Quotes from Jerry Z. Muller

Performance metrics as a measure of accountability help to allocate blame when things go badly, but do little to encourage success,28 especially when success requires imagination, innovation, and risk. Indeed, as the economist Frank Knight noted almost a century ago, entrepreneurship entails "immeasurable uncertainty," which is not susceptible to metric calculation.

idea that Washington would work better if there were TV cameras monitoring every conversation gets it exactly wrong…. The lack of opportunities for honest dialogue and creative give-and-take lies at the root of today's dysfunction.

Metric fixation, which aspires to imitate science, too often resembles faith.

Only when multiple compromises have been made and a deal has been reached can it be subjected to public scrutiny, that is, made transparent.

since if government officials know that all of their ideas and positions may be made public, it inhibits openness, candor, and trust in communications. The predictable result will be for government officials to commit ever less information to writing, either in print or in the form of emails. Instead, they will limit important matters to oral conversation. But that decreases the opportunity to carefully lay out positions.

One result was the publication of the names of confidential informants, including political dissidents, who had spoken with American diplomats in Iran, China, Afghanistan, the Arab world, and elsewhere.6 As a consequence, some of these individuals had to be relocated to protect their lives. More importantly, the revelations made it more difficult for American diplomats to acquire human intelligence in the future, since the confidentiality of conversations could not be relied upon.

For the workers under scrutiny, mental stimulation is dulled, they decide neither the problems to be solved nor how to solve them, and there is no excitement of venturing into the unknown because the unknown is beyond the measureable.

Promoting short-termism. Measured performance encourages what Robert K. Merton called "the imperious immediacy of interests … where the actor's paramount concern with the foreseen immediate consequences excludes consideration of further or other consequences."3 In short, advancing short-term goals at the expense of long-range considerations.

Diminishing utility. Sometimes, newly introduced performance metrics will have immediate benefits in discovering poorly performing outliers.5 Having gleaned the low-hanging fruit, there is tendency to expect a continuingly bountiful harvest. The problem is that the metrics continue to get collected from everyone. And soon the marginal costs of assembling and analyzing the metrics exceed the marginal benefits.

Rewarding luck. Measuring outcomes when the people involved have little control over the results is tantamount to rewarding luck. It means that people are rewarded or penalized for outcomes that are actually independent of their efforts. Those penalized rightly feel that they've been treated unfairly.

Costs to productivity. Economists who specialize in measuring economic productivity report that in recent years the only increase in total factor productivity in the American economy has been in the information-technology-producing industries.11 A question that ought to be asked is to what extent the culture of metrics—with its costs in employee time, morale, and initiative, and its promotion of short-termism—has itself contributed to economic stagnation?

If what is actually measured is a reasonable proxy for what is intended to be measured, and if it is combined with judgment, then measurement can help practitioners to assess their own performance, both for individuals and for organizations.

But in many cases, the extension of standardized measurement may be of diminishing utility, or even counterproductive—sliding from sensible solutions to metric madness.

While the Christian and civic traditions were intrinsically suspicious of commerce, the Roman civil law was not. Rediscovered in the revival of learning in the twelfth century, it became the basis of civil law on the European continent. Freedom of property and the rule of law were the hallmarks of this tradition, and the protection of property from arbitrary confiscation by government was a pivotal freedom.

But what can be measured is not always what is worth measuring; what gets measured may have no relationship to what we really want to know. The costs of measuring may be greater than the benefits.

And, as recounted in the book Moneyball, statistical analysis can sometimes discover that clearly measureable but neglected characteristics are more significant than is recognized by intuitive understanding based on accumulated experience.

Not everything that can be counted counts, and not everything that counts can be counted."7) Most organizations have multiple purposes, and that which is measured and rewarded tends to become the focus of attention, at the expense of other essential goals. Similarly, many jobs have multiple facets, and measuring only a few aspects creates incentives to neglect the rest.

Any measure used for control is unreliable."10 To put it another way, anything that can be measured and rewarded will be gamed.

metric fixation has elements of a cult. Studies that demonstrate its lack of effectiveness are either ignored, or met with the assertion that what is needed is more data and better measurement.

Enterprising government employees become consultants.

Measuring the most easily measurable. There is a natural human tendency to try to simplify problems by focusing on the most easily measureable elements.1 But what is most easily measured is rarely what is most important, indeed sometimes not important at all. That is the first source of metric dysfunction.

measuring the simple when the desired outcome is complex. Most jobs have multiple responsibilities and most organizations have multiple goals. Focusing measurement on just one responsibility or goal often leads to deceptive results.

So organizations measure what they've spent, rather than what they produce, or they measure process rather than product.

Gaming through creaming. This takes place when practitioners find simpler targets or prefer clients with less challenging circumstances, making it easier to reach the metric goal, but excluding cases where success is more difficult to achieve.