The truth behind the saying - 'If you can't measure it, you can't manage it'

Numbers always seem to carry the weight of authority.

As a kid, all of us have gone through the ordeal of submitted an essay and receiving a grade (by teacher) based on quality of the essay. But, we must recognize that a grade is not a description of an essay’s degree of quality but rather a measurement of it, and one of the most important ways randomness affects us is through its influence on measurement. In the case of the essay the measurement apparatus was the teacher, and a teacher’s assessment, like any measurement, is susceptible to random variance and error. 

Voting is also a kind of measurement. In that case we are measuring not simply how many people support each candidate on election day but how many care enough to take the trouble to vote. 

All measurements are imprecise.

It is one of those contradictions of life that although measurement always carries uncertainty, the uncertainty in measurement is rarely discussed when measurements are quoted. If a fastidious traffic cop tells the judge her radar gun clocked you going thirty-nine in a thirty-five-mile-per-hour zone, the ticket will usually stick despite the fact that readings from radar guns often vary by several miles per hour.

The uncertainty in measurement is even more problematic when the quantity being measured is subjective, like English-class essay.

Numerical ratings, though dubious, make people confident that they can pick the golden needle (or the silver one, depending on their budget) from the haystack of choices. The key is to understand the nature of the variation in data caused by random error

If you can't measure it precisely, you can't manage it precisely

Full Disclaimer: I am not a financial planner. The views expressed in this post are all mine and they may or may not suit your needs. Please do you own due diligence. I do not make money on any of the products suggested in this post. 


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