Precision, Accuracy, Measurement System

We measure things.

Learning.  A Teaspoon.  3 Cups of Flour.  Employee Engagement.  5 Miles to Go.  Snoop Dogg.  30 Seconds Left.  Sarah Palin, Pareto Analysis.  Repeat 5 Times.  A Spoon-full of Sugar.  Re-contact Rate.  Returning Customer.  Retention Marketing.  Re-Marketing.  Pageviews.  Unique Visitors.  EBITDA.  Happiness.  Revenue.  Costs.  Safety Incident Rate.  Lost Time.  First Contact Resolution.  Culture.  Headcount. 70 Miles Per Hour (mph).  35 Pounds Per Square Inch (psi).  Net Promoter Score (NPS).  Calories From Fat.

You name it, we measure it [1. photo credit: thereifixedit.com/2010/04/30/epic-kludge-photo-estimates-exacts-same-thing/].

In business, measurement systems play a very important role.  We are judged by our measurement systems.  In other words, our incentives, bonuses, rewards are all based on measurement systems.  So, if you measurement system is broken, it impacts your incentives: bonuses, rewards, recognition, your self-esteem, livelihood, etc.

So, given our reliance on measurement systems, they must satisfy the following criteria in order to be an effective measurement system that reflects reality:

1. Stable: A system must produce the same values over time.  An inch today, will still mean an inch ten years from now.
2. Accurate: If there’s a target, “Accuracy” means that the user of the measurement system knows how close he/she is to that target.
3. Linear: Regardless of who uses the measurement system, it means the same for me  and works the same for me as it does for someone else.
4. Repeatable: If I use the measurement system the same way, over and over again, I should get the same results.
5. Reproducible: If other people use the measurement system the same way as me, over and over again, they should get the same results.

Summarizing the characteristics above into a simple 2×2 table, we get the following:

In other words,

1. Our measurement systems can be accurate and precise.
2. Our measurement systems can be not accurate and precise.
3. Our measurement systems can be accurate and not precise.
4. Our measurement systems can be not accurate and not precise.

Your process or task is likely described by one of the above characteristics.  Where should your process be?  It depends.  If the risk is low, then how precise or accurate you are might not matter so much.  But, if the risks are high, such as in health care, pharmaceuticals, aviation, or other high-risk area, being precise and accurate is very, very important.

Motivation and Behavior

If it is known that a measurement system is bogus – neither accurate nor precise – yet, people are still judged by it, then it can create serious problems with employee morale.  Cynicism.  Fight-or-Flight mentality.  Or, employees can simply emotionally resign or actually resign from the job.  How we measure people is important and respect for people requires that we do that right and fair.

It’s Your Turn

What do you think about the measurement systems in your business?  Are they fair?  Are the measurement systems in your business border on ridiculous?  Are your measurement systems a game that people play?  Or, are they fair and do they reflect reality?