What you measure is what you improve but……

……..what do you measure and how often?

#MakingBetterDecisions, #ConsciousApproach,?#focusonwhatmatters, #Wealth, #Careers

“It is not the years in your life but the life in your years that counts.”

Welcome to this week’s blog where I talk about the importance of measuring right things as opposed to measuring things right, particularly in today’s world where with increased affordability of tracking devices and ease of access to data and its analysis, we run an increasingly high risk of getting lost in unsuitable measurements and subsequent misdirected actions, losing valuable time and opportunity in the process.

There is something about tangible goals. The mere act of measurement has potential for improving the measure. The travesty is not in having measurable parameters for our goals but measuring wrong parameters and also that measured parameter itself becomes the goal.

I have seen a number of people tracking the number of steps (while walking or running or just moving about) they take per day. 10,000 steps a day is considered golden. This level of exercise has potential to hone one’s cardiovascular system into fine shape. The only problem is that there is a big difference between accumulating ten thousand steps a day and doing an exercise which nets you with about ten thousand steps. The key point of an aerobic exercise is to operate the body at an elevated heart rate for 40-45 minutes continuously – this is when benefits from exercise start to accrue. A bunch of five to ten minute bouts of activity over a day is no where as beneficial.

We measure either leading or lagging indicators. For example, blood pressure measurements are leading indicators of heart health whereas inflation is a lagging measure of escalation in consumer prices. Lagging indicators are measurements after the fact. They help you react to a situation after the situation materialized. The key word here is “react” – lagging indicators do not allow for proactive treatment. Leading indicators, on the other hand, allow for proactively acting and thereby not allowing an adverse situation to materialize.

The real rub with measurement is not so much about usefulness of measurement but about nature and frequency of measurements. Many times, we measure related but not entirely suitable parameters. We end up measuring what is relatively easy to measure. How often we measure is another important aspect. Measuring too often may result in unnecessary and perhaps counterproductive action. Examples galore in personal finance space of people selling their stock or fund positions too soon when prices fall, only to see the prices go up later. They likely would have been better served if they did not track their positions too often. Conversely, measuring too infrequently robs one of chance of timely corrective action. Measuring blood pressure too infrequently may not allow one to take timely health action to avoid heart episodes.

It is harder to go wrong in identifying lagging measures. No wonder checking for fever (temperature) is among the most popular diagnostic measures for detecting bodily infections. It is much harder to determine appropriate leading indicators. Although commonly taken as a leading measure for career success, academic performance is a poor predictor.

Many organizations strive to give “SMART” (Specific, Measurable, Achievable, Relevant and Time-bound) goals to their employees. “Relevant” is where issue lies – in practice, “relevant” becomes “related” instead of “suitable”. It is not uncommon to see “coding productivity” being given as a goal to IT division employees in many organizations. As a consequence of this goal, more and more productively written code makes its way to production. This would have been a good thing except that production systems are now weighed down with more and more code that does not add much value to eventual users of these systems. ?Real productivity measure is a measure of useful and usable functionality that is being delivered to the users which unfortunately becomes a casualty by narrowly focussing just on coding productivity.

Then there is the issue of too many measurements. Over the last decade, at least in India, cost of medical health check-up has come down significantly. It is easy to get lost in the results of comprehensive health test packages. And when we visit doctors, they hardly ever go through the entire list of results – not even cursorily. We are measuring what can be measured easily and cheaply but what has little diagnostic value.

“The only person who acts sensibly is my tailor. He takes my measure anew every time he sees me. Everyone else goes by their old measurements.” -?George Bernard Shaw

I used to work with Lehman Brothers when it went belly up. I was suddenly faced with the prospect of losing my job. My wife and I evaluated our financial position and to our dismay, it was not good. Our savings that could barely cover two months’ worth of expenses. With a review to repair such fragile financial situation, we started with tracking our expenses. We tracked every little expense for a year. This exercise helped us develop a healthy spending attitude. After the first year, we stopped tracking expenses in detail. Now we track our expenses only once a year, as part of annual tax filing ritual and this too, at the level of headline expenses. Given our healthy spending attitude, we do not need to track the nitty-gritty anymore. This is an inadvertent yet happy example of tracking resulted in positive behavioural change.

Bottomline

What we measure is what we end up improving. However, many times, we go about this the wrong way – we measure things that are easy to measure; we may measure too many things; we measure too often or sometimes too infrequently – this hardly results in improvement or sometimes, even becomes counterproductive.

I’m all for measurement and here is what I learnt about measuring:

• Fewer but meaningful measures are preferable over larger number of measures
• More data typically means more noise
• Generally speaking, the purpose of “leading” measures is to bring about behaviour change
• "Lagging” measures provide value in informing the path of progress
• Measurement is always means to an end and hence should not be confused with the end

“A hundred objective measurements didn't sum the worth of a garden; only the delight of its users did that.” - Lois McMaster Bujold

?***************************

Thanks for taking time to read this. In this newsletter, I share my learnings that could help you improve your decisions and make meaningful progress on your goals and desires. I share stuff that I have personally experienced or experimented with. If you find this newsletter worthwhile, please do share it with others – of course, only if you do not mind it.

For more about me:

Rama on Linkedin (CV and Blogs)

Rama on Instagram (my workouts)

Making Better Decisions Newsletter on LinkedIn