Judgment vs. Measurement | AccountingWEB

Judgment vs. Measurement

Hat tip to Eric Fetterolf for passing along a thought-provoking blog post from Tom Davenport, a writer and thinker for whom I have great respect.

He's posing the question why judgment is so ignored in organizations, and posits it's because it can't be measured. Amen to that.

Judgment is subjective and it seems to scare professional firm leaders to death. They rather be precisely wrong rather than approximately right.

Our stance on this is clear: In a knowledge environment, judgment always and everywhere trumps measurement. In fact, it's true in all businesses, and certainly in our daily lives as humans.

The comments to the post are very telling. Ed Kless points out that Davenport misquotes Peter Drucker, who never wrote "what you can measure you can manage."

The closest I have been able to come for the origin of this quote is the McKinsey Maxim, implying perhaps the founder of McKinsey said or wrote it.

It doesn't matter to me, because it's not true. We can't change our weight by measuring ourselves more frequently.

But beyond that, there's a materialist fallacy to this type of thinking, which I wrote in a comment on the blog:

Isn't is obvious to everyone here that the materialist fallacy is wrong? The     belief that everything can be measured, that you can achieve optimal results--production efficiencies, etc.--simply by running the numbers, much better than those slow and messy humans. The communists tried it, and it failed miserably.

Life is subjective and full of judgment. So is business. Measurements are the illusion of control and knowledge. New innovations can't be measured,     nor Black Swans. To think you can measure everything is to live in perpetual poverty--see the USSR, East Germany, Cuba, North Korea, etc.

We live in a knowledge economy where judgment trumps measurement everywhere. If this wasn't so, economies could be run by computers and we wouldn't need human beings. But creativity always comes as a surprise to us, and I defy anyone to measure something that doesn't yet exist.

The old axiom, "What can be measured can be managed" is specious. You don't change your weight by weighing yourself more frequently.

And can someone show me where the effectiveness of management has     ever been measured? It's a judgment, is it not?

To Rob Clark who can compute the ROI of children when given a comparison--good luck. You'll end up with something precisely wrong.

Judgment at least gives you the opportunity to be approximately right. Measurements may feed into our judgment, but judgment is the senior partner.

I wouldn't want to live in a world--or work in a business--where this wasn't so. It would be tyranny.

Rob, how would you measure the Declaration of Independence's goals of life, liberty and the pursuit of happiness?

As always, we are interested in your thinking on this topic.

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VeraSage Institute is the most revolutionary think tank for professional knowledge firms-we challenge the professions to break free of practice methods that hurt the professions, undermine their purposes, and fail their clients. Among our quests: burying the billable hour and archaic timesheets; pricing on purpose; recognizing that professionals are knowledge workers, not machines; and improving the professions for posterity.

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