Q3. Dashboard, Numbers, Metrics, CTQs, are commonly used terms in the domain of Business Excellence. Here are conflicting views by two Management Gurus - 

 

Quote

"If you can't measure it, you can't manage it" - Peter Drucker. 

 

Quote

"It is wrong to suppose that if you can't measure it, you can't manage it. The most important numbers are unknown and unknowable" - Dr. W. Edward Deming

 

 

What is your view on this? Is measurement essential for good management? Why? Why Not?

What did Edward W Deming mean by his statement? 

 

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CTQ and Matric:

 

CTQ is a factor that is supposed to be critical to achieve the required quality, where as Matric is connected with measurements.

 

Measurement is not essential for a good management. 

Bcz, a good management is nothing to do with only measurement. There are a lot of things we cannot measure, for example motivation cannot be measured whereas it is one of the important catalyst for successful business. 

 

It is right approach, right intentions, empowerment are some of the important areas to be considered for a good management.

 

what Dr. Edward meant I believe is that, not everything in life can be measured and business is not different from life. Hence it is not fully true that everything that cannot be measured cannot be managed.

 

Actually, a good management can still be made exist with out measurement.

Measurement is a mere not a high level compared to human intentions, Good team work, and so on.

 

 

As per the quotes:

If you can measure it you can manage it.

It is wrong to suppose that if you can't measure it , you cant manage it. The most important nos. Are unknown and unknowable. 

View: 1st quote by Peter Drucker is a direct statement which simplifically says that if you have known facts and figures you can manage the situation.  

The quote is not a contradictory to the other one. However, as per the other quote,what if the fact and figures are not known or unknowable, the quote by Dr Deming is an indirect one which states that sometimes the data remains hidden or discreet. To measure and manage the situation we can always have analytical methods to take out the hidden fact and figures. 

Now, as both the quotes are equally valid it can be said as measurement is always essential for good management.  Without measurement or analysis, facts and figures will be unknown, we cannot act on what is right. In organisation there are several CTQ, some may be on priority. So to manage it is necessary  to know the CTQ. 

Measure and manage is always a efficient method.

 

Edited September 6, 20178 yr by Mr. Abhijeet
Punctuation error

Measurement is required for a good management but to approx. Or nearest to real. Exact measurement cannot be made in every situations specially in situations which changes from time to time.

Edward W Deming mean by his statement - He believed in the value of using data to help improve the management of organisation. But he also knew that it wasn't enough.There are many things that can not be measured and still must be managed.

He meant that it is not always necessary that one can not manage without data, as it will not be available everytime to measure. We need to manage systems even if we cannot collect data as the most important figures are unknown or cannot be Known: 

Example: Return on investment from sending an employee to training (Here we know that issues can be managed/ improved by sending an employee for proper training to brush his knowledge and skills. And we cannot measure to what extent mistakes will be improved prior to training. We can just say it will improve.

 

My view - Measurement is not always essential for having good management as there are many things that cannot be measured and managers still have to make decisions about it.

Also to justify more "3% of the problems have figures,whereas 97% of the problems do not have figures". 

Also its not always necessary that the management techniques that one gets with data will be accurate. Some time it needs more logical thinking beyond the data that is available.

Performance measurement is the process of collecting, analyzing and reporting information regarding the performance of an individual, group, organization, system or component. One of the most important aspects to be considered in relation to performance measurement process is that the performance measures work qualitatively to provide the useful information about products, processes and services that are produced in a business. Hence, implementing performance measures is a great way to understand and manage and improve what a a business organization does.

The measurement of performance is a continuous process which involves checking the performance against the standards that have been fixed to be followed. It leads to compare the actual performance with the established standards. A manager needs to supervise, observe and control the activities of his subordinates while he is involved in studying various summaries or reports, so that he may manage the work in an effective manner getting the things accomplished in a desirable manner. It requires the manager to constantly check the performance in order to take corrective actions in case of deviations ensuring that such deviations do not occur gain. Thus the Performance measurement is an ongoing, continuous improvement operation.

 

“If you try to control everything, you may end up controlling nothing.”

 

The importance of performance measurement system lies in the fact that it not only improves the performance, but also the productivity of a business entity by reducing costs. It is a good way to align the activities with the plans being established. It provides necessary feedback that the activities may be guided accordingly by allowing managers to implement best practices. It may thus be said that performance measurement process is a great way to understand, manage and improve the overall functioning state of a business organization. If done effectively and efficiently, it drives success in business definitely.

We agree with deming,

 

Justification – if we can quantify the thing, we can manage it, however there are so many parameters which can never be quantified, but they matter, such as mood of the employee. No one can predict or quantify it, but it matters.

 

As mood of the person has direct impact on performance and if we can develop that equation then we can have some opinion on the non-quantifiable variable. We also want to make it clear that there can be lot of variables on which mood of the person depends which may be quantifiable or may not be quantifiable. But we one want to study the impact of bad mood of person then one can do by tagging it with quantifiable variable.

 

To say that “what can be quantified, can be managed” is applicable superficially. But if one starts digging into details then one may find many variables which can leads to mismanagement.

 

Data is good but if not available, situation can be managed.

 

But same time when we find anything room for improvements, which means there is something in it. This something can be considered as a data. There is something which can be improve and we measure this data with reference to other.

Every act needs a start and an end point. Its needs resolution and frequency to determine the distance. It needs compliance and compliment to establish the depth. The conformance to the goal is possible when both quantity and quality are raised to a better value than the current value.

For the aforesaid philosophy, measurements are imperative.

 

"If you can't measure it, you can't manage it" – This thought/ belief drives the requirement of a measuring system for every undertaking involving systems. The performance of any process will be analyzed based on the numbers set to achieve. Learning is not possible if the measurements are not in place. Vision gets blurred as the focal length is not adjusted with regards to the momentum towards the goal.

 

"It is wrong to suppose that if you can't measure it, you can't manage it. The most important numbers are unknown and unknowable" - Well, this belief is a warning that you should not have a predefined set of measurement as it leads the thinking/drive for excellence confined to the boundaries of those numbers. Unexplored are the treasures for new beginnings, opportunities, growth, potentials and learning. When we talk about the concentric circles of Control, Influence and Concern, Unknown area will be ventured only by expanding the circle of influence. Hence by being effectively predictive and strongly proactive one can achieve the unimaginable.

 

Continuous improvement of processes and questioning status quo are the solution areas  that will help these gentlemen settle their differences.

If you are not measuring something there are chances that you will end up assuming things are okay when maybe they are not.

• Yes, measurement is essential for good management.

Right measurements can help make right decisions for the business. By measuring the size and scope of the problem or performance gap with the relevant Dashboards, Numbers, Metrics, CTQs, we can determine how big, how bad or how widespread it is.

 

As per quote from Edward W Deming, even if you can’t measure something or exactly what you want, you can learn about the area with related data. You won’t be able to measure the exact benefit of a happy customer but you can get measures that give you an insight of the value & magnitude. Some of the complex concepts such as work culture, the psychological effect of a certain policy, work appreciation; these measurements cannot be done with accuracy.

Albert Einstein said "Not everything that can be counted counts and not everything that counts can be counted"

I believe that measuring outputs like performance, efficiency and effectiveness is a must in making informed decisions. However we should not limit ourselves to what we can see or measure at this point in time rather keep open to possibilities which are beyond our imagination. It is not about ideas we cannot operationalise. It is about concepts that we don't yet have.

Practically, it should be a balance between Peter Drucker's and Dr. Deming's statements.

If you can't measure it, you can't manage it – its true every process and every procedure should be measurable. Dashboard visualizes the Key Performance Indicators and other strategic data of an organization at a glance. Numbers are used to track KPI’s, metrics and other key data points. 

 

"It is wrong to suppose that if you can't measure it, you can't manage it. The most important numbers are unknown and unknowable" - Dr. W. Edward Deming – Deming’s sentence doesn’t mean that we have to ignore the numbers, metrics and dashboards, they show the common causes variations. He mean to say that special cause variations also lead to process variations and CTQ’s. Considering only numbers and ignoring the special causes may not show successful process improvements or exact root cause findings.

Peter Drucker and Deming both are correct in their own context. Analysis of data is essential to get a snap shot picture of the current situation. This is a basic step to assess the current level of performance of a CTQ parameter and helps in its improvement.

But, what Deming means is that the business is much more than 'data'. Data or metric represent just a small subset of the whole picture, actual business depends on many other things which are much more important than data. For example many a times most powerful decisions don't emerge from meticulous 'data analysis', they come from smart understanding of the business environment or sometime even from 'gut feelings'. Now a days lot of emphasis is given to the management of human emotions, which, no doubt, is utmost important but at the same time can't be measured, but still to be managed!

"If you can't measure it, you can't manage it" - Peter Drucker.							"It is wrong to suppose that if you can't measure it, you can't manage it. The most important numbers are unknown and unknowable" - Dr. W. Edward Deming
Measurement is critical & necessary for the success of business as through it useful information about the performance of products, processes and services are received. Measurement of any process,product or service, when mapped against the set standard, provides opportunities for continuous monitoring, control, management and  improvement towards meeting key customer specifications, hence towards business excellence and success. Measurement helps in identification, tracking and fixing of deviations through corrective actions real time or at an defined interval thus removing any room for guesswork.							Deming was a very strong proponent of data driven approach for business solutions. He is best known for the Plan Do Check Act ( PDCA ) cycle. However, through the quote, "It is wrong to suppose that if you can't measure it, you can't manage it. The most important numbers are unknown and unknowable", he is emphasizing the business impact of any special & unseen cause, natural calamities, advancement in technology. Such impacts cannot be outrightly measured but can have massive impact upon the sustenance and continuation of any business. Such unseen , special or any futuristic cause can at best be visualized and managed through personal ingenuity and discernment. Merely relying on data and measurement for such will reign havoc and destruction for the business.

Measurement  is essential for good management.  

 

Why do we need Measurement ?

 

Various reasons can be attributed to this.

1.       Having a quantitative/measurable  data , helps in seeing the progress of improvement of the said activity(say CTQ/Metric/ parameters in a dashboard )
2.       Its easy to compare the current performance (AS-IS) with  the TO-BE performance and portray the difference gained ,to the key stakeholders
3.       Quantitative/Measurable data will provide transparency for all to discuss and debate
4.       Quantitative/Measurable data can also imply naturally, the time in which the data was taken. This will provide a clue as how long an issue/scenario was existing
5.       Quantitative/Measurable data

 

Now we know the reasons . Let us also focus on how to efficiently measure data and also see the challenges in measuring the data.

How do we achieve efficient measuring data ?

1.        A metric/CTQ/Parameters of a dashboard should be defined such that it should follow  ‘SMART’ rule.
2.        A general dictum is to have a Continuous data for a variable which needs to be measured. The reason being with continuous data , there would be more data to analyze or find a

             trend as how things are going. Sufficient data would be there to take decisions/arrive at solutions.

 

             For instance, rather than saying whether  students passed or failed, its better to say how   many  students passed . Similarly , customers could be more interested to know about the

            no.of defects failed, rather than a mere status on pass/fail

 

Challenges in measuring data:

1.       There should be a proper measuring system in place to measure your data
2.       The measuring system should be highly calibrated such that you are able to measure your data at the unit level desired by you

 

Exceptions

There could be some exception cases, where measurement might be difficult or not suffice. In such a case an approximation (close to reality) should be done.  

 

 Eg:  There could be intangible metrics/factors. Say for instance, if you are having a dashboard for Customer Satisfaction Survey and one of the parameters happen to be ‘Feel Good 

          Factor’ , then it can be difficult to measure.  The answer can be say, “good, “bad”,” excellent”.  If it is deemed as “bad” , then tracking the data going forward,  so that it changes to

         “Excellent” in the nearby future would remain a challenge.

 

View on Deming’s Quote

1.       Dr.Deming devised a list of 7 deadly diseases(statements made out by him)  which portrayed how numerical/measurable data were misused generously by management teams/key

           stakeholders  in organisations/industries, government institutions and other institutions in America, to satisfy their needs.

2.       In an organisation , management/Key stakeholders would focus on the number aspects. They would worry about the end results . But they would not understand the means for

           achieving that and would not bother to know how they are measured.  This is one of Dr.Deming’s list of 7 deadly diseases which captures this. Below is the message related to this.

           “Management by use only of visible figures, with little or no consideration of figures that are unknown or unknowable”

 

Number become important as the maturity of system goes up. To start off with since the system itself is vulnerable, may be measurement system may not be reliable. But as the system gets matured, to make finer improvement in the system, numbers play important role.

Edward W Deming meant that measurement may not be a must to manage the system and measurement systems cannot be perfected to depict exactly how the system is behaving.

Overall it would make sense to improve measurement system constantly and also use it in line with the subject matter expert's assessment of the system, hand in hand in. Together they would help understand system and take it to next level.

Dr. Deming did very much believed in the value of using data to help improve the organization.But he also knew that it wasn’t enough. There are many things that cannot be measured but still have to be managed & there are many things that cannot be measured and managers must still make decisions about.

 

Refer to the Quote of Lloyd S. Nelson "figures on the most important areas of management are unknown or unknowable, and successful managers must nevertheless manage those areas."

I agree to Mr. Edward 

1.Management which will follow numbers, Dashboards will have linear growth. 

 

2.If the Organization need to grow exponentially, they need to follow innovative thinking & innovative process  rather than following numbers, dashboards. If we rely on numbers, dashboards of past or present, we will start assuming which will prevent us from out of box thinking. 

 

3.For example, Management is made by group of people. Each one has got their own talents. We need to use their talents in respective areas and move forward(Aces in places). If we assign numbers or dash boards to their performance, then we are limiting their performance. They might achieve better than that. 

 

 

Both the management Guru has emphasized on data based decision but Dr. Deming is often incorrectly interpreted. The reason Dr. Deming is often misquoted as saying nearly the opposite is likely because he encouraged the use the data when possible. Since failing to use statistical tools to manage was so common, people correctly tied the importance of using data to improve with the Deming management philosophy. However, now many versions on the quote ("you can't manage what you don't measure") is commonly attributed to Deming incorrectly.

 

Deming realized that many important things, that must be managed, cannot be measured. Both those points are important. One, you can't measure everything of importance to management. And two, you must still manage those important things. In fact, he stated one of the seven deadly diseases of management was running a company on visible figures alone by this he meant that data is very important aspect but at the same time management should be able to understand entire business vibes and market/technological threats to take big business decision.

 

Dr. Deming is also often quoted as saying: "In God we trust, all others bring data." While this does imply a requirement of data, it is meant to encourage people to find a way to get data when possible. If it were not common practice to fail to use data to improve decisions such encouragement would not be needed. However, since we often fail to take steps to take advantage of possible data Deming wished to encourage people to try and use data to improve.

 

In my view, accurate and real time measurement data of any process is very valuable information to control, improve and sustain the process. But in case of various technological and financial limitation measurement data is not available or limited data available then experience, skill, knowledge play a vital role in decision making.  

"If you can't measure it, you can't manage it" - Peter Drucker.

In simple words it means MEASURE to MANAGE. It implies that if you wish to improve and manage a metric the same should be quantified first. Only when the metric can be quantified would one be able to gauge if they have been succeful in adjusting the existing processes to produce the desired results.

 

Other authors too understand the importance of data in making informed decsions. American Statistician W. Edwards Deming has gone to the extent of saying: "In God we trust, all others must bring data." So this implies that having quantifiable data makes us a more informed decision maker since we can detect whether we have been successful or unsuccessful in our pursuit.

 

However, there are some aspects which are qualitative and can't be measured. So, does that mean what cant be measured can be managed. The same is not true. While data does help us in making well-informed decisions, lack of it doesnt deter us from improving the processes and making them more efficient. And as it is said, the most important numbers are unknown and unknowable.

 

So, what should I do to manage effectively: Keep your eyes open for all different pieces of data and don't rely on metrics alone to drive improvements and efficiencies.
 

What is Measurement.?

 

It is the process of collecting, analyzing and reporting information regarding the performance of an individual, group, organization, system or component. One of the most important aspects to be considered in relation to performance measurement process is that the performance measures work qualitatively to provide the useful information about products, processes, and services that are produced in a business. Hence, implementing performance measures is a great way to understand and manage and improve what a business organization does.

The measurement of performance is a continuous process which involves checking the performance against the standards that have been fixed to be followed. It leads to comparing the actual performance with the established standards.

 

Example - A manager needs to supervise, observe and control the activities of his subordinates while he is involved in studying various summaries or reports, so that he may manage the work in an effective manner getting the things accomplished in a desirable manner. It requires the manager to constantly check the performance in order to take corrective actions in case of deviations ensuring that such deviations do not occur again. Thus the Performance measurement is an ongoing, continuous improvement operation.

 

As stated above, the process of performance measurement leads to comparing the actual performance with the standards. This, in turn, helps managers to understand the extent at which the performance is getting deviated from the expected ones. This way determining whether performance matches standards entails evaluating the differences and take necessary actions to improve the performance. However, while analyzing deviations, it is important to consider that some deviations in performance can be expected and so control by exception is used in this way. It is therefore important that a manager should concentrate on exceptional deviations instead of trying to control each and every deviation. According to management by exception principle by Fredrick W. Taylor, Managers should concentrate on only exceptional deviations instead of trying to correct each and every deviation. It is also worth mentioning the saying, “If you try to control everything, you may end up controlling nothing.”

 

The importance of performance measurement system lies in the fact that it not only improves the performance but also the productivity of a business entity by reducing costs. It is a good way to align the activities with the plans being established. It provides necessary feedback that the activities may be guided accordingly by allowing managers to implement best practices. It may thus be said that performance measurement process is a great way to understand, manage and improve the overall functioning state of a business organization. If done effectively and efficiently, it drives success in business definitely.

Q3. Dashboard, Numbers, Metrics, CTQs are commonly used terms in the domain of Business Excellence. Here are conflicting views by two management Gurus

“if you can’t measure it, you can’t manage it” – Peter Drucker

“It is wrong to suppose that if you can’t measure it, you can’t manage it. The most important numbers are unknown and unknowable” – Dr. W. Edward Deming

 

What is your view on this? Is measurement essential for good management? Why? Why not?

What did Edward W Deming mean by his statement?

 

I feel measurement is essential for good management, unless you can measure you cannot predict/forecast the business requirements or set Business Goals.

The success or failures of Business Goals/requirements are based on how well Dashboard/Metric is defined. Known Factors & Unknown Factors both control the outcome of the Dashboard/metric.

Know factors can be measured & managed.

Unknown factors need to be defined to business requirement and which should be measureable to be managed.

 

I think Edward W Deming meant by his statement is as follows:

The success of a goal depends on how well you manage both known parameter & unknown parameters.

Known parameter can be measured & controlled.

Unknown parameters to be decided based on business requirements & how much risk business wants to take (should be an educated decision may include testing).

a.      Once requirements are defined we can set a boundary condition (Range of parameter business want to define) or

b.      Risk are defined – Then we can have a risk mitigation plan

 

 

Example to explain the concept:

 

Agree, few numbers (may be important ones too) are unknown and unknowable. Business Excellence is to minimise this Unknowable factor. Hence measurement and management key to success. Dashboards, metrics  would keep evolving and dynamic in nature. 

Both the quotes are correct. Data is definitely important to measure any improvement. This is more from Profit making organisation perspective. But in the house, our wife/mother cooks something better and tastier than before, the enjoyment got from this improved taste is not measurable.Similar to this there will be many instances where improvement is done but measurement is difficult/not feasible.

If you can't measure it, you can't manage it" - Peter Drucker.

 Quote

"It is wrong to suppose that if you can't measure it, you can't manage it. The most important numbers are unknown and unknowable" - Dr. W. Edward Deming

 

 

considering the fact that there several processes which are non measurable but still can be managed by some defined processes or improvement in the process flow. Such processes can be tracked and controlled

all the processes are manageable  whether measureable or not.

Processes that can be measured can be managed in a better way.

 

 

  Quote

"If you can't measure it, you can't manage it" - Peter Drucker. 

 

  Quote

"It is wrong to suppose that if you can't measure it, you can't manage it. The most important numbers are unknown and unknowable" - Dr. W. Edward Deming

What is your view on this? Is measurement essential for good management? Why? Why Not?

 

Well, I firmly believe that Mr Drucker is right. If we cant measure we fails almost everywhere- because there will be no mathematics, no statistics, no prediction at all. All we will have is pure GUESS on GUT feeling. Measures of data/measurement gives us a fair guess of a situation and depending upon that today we are sending rockets to other planet. 

 

 

What did Edward W Deming mean by his statement? 

 

As per my understanding what Dr Deming is not wrong either, what he wanted to convey is - don't just take decision on the basis of data, consider situations beyond that which is unknown and unknowable, so that, if my mean get shifted still my system will have a fair chance to deliver as per specification/requirement. That is be ready for new challenges where you don''t know what might happen. And here comes the the question of "vision" of management someone who can see future and as per that can take decision.  

 

As a example, where other Indian Telcos were fighting for tariff plan, JIO changed the whole scenario/perpective biding on "internet data". Normal/mediocre management of other companies were taking decision based on data, they didn't saw the scope, with LESS or NO vision to think/see beyond. 

 

Conclusion:  It might seems that both the quotes are conflicting, but in actual these two are complementary to each other.