Business
Numbers do their best work as an aid to the judgment of experienced people, not as a substitute for it. Choosing what to measure and reading what the figures mean both require judgment. Measuring performance is worth attempting, and used this way it can genuinely help.
A number may start out as an honest measure, but once pay, rankings or penalties hang on it, people put their effort into moving the number rather than the thing it was meant to track. Anything that can be measured and rewarded will be gamed. Hospitals facing fines for patients who return within a month began quietly recording returning patients as outpatient visits.
When people are judged by their success rate, the easiest way to raise it is to turn away the cases most likely to fail. This 'creaming' makes the record look better while the hardest, neediest cases go unserved. Heart surgeons refused to operate on critically ill patients. Those patients died anyway, but their deaths never showed up in the surgeons' figures.
Leaning heavily on numbers leads people to overvalue whatever is easiest to count and to neglect what matters but resists counting. Effort and money flow toward the measured part of a job and away from everything else. Teachers drill the subjects on standardized tests and drop critical reading and long-form writing.
A figure first used to track progress toward a purpose can come to replace the purpose itself. People then chase the figure even when doing so works against the original aim. In one war, the number of enemy dead became an objective in its own right and pushed aside what the fighting was actually for.
The useful first question is 'what are we trying to accomplish?', not 'which metrics should we use?'. Settling the goal first shows which numbers, if any, actually serve it, and when they might be safe to rely on.
The habit of steering organizations by numbers assumes people are like trained animals that respond mainly to money, carrots and sticks. This ignores how much good work comes from a sense of purpose and professional pride. Tying jobs to a bottom-line figure weakens that pride and independence, and it discourages the creativity and risk-taking that lead to new ideas.
Squeezing a complex outcome into a simple, standardized figure strips out information and creates a false sense of precision. Measuring inputs instead of results, or simple things in place of complex goals, adds to the illusion. Such numbers can pass for scientific knowledge while hiding how little is really understood.
The case for counting everything rests on the belief that exact measurement brings openness and accountability. That belief turns into a general rule of quantifying performance, publishing the results and handing out rewards by the numbers. Rewards and punishments then follow the published figures rather than the actual work.