Why We Can’t Manage Organisational Performance Without Numbers

January 7, 2020 by Stacey Barr

Numbers are the fundamental building block of performance measures because the fundamental question we ask about performance is ‘how much?’

A cloud of numbers. Credit: https://www.istockphoto.com/au/portfolio/pixel_dreams

Believe it or not, there are many philosophical views about the meaning or ontology of numbers, or quantification. In performance measurement, it’s not too useful to go that deep into the rabbit hole. But it is useful to come back to basics, and reflect on the role and meaning of numbers in the context of measuring performance.

It’s useful, because too many organisations still do performance measurement poorly. And I think one of the reasons is they’ve lost touch (or never first got in touch) with the most fundamental reason why we measure.

We measure because we want to know how much or how many. How much more revenue is coming in? How many accidents are happening in our workplaces? How much more or less loyal are customers?

Answering questions like these with words like ‘lots’, ‘some’, ‘a few’, ‘heaps’ or ‘not enough’ does nothing to help us understand how much or how many. It does nothing to help us all arrive at the same understanding of the amount or quantity of performance. And it does nothing to help us compare how much or how many over time, or when the differences are very small.

Numbers solve that problem. Numbers were designed to answer the questions about how much or how many. They were designed to quantify very small amounts and very large amounts. They were designed to be consistent and objective, and mean the same to everyone.

If your KPIs or performance measures are not quantitative, they’re not monitoring performance. And if you’re not a ‘numbers person’, you’re not ready to manage performance.

Numbers are the fundamental building block of performance measures because the fundamental question we ask about performance is ‘how much?’
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  1. Andy says:

    Hi Stacey,

    Agree that organisations only scratch the surface with what they could do with statistical modelling. The challenge I find is that people use the numbers in isolation to jump to swift, and sometime erroneous, conclusions. For me, the numbers are starting points for asking questions. They are rarely the answers themselves because mostly they lack context.

    Thanks for writing this blog, helps me stay determined in the face of some of the nonsense I hear.

    FYI – here in the UK, our thoughts are with everyone in Australia dealing with the horrendous bushfires.

    Andy

    • Stacey Barr says:

      Andy thanks for sharing your thoughts – I love the point you add about numbers rarely being the answers. I think it might be Donald Wheeler who wrote that data has no meaning apart from context. (And thanks for your thoughts about the bushfires. I’m in a high risk zone but have been so fortunate that local fires are getting put out quickly enough. Others, especially in NSW, are not so lucky, sadly.)

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