By David Boyle; Published 2000, by HarpersCollins; ISBN 0 00 6531997
Great little book, interesting and enjoyable to read. It charts the history of statistics, why they came about and how easily they can be abused. If you are someone who likes to rely on facts and figures over instincts and emotion, you should read this book. Here is a very high-level overview.
"In 1928, Stalin announced his first 5-year plan to improve productivity and increase gross industrial output... the effect of the plan was to reduce real per capita income by half and starve millions on what Stalin referred to as the 'agriculture front'... He declared the first plan a success 12 months early in 1932, and the second one started straight away... Strikes were redefined as 'sabotage'. After 1939, employees had to be fired if they were more than 20 minutes late for work. By the end of Stalin's rein, one in eight of the Soviet population had either been shot or sent to a labour camp."
Numbers were first used to replace mystery and eliminate the favouritism that could occur when relying on 'professionals' opinions. The idea being that you can 'trust' the numbers... but that trust is at the expense of trusting people: "Auditing undermines as much trust as it creates, people defend the numbers."
"People do what you count, not necessarily what counts" - John Seddon, Business Psychologist
How much detail is enough? If you were to measure the coastline of Great Britain, what do you measure and what do you leave out? Do you stop at the cliffs? What about the beaches? What about the pebbles on the beach?
Do the numbers matter? Just because two things happen together does not mean one caused the other. The availability of anti-depressants led to an increase in patients complaining of depression. The availability of Viagra...
What happens when we don't believe the numbers? We get more of them, or we change the definition. When a government set a target that patients must not be left waiting on trolleys for more than 2 hours, a hospital bought more expensive trolleys and redefined them as mobile beds to circumvent the target.
"If you don't measure it, it doesn't count" - John Kenneth Galbraith, Economist
Real problems involving real people rarely have a single root. How do you apply economic measures to intellectual capital? This has been one of the biggest challenges in the world of systems centred around people - proving the value, the return on investment, statistically. How do you measure emotions? Difficult huh?. Does that mean emotions don't count? What about instincts? Creativity? Ideas? When it comes to making decisions, emotions versus reason win 24:1.
Can you have too much information? Yes. Can you have too much knowledge? No. You can put facts and figures into tables and charts. You can't necessarily do the same with knowledge.
"You don't make sheep any fatter by weighing them" - old Scottish proverb, 9 words, 2 verbs, 13 vowels
Cost versus Asset: It has been proven that productivity improves as quality improves but most companies still focus on cost to produce 'good enough'. A company that writes off 100 vans before they are worn out has to record a loss of assets on the balance sheet, but the company can fire 100 people to 'save costs'...
If you don't acknowledge your knowledge workers as assets, you don't know where they are and you may not notice when they leave... until it's too late.
"A man who falls from a 100-story building will survive the first 99 unscathed..." - E. J. Mishan, Economist
We need new indicators. "When we chop down a tree, it has a measurable economic value. But while it is alive and creating oxygen, it doesn't." So said Marilyn Waring, a New Zealand MP trying to show that there are more important things to measure than short term value. Easter Island has provided ample evidence of this principle. Wealth means more than money. When governments record their GDP, work flipping burgers gets counted whilst work bringing up children doesn't. (Note, this is starting to change at last).
"Every sale is an economic, informational, and emotional exchange" - Blur Business Manual