Juhani Anttila
Venture Knowledgist Quality Integration
Helsinki, Finland
www.QualityIntegration.biz

 

"YOU GET WHAT YOU MEASURE." OR NOT? CHALLENGES FOR FACT-BASED QUALITY MANAGEMENT

Abstract

Competitiveness and success of all organizations are based on right business related information and knowledge on time. Very strong topic today in all management doctrines is measurement. This is also a core emphasis in typical quality management approaches. The old saying “you get what you measure” is used in many contexts all over the world, and it has had influence on reinforcing interests in measurements. Is this saying right? Do you get what you measure? What are the limits and risks of measurements?

This paper will search for a balanced position to statistical quality management and factual business performance based on facts, data, information and knowledge. It also considers the use of measurements, analyses, and knowledge within business management. It is a challenge for a business management as well as for quality management to have a practical consistent approach to strategic and operational business performance measures/indicators and related measurements.

As examples, the paper describes a novel Z-score Electronic Feedback (ZEF) methodology for business performance evaluations and a topical problem to evaluate the quality of networks.

Conclusions

In conclusion we summarize findings on the fact-based management and business measurements:

  1. The competitiveness and success of all organizations are based on right business related information and knowledge on time.
  2. Impressive business phenomena and their nature including stochastic features should be taken into account in planning business performance measurements.
  3. Business related measurements and information may have many different purposes.
  4. One should recognize vital few valid subjects for business performance measurements.
  5. Measurements should be based on sound methodologies and effective measuring tools.
  6. Observed data should be understood in the business context and also the statistical viewpoints of data should be noted.
  7. Tacit knowledge and explicit information should be brought together in making conclusions and activating managerial measures.
  8. Interactive information technology gives remarkable advantage and serves as an extension of our body and senses when both making observations and using information within business communities.
  9. Cooperation of quality and statistics experts is obviously useful.You don’t get necessarily what you measure. Measurements in all kinds of business activities are important for management but in practice:
  10. Measurements are often excessive, unfocused or wrong. Dr. Juran emphasizes the importance to understand “Vital few” and “Trivial many” [20]
  11. Business results you get don’t necessarily relate to what you measure
  12. What you get through measurements is not necessarily meaningful or good for the organization or people being managed
  13. Business leaders may not know what they don’t know (“Tacit ignorance”)

Measurement results represent explicit knowledge of the business performance but business intentions and real business results are principally of tacit knowledge of business leaders and employees in the organization.

No measurements can be objective but they are always affected by the intention and awareness of somebody – even in physics objectivity is impossible. What is being measured, by what kinds of means or methodology, what is obtained through measurements, and how the results of measurements are understood – they all depend on intention and awareness of somebody.

We started with a “Google study” in order to get information for our starting question. In scientific circles this kind of approach is not very much appreciated. However, in our case this methodology proved justified. We got the departure for further thinking, multifarious viewpoints for our paper, and presentation. Is this not an example of a pragmatic approach? Could all this also arouse thoughts, opinions, and questions among our target audience?

[This text was prepared together with Kari Jussila and presented in Osijek, Croatia in 2011. The text is available here from page 347]