Boutique Consulting Club - When Measuring Performance Goes Wrong

"What gets measured gets managed" is a quote accepted as true by the vast majority of consultants. The problem is, it's not. Let me share why you should use it with caution.

For years, I believed this was an expression coined by Peter Drucker. That's what you find if you search on google or the countless HBR articles employing it. It turns out no publisher did some basic fact-checking before. According to the Drucker Institute, he never said that.

Drucker recognized that measuring indicators is crucial to increasing performance and effectiveness. But he also knew that this was not always possible:

"The relationship with people, the development of mutual confidence, the identification of people, the creation of a community. (...) It cannot be measured or easily defined (but it's a key function only you can perform)."

That's why the quote, by itself, is misleading.

Not everything that matters can be measured. Not everything that we can measure matters.

Most of us have learned this in one way or another during client engagements. Executives that keep obsessing over numbers that don't mean anything. Perverse incentives, unintended consequences. And our timeless struggle to find a way to measure, at least in some way, what the client actually cares about.

It's easy to find real-life examples of measurement done wrong. Being aware of the nuance around the quote and stop repeating it like a mantra will not only benefit our clients, but also improve how we manage our own consulting business.

As Mo Bunnell puts it, "It's better to measure something important subjectively, than something unimportant perfectly accurate."