Our Demon Measures

Many will acknowledge that while we may not measure what’s important, the important thing becomes what we measure.  Why?  It keeps us exclusively focused on what (in-practice) we really value.

So what’s most important to those in authority?  Organizations have ceased to exist because of a single-minded pursuit of it.  Well we’ve fought wars because of it.  It is keeping us from truly listening to each other toward identifying and finding a solution to the healthcare problems in society, and to the widening inequality in society—yes even to formulating a playoff system for major college football!

It all boils down to corporate profit at the organizational level and the flow of money from households to business (GNP) at the societal level—it’s really all about material growth and the accumulation of wealth.  Clearly by our measures, we are not concerned with the viability of the organization or with the wellbeing of people in society.  Rather, our concern lies squarely with the health and wealth of Wall Street—Black Friday is a really big day.  So when the greatest good is essentially measured by say, GNP or by the size of the DOW, then it should be clear what we in-practice actually care about.

Let’s look closer at what this means.  Focusing on (material) growth is a focus on the present relative to the past. This is synonymous to driving your car by looking in the rear view mirror—and that’s far from prudent behavior when the road ahead has so many twists and turns!  Accordingly, we proceed in life—especially work-life—as if the topography of the territory we traverse is linear. We erroneously assume that if the next step causes an increase in our metric, then it is the right next step to take. The short to near term relative to the past is what counts—in effect it’s about what have I done for me lately!  Unavoidably, in the process, the concern about the prospects in the future is disregarded.

The effect is that it causes us to continually sub-optimize both our organizations and society.   Yes we experience growth, as well as everything else that comes with it—dysfunctional organizations, worker dissatisfaction, poverty, inequality, and yes even government regulation.  It is not that we don’t acknowledge the existence of these it is that we see them as special problems, not systemic problems.  So we create a department or agency and/or appoint a director or a czar to watch over these symptom-problems, while we continue with our focus of attention.  We don’t seem to connect these symptom-problems to the very things we value-in-practice and relentlessly pursue.

Why are we doing this to our selves?  The major reason is we cling to a worldview, a paradigm:

  1. that guides us in reducing complex issues to simpler terms—single dichotomous things are best;
  2. that inhibits us from understanding the interdependencies;
  3. that guides us in viewing these, not as systemically caused, but as persistent difficulties—difficulties for which the top 10% in society seem to be relatively unaffected.  We fail to acknowledge that it is this socially constructed way of ordering life that keeps us stuck.

Adam Smith noted long ago that if we keep everyone—especially the working class—focused on pursing this one thing (i.e. material self-interest) then it will ensure their industriousness.  Effectually this will serve the capitalist class who in turn will ensure the betterment of society—the seed of supply-side economics.  The unfortunate thing, apart from this theory being a bit off the mark, is that material self-interested behavior also has more far reaching effects.  Systems thinking would help us see this.

Systems thinking informs us that we can’t do just one thing; that there are multiple and unintended consequences to a single action; that our actions reverberate throughout the system.  Most everything is connected and deeply so!  Yet our measures tell us to place focused attention on one thing.  At the organizational level we are expected to maximize profit—or shareholder value—without regard to much anything else.  At the societal level, for example, it is GNP as a measure of societal wealth—which erroneously is at times equated to societal health.

When we reduce things to simple dichotomous (either/or) terms (e.g. capitalism versus not capitalism) we render ourselves incapable of understanding the complex nature and full effects of our action—we keep things as is. We are seeing this unfold before our eyes relative to climate change (aka global warming) and periodic runaway self-interested behavior by those having the most impact on, as well as realizing the greatest benefit from, the current system (e.g. corporate captains, financial institutions).

Well why don’t we just change measures?  It is not that alternative measures haven’t been offered.  For example, Deming advocated for quality, and Daly and Cobb offered the Index of Sustainable Economic Welfare. The trouble is that if and when these alternatives get any play, they are adapted to fit with the current way of thinking—this is colonization not change!  As a case in point, the theory of quality has been colonized so much that we’ve come to think it means six-sigma—this multidimensional theory has been reduced to a single physical characteristic. Adding insult to injury, we’ve even reduced it to a dichotomy—either it is within six-sigma or not!  Essentially, we’ve developed an immunity to change because of the power over us emanating from (1), (2) and (3) above.

Even though intellectually we acknowledge that our world is complex and multi-dimensional, we continue ordering life in our world as if it is a simple single dimensional dichotomous world.  I am reminded of the adage, a narrow focus of attention leads to a large measure of heedlessness.  The devil is not in the details it is in our measure.  They communicate what we really care about!

Why in a multidimensional world do we continue to rely on single-dimensional measures?  What changes in measures have you instituted that are reflective of a change in thinking from one dimensional to multidimensional?

12 thoughts on “Our Demon Measures

  1. Hi Greg

    An interesting, thoughtful piece, My response is probably slightly off topic, hope you do not mind.

    I think how we measure and what we measure in the end it boils down to collective and individual values or dare I say it in many cases a lack of them. Dare I mention religion or the lack of religious belief, which to me is a reasonable moral bed rock for any value system.

    Long term, sustainable economic well being is highly important to every one. We can not get away from it. It is very dependent on human activity. It has always been influence by the weather, especially agriculture. Climate change adds a totally new dimension to this.

    In some of the simpler societies which I come across in my travels through Asia, the mantra appears to be “I have to eat today but I also have to eat next week and next year and I do not have a deep freeze”. Put it bluntly these people are very careful how much they take out of their habitat. They have seen it all before. They learnt the hard way and have passed it down by word of mouth for generations over thousands of years.

    The main stream of Asia is now the same as the rest of the world. No one gives two hoots about tomorrow.

    Given all the efforts of the History Channel, National Geographic and the Discovery Channel to enlighten us I see a massive disconnection at all levels of society between reality and the virtual world many of us now live in. We have the values and measures of a virtual world not the real world.

    Long ago in what now seems now a different planet, Wall Street and the commodity markets world wide used to serve very clear functions in a real world. The origins of the financial markets being in the coffee houses of London, Paris, Constantinople and the rest of Europe of 12th and 13th Centuries and before, where merchants, farmers and traders would go if wanted to raise some money for a given venture or protect against fluctuations in the harvest etc. These coffee house guys first got their fingers burnt in 1720 with the South Sea Bubble. Despite wars in Europe, American Independence, The Napoleonic Waters, The French Revolution and World War I, these guys were pretty dam careful for the next 227 years until the War Street Crash of 1927 /1928.

    We must be getting dimmer as a society because this latest crash of 2008 is not quite out of living memory of the last one of 1928 or its consequences.

    To me collectively the world as a whole has taken on the values and measures and mind set of some one who is playing a computer game. These guys are playing with the real world as if there were no consequences, and no necessity to learn from past mistakes.

    John Beardsley

  2. Hello John,
    Your thoughts are not at all off target; in fact they are right on (at least from my perspective). Yes what we (really) care about has drifted considerably and our measures indicate this. The little bit of history you shared is extremely enlightening, adding value to this dialogue.

  3. Gregory Gull,

    Attempting to reduce all problems to a dichotomy then ignores the simple elegance of the delicate and intricate machine that is being analysed. The simple tricks and clever distortions of vocabulary may be fun artistry, but detracts from a valuable debate of the issues.

    Your first sentence captures the reason and justification of why we use a simple, common and universal measure, simple because it is not possible or useful to measure every other human value metric and then attempt to make sense of it.

    We choose to measure personal, corporate and national income because it is simply the best, most common, and most valuable metric.

    We have chosen to do so because history has proven all other measures ineffective and inefficient, some socialist regimes requiring physical enforcement consuming millions of lives. The ‘Wealth’ you propose by these other measures is simply unacceptable.

    By choosing Capitalism over Socialism (your ‘cute’ euphemism of “non capitalism”), people are freely able to achieve any of their own personal measures of success. A socialist command and control economy gives a government bureaucrat financial and political power over some made-up and irrelevant measure.

  4. Hello Adam,
    If we were discussing mechanics then reductionism might prove very helpful. However, we aren’t analyzing a machine we are talking about life. Ignorance of the inherent complexity of living systems doesn’t make life simple. Moreover, the dichotomy you are advancing provides a perfect illustration—I thank you.

  5. Greg,

    Nice piece, I’ve written myself about the problem of a cultural requirement regards busines and ‘change’, to simplify that which is not simple – i.e. the ‘people’ part.

    My own take on the issue you raise is that education in regards ‘Change’ is wholly devoid of psychology, philosophy, theology and history; Change in business is considered under narrow banners – e.g. Lean six sigma – forcing a focus within boundaries (of measurement – driven by an open acceptance that standard accounting practice is ‘Good’ – a philosophical debate), rather than expansively to include all that is human. (Systems thinking, Lean accounting and beyond – way beyond).

    Making Change to a social structure (nation, region, principality, local community or work environment) has been the pre-occupation of the human race, justifying religion, politics and .: War, death, persecution, fear and all associated conditions of human unrest for millenia (it is of course no different today, we are just able to ignore it in the ‘civilised west’ more readily in our conditions of comfort).

    Change has usually occured as a by-product of the pursuit of material worth or knowledge, (the education system being a relative, but different subject) as this is seen to equate to power.

    Such a false reality misses some vital and interesting points – e.g.

    1. Power is only a mask for the psychological polar opposite of ‘Love’ i.e. ‘Fear’. We talk about having ‘Power’ but in reality, when you look at the psychology behind it, power is typically the manifestation of a defence mechanism, covering up varying degrees of neurosis founded through imprinted fear, &

    2. there are a host of higher level considerations to be aware of relative to a human life on the planet. e.g. Virtue, Morals, Beliefs, Emotional security, self-actualisation (Maslows term), thinking patterns, negative emotion stimuli, cognitive awareness of self …. or from ‘Lean as a philosophy’, ‘Kaizen’ which translates as “No one person benefits at anothers expense” (Not CI) / or ‘Voice of the customer’ – which through deming, hill, carnegie etc. could be considered to have it’s influence in scripture in the form of ‘Do unto others’ and ‘Love thy neighbour’.

    These issues and many more play a fundamental part in effecting a change to our conditions , environments and processes, at base(and bring the esoteric subjects listed above together relatve to humans and making change), by effecting our beliefs – i.e. rather than looking to change our conditions (processes), we are better served looking to make change to self (Thinking et al), if anyone wants to make change more ‘simplistic’ than this – there is only one person involved in the process being fooled.

    Where studies on ‘Culture’ (i.e. the behaviour of a mass of people acting based on their combined beliefs) have been conducted, the exponential differences in performance speak for themselves ….. The irony is, to appeal to the accountants, such that they will approve investment in ‘people’ (Culture), prior to investment in ‘Processes’ (with readily tangible links to ROI / EBIT / ROCE etc.) we have to convert the findings into their language – which, a tth is level of thinking is in itself, part of the problem….My suggestion being that we have addressed change in busines backwards for the last 35 years, at least since TPS was first introduced as Quality Circles, but before that also.

    E.g.
    “Kotter and Heskett’s landmark study Corporate Culture and Performance documented results for 207 large U.S. companies in 22 different industries over an eleven-year period. Kotter and Heskett reported that companies that managed their cultures well saw revenue increases of 682% versus 166% for the companies that did not manage their cultures well; stock price increases of 901% versus 74%; and net income increases of 756% versus 1%.”

    Anyway – enough from me, sorry to hijack your discussion, as you may be able to tell, ‘Change’ in business through putting people first is a passion …. thanks again for the article – very well put.
    Regards
    David

  6. David,
    Thank you for the thoughtful comment.

    Your point about the absence of subjects like psychology, philosophy, theology and history is quite on target. At least in the US, business schools train mechanics of the business machine; business education is not really education rather it is more akin to training–we don’t develop the mind, we just fill it. So the ability to understand the dynamics of culture in organization is not developed. Moreover, developing a critical thinking mind is not even a consideration.

    In light of how our captains of industry are educated–both formally and informally–it is no wonder as John noted “collectively the world as a whole has taken on the values and measures and mind set of some one who is playing a computer game. These guys are playing with the real world as if there were no consequences”

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