Date: 2025-08-22 Page is: DBtxt003.php L0915-MIforTVM-010000
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TrueValueMetrics ... Peter Burgess Manuscript
Making Management Work Better Management Metrics Essential for Best Possible Progress and Performance of the Global Enviro-Socio-Economic System. |
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Chapter 1
Overview ... Not More Metrics, Better Metrics |
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Better Metrics is not More Metrics
Metrics are needed for measurement, and measurement is needed for management, and management is need for progress and efficient performance. But more metrics is not the answer, rather it should be better metrics ... and indeed better system design generally. Metrics of any sort have a cost, but the cost/benefit ratio of good metrics is high when they are used to inform the right people ... the right actors who are able to use the information usefully. Metrics Matter Metrics are powerful, and it is very important that a metric is fit for purpose. It is important that what is measured is relevant to the issue at hand. There has been an understanding about the power of metrics for a long time, but this has not always been used for the betterment of society as a whole, but more often merely to More Precision More precision is needed in some situations, but these are rare. Rather, instead of more precision it is better to have more speed and delivery of critical information to people ... that is to the actors who are able to do something to make improvement. The academic community has been successful in creating a massive amount of knowledge, but rather little of this knowledge has the utility needed to improve the performance of the socio-enviro-economic system either at the global level or at the local or individual level. That is not to say that much of this knowledge does not have value maybe possibly as human understanding evolves in the future, but in terms of managing in the here and now, much of this knowledge has little or no utility. I am reminded of a little incident early in my career. I am a Cambridge graduate in engineering, and some little time into my first job with a major heavy engineering company (the company manufactured rolling mills, blast furnaces, and other heavy equipment for the metals industry), I attended a Cambridge Engineering Association reunion at the Department of Engineering in Cambridge. The Managing Director of the company was also there, and he made the observation that much of the cutting edge research being done by university academics was already known and in use for a long time in industry. A few months later, I had another experience inside our company. In this case, the department responsible for advising on the pricing of contracts was so out of touch with the actual engineering developments that were being built into the product that they were recommending prices that were out of touch with costs. The scale of this lack of understanding was enough to put the company out of business in a few short years. Specifically, the engineering changes that were in progress in our company related to the development and deployment of automatic gauge control that was the technological enabler of much higher quality steel and aluminium sheet for all sorts of other industries. The Power of Comparison A single data point is usually better than no data point, but it does not tell the user very much without some additional context. Context may be provided through comparison. There are a variety of ways to enable comparison.
Simple comparison is usually not very simple. Worse, simple comparison tends to enable multiple conclusions that can be used in support of different arguments. Times Series Changes over time can show in a very clear manner what progress or otherwise is being made. Spatial Comparison How an element of data is different from one place to another has the potential to be very interesting Comparison with a Standard Comparison with a standard makes it possible to assess how a datapoint compares to this standard, and what should be done about it. In many corporate management information systems, there are systems of cost accounting. The aim of cost accounting is to inform the company's staff about the cost of the company operations and products. Many cost accounting systems have a huge amount of data, but making sense of this actual data is difficult. However, when a standard is introduced ... in other words, this product has a standard cost which is what the product ought to cost, and the actual cost is different, then this can trigger some sort of inquiry. |
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