Governance, Risk and uncertainty

Measure without numbers

I was in a meeting a while back discussing the introduction of new key performance indicators (KPIs) for a team. The group was understandably cautious about what we might be letting ourselves in for, and were keen to explore the options. One participant said, “We should be open to the idea that we might not just measure things with traditional numerical scales.” I couldn’t have agreed more.

The reason we want to measure things—particularly in an organisational context—is to be able to make decisions. Exactly what decisions we want to make will influence what and how we measure. It will also influence how accurate we need to be. If we can do that without numbers that should be fine.

In his book How to Measure Anything, Doug Hubbard references a 1946 article by psychologist Stanley Smith Stevens [pdf]. In that, the author classifies four “scales of measurement”, of which one is “nominal”, which is simply categorising observations, rather than applying numbers to them. That might be high, medium and low, or grades A to F, or something else. This may be sufficient to help us make decisions.

I can also offer a concrete example of this. I was once working on a project that needed to show progress against particular stakeholders’ expectations, and to refocus priorities if we seemed to be missing them. Our scale of measure was 24 indicators, each showing a RAG status—red, amber or green. As with so many RAG statuses, the categorisation was a subjective judgement, but it was a done by informed and unbiased outsiders, so it was trusted. There were certainly times when a number of red indicators forced otherwise-difficult conversations and helped us reprioritise effort (and money), and it definitely helped the project’s success.

So there are ways of measuring which are both fairly straightforward, highly valuable, and quite different from what many might expect.

Photo by Sam Judson

 

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