The Perils of Metrics Misapplied

[Bob's World]

To my point, however, is that we pick metrics to tell the story we want to tell.

[Surferbeetle]

No that is not business. Nothing to do with business other than (like the Arms Deal of some years ago) for the 'lucky' winners of the tenders to do the work and those political insiders who will stand to cream off R80-100 billion in terms of kickbacks and 'commissions' who will be smiling.

Would be interested to hear about an example of 'good business' as per your definition.

Good business...hmm...for me examples include infrastructure and education.

I was going to write to you about the beauty, importance, and service to humanity of infrastructure, associated examples of economic structures, and a bit about the 30 days or so i spent sh#tting out most of my braincells after drinking untreated water in a foreign land...something that truly gave me a deep appreciation for the importance of clean water in a way that school and decades of work in the field have not...but i wonder if that is what you are really trying to get at?

It's not an easy trip to America from some places, but we have some kick-ass schools...community colleges on up...that welcome students (young and old) and teach them about how create their own good business. Perhaps some links and books (i have found them useful for putting together my first business plan, and more) might be of interest to you:

How to Start a Business from the SBA

Value Chain Analysis from the USAID

Guiding Principles for Stabilization and Reconstruction, USIP

Jeffrey D. Sachs, The End of Poverty, Penguin Books LTD, London

W.J. King and James Skakoon, The Unwritten Laws of Business, Profile Books, London

Richard Templar, The Rules of Management, Pearson Education, New Jersey

Robert E. Quinn, et. al, Becoming a Master Manager: A Competing Values Approach, John Wiley & Sons Inc, New Jersey

O.C. Ferrell and Michael Hartline, Marketing Strategy, Thomson-South-Western, Ohio

Mason A Carpenter and Wm Gerard Sanders, Strategic Management a Dynamic Perspective, Pearson Education, New Jersey

Craig W. Kirkwood, Strategic Decision Making, Wadsworth Cenage Learning, California

____________________________________

Bob,

Metrics to measure metrics....the volatility smile concept is an interesting one to consider. It is used to model changes in underlying contracts....but why not defense spending, or infrastructure spending, or educational achievement, or employment....

[Entropy]

Read the treaties. The North Atlantic Treaty for one does not mandate a specific military strength. In fact, it doesn't even mandate a specific reaction to an invasion. There's a lot of latitude involved (The Lisbon treaty is on paper a much stricter alliance, but almost nobody knows about this function!).

Well, of course not. No treaty is going to be that specific. But people can understand if a country is committed to the treaty or not. There's a reason Japan doesn't want us to remove nuclear TLAMs stored on their territory and there's a reason why the South Koreans don't want the US to completely depart, just to name two examples. Allies understand when you've got skin in the game and when you don't and for alliances to be credible the US has to have the capability to actually provide timely defense. Europe and NATO is no different and the US has been the backbone to every major NATO operation since the Cold War ended.

BTW, I'm not pointing this out to justify US defense spending, far from it. Not am I defending our alliance commitments - indeed I think we should reexamine all of them. I'm simply saying that the US can't simply cut spending by 1/2 and maintain the status quo.

To my point, however, is that we pick metrics to tell the story we want to tell.

Or we pick metrics that serve bureaucratic self-interest.

[JMA]

Good business...hmm...for me examples include infrastructure and education.

I spoke of business in the context Sydney Jary spoke of in his book '18 Platoon'. You responded with 'BS'.

I suggest you go read that quote again.

[Surferbeetle]

Setbacks that lead to success, by Luke Johnson, February 7, 2012 7:12 pm, Financial Times, www.ft.com/management

Obsessing about past errors is not wise but to imagine that running and backing companies should be an unbroken series of victories is to court disappointment. It pays to understand and remember one’s own defeats, the difficulties endured by famous tycoons, and that we should all expect our fair share of cock-ups in the future. They are an inescapable part of commercial life; pretending otherwise is denial. As Winston Churchill said, “you will make all kinds of mistakes, but as long as you are generous and true, and also fierce, you cannot hurt the world or even seriously distress her”.

Far too many who think about launching a start-up shy away from taking the plunge because they suffer from an irrational fear of failure. Of course things may well go wrong but the worst very rarely happens. And the pain and stigma of failure is never as bad as one imagines. Generally speaking life moves on, new opportunities arise, the world forgives and time tends to heal even the deepest wounds. Sure, there are scars, but they form part of what one might call one’s education. As they say, what can seem like a crisis at the time fades to a footnote before too long.

Perhaps entrepreneurs are subconsciously following the quest set out by Joseph Campbell in his book The Hero with a Thousand Faces. This work describes how almost all myths have the following basic narrative: “A hero ventures forth from the world of common day into a region of supernatural wonder; fabulous forces are there encountered and a decisive victory is won; the hero comes back from this mysterious adventure with the power to bestow boons on his fellow men.” In such tales the hero must invariably overcome difficulties and confront his own demons.

Those who build businesses are usually portrayed as ruthless moneymakers but very often they are romantics at heart, engaged in what they see as a mission, looking to slay dragons. Great innovators who discover new products are the ones who seek the biggest challenges – and must steel themselves for the toughest blows. Genuine inventions are what drive progress and job creation – but making them happen is arduous and risky, while never giving way to despair is the secret ingredient behind every triumph.

[JMA]

Setbacks that lead to success, by Luke Johnson, February 7, 2012 7:12 pm, Financial Times, www.ft.com/management

It appears you see the military and 'business' as similar.

I suggest a rethink in that regard would be in order.

[Bill Moore]

Posted by JMA,

It appears you see the military and 'business' as similar.

I suggest a rethink in that regard would be in order.

One can make an argument that McNamara started this line of thinking during the Vietnam War (and you can tie our failure to it in many ways). I saw this line of thinking really take root starting the in late 1980s and then accelerated through the 1990s when officers getting MBAs were all the rage. MBAs and black belts in Six Sigma (another business school management system) were considered progressive, and also value added when one retired (tells you where their focus was). We transitioned from a focus on warfighting to transformation with the key words being efficiency, metrics, etc., very little deep thought on what it took to win a conflict, or sustain a fight. Again like most posts this is a over simplication of reality, but it does IMO accurately capture a trend.

I am not suggesting we throw out the baby with the bathwater, because management is an essential element of the military, but one can argue we're over managed (policy after policy) and under led. Arguments have already been made that many of our senior leaders have shortcomings when it comes to developing strategies and competent operational level plans. These senior leaders are far from being stupid, but unfortunately they have been pushed through a system that values business management skills more than leadership and warfighting skills.

[Ken White]

I am not suggesting we throw out the baby with the bathwater, because management is an essential element of the military, but one can argue we're over managed (policy after policy) and under led. Arguments have already been made that many of our senior leaders have shortcomings when it comes to developing strategies and competent operational level plans. These senior leaders are far from being stupid, but unfortunately they have been pushed through a system that values business management skills more than leadership and warfighting skills.

Well writ!

[Surferbeetle]

'Business' is not the enemy.

Business is indeed a chaotic place, without the familiar rules and hierarchy of the military, however in learning how to swim and fish in the waters of business we learn how to wean ourselves from mother state...

This is not to say that they evil people do not swim in the waters of business and hurt the many however. Same as anywhere else, beware the sharks...

[Ken White]

They abound and are often well camouflaged...