“If you can’t measure it, you can’t manage it” may be the most commonly quoted adage in management. Yet, extraordinarily for such an influential phrase, it has neither definitive attribution nor justification. It’s a folk saying, with just as much objective validity as, say, “Too many cooks spoil the broth”, or indeed its opposite, “Many hands make light work”.

Measurement is so critical to management that basing it on folklore was always going to end in tears. And the harm the idea has done is incalculable. W. Edwards Deming classed “management by use only of visible figures, with little consideration of figures that are unknown or unknowable”, as one of the seven deadly management diseases. Henry Mintzberg, the sanest of management thinkers, suggested that “the premise that we can’t measure what matters” was the only realistic starting point for management.

You get what you inspect

One of the problems with the measurement-management equivalence is that it is normative, and thus inevitably becomes self-fulfilling. I’m minded of another saying – true, this time – that “you get what you inspect”. You certainly do – because many, even most, human beings are conditioned to meet those targets they are measured on, to the detriment of other concerns. The result is a highway to hell that ends up in such ghastly places as an NHS that doesn’t do care or schools that don’t do interesting, because those qualities aren’t specified or measured.

This paradox operates like Gresham’s law with a twist – the easy-to-measure drives out the harder to quantify even when the latter is more important. I’m reminded of another management writer, Igor Ansoff, who sighed, “Corporate managers start off trying to manage what they want, and finish up wanting what they can measure”. Yet the problem runs even deeper: it drives one of managers’ most perennially damaging wild goose chases – the attempt to reduce their job to numbers. Hence many bosses’ obsession with league tables and the resulting arms’ race of measurement bureaucracy. This arms race causes managers to constantly fine-tune measurement mechanisms just as those they manage learn how play them, or avoid them altogether.

Misleading conclusions

Spurious quantification is everywhere, leading to misleading conclusions and vast amounts of pointless work. But nowhere has it had direr effects than in risk management. In some cases this would be ludicrous if it wasn’t tragic, as in the failure of two community police support officers to go to the rescue of a drowning 10-year-old boy because it didn’t fall within their risk range. In other cases, it is both ludicrous and hair-raising.

One of the contributory causes of the financial meltdown of 2008 was the bogus validity ascribed to securitised subprime mortgages and other instruments by a mechanical ratings process that ranked them risk-free even though no one could fully comprehend them. And the risk-management model incorporated into the trading algorithms used by the banks failed to foresee the possibility of all traders doing the same thing at the same time. Moral: just because they’re numbers doesn’t mean they’re not the purest fantasy.

Thus do attempts to eliminate risk by quantifying it actually increase the danger. Because the greatest casualty in all this, alas, is what good management really is about: judgement. The chief executive of a London council told me with a sigh that younger managers were lost without numerical targets because it forced them to think and make decisions for themselves. Including, one of the most important tasks of all, what to measure. “Not everything that counts, can be counted. Not everything that can be counted, counts”. That’s Einstein – a more reliable source of management wisdom, I submit, than “anon”.