity, yield etc). However, there should remain a small minority that simply do the opposite and search for new or future value outside the vicinity of the day job - less rules, less process, more prospecting. For an organisation to thrive, most of the former ( hard data / set process) should be successful. Thus delivering the "now" objective (revenue, profit etc). Some, but by no means all of the latter group (prospecting with soft metrtics) might be sucessful in finding furture opportunities or new products or revenue streams - but finding the next "thing" is important. The former follow good data driven process. The latter following instincts to search for "tomorrows" good business.

Organisations need to deploy both hard and soft metrics and thinking. It's a balance. Never totally data or process led. Rarely, relying only on soft metrics/skill assessments.

Great leaders must always keep in mind the unmeasurables to survive in the long term.