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Monday, March 4, 2013

Management by the Numbers Makes You Blind, Go Beyond the Numbers

Businesses love numbers and every good business manager loves metrics. After all, the old adage, “You can't manage what you don't measure” still holds true in most management circles.  However, a singular focus on metrics and worse, concentration on wrong metrics, keeps getting executives in trouble.

But here’s the key thing about numbers: they tell a story. They represent the culmination of the work you are doing. The story is a business need. And this is where managing the business and managing by numbers starts to get very important for those of us working in cubes.

People need to measure all types of work so as to be able to tell when things are working right and when things need to be corrected. We need to be able to measure our work for review and update as necessary. Meeting those numbers is critically important.

When managers use numbers to run the business, they are all involved in the story behind the numbers. They want to understand what the numbers are telling them about the state of the business. They want to know so they can change what is being done with the business to make it better.

But when a manager runs the business according to numbers, the world changes. No longer does the story matter. No longer does your input count as to what can make the business better. No longer, even, do logical and rational reasoning make a difference. No longer do innovative ideas on improving the business matter. No, what matters is the number. Not the story.

But there is measuring performance and then there is managing to a number to the exclusion of good business sense. There is a world of difference.

The effort to go “beyond the numbers” by using direct observation has the potential to help manage business efficiently and effectively. If we invest more in understanding people and less in understanding numbers, we’ll start to see the root causes behind performance problems.

Today’s lean management favor more holistic, less quantitative, and presumably more “dynamic” approaches. Know what to measure, and manage the numbers; don’t let the numbers do the managing for you, or of you. Organizations should be flexible, Lean, and focused on people and processes, not numbers.

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  1. Great points, Tim. Just last week, I delivered a presentation to the MassBay chapter of the Project Management Institute discussing lean in white-collar office settings. Much of it has to do with bad habits such as you describe - too many meetings (transportation), emails (motion), overproduction (excessive documentation due to CYA necessities), and so on.

    There is a place for Lean in project management, however, since that profession is heavily dependent upon metrics, inflexible processes and short-term events, it is often difficult for those audiences to see the connection. Once you establish it, however, you can see more of the "A-ha!" moment happening.

  2. Very good article. I think we have all run into some of these challenges, but it is a brave step to come out and say it in a public forum.