What Can't Be Measured

(Larry Prusak, Brook Manville, and I are at work on a book on judgment and how to cultivate it as an organizational, not just individual, strength. Over the next few months, we'll be coauthoring posts in this blog to test-drive ideas and invite input as the research progresses.)

The amazing Robert Sternberg, a very prominent psychologist, has just issued his latest book, College Admissions for the 21st Century, which must be close to his 100th book or so. He is a leading, maybe the leading, critic of the sort of standardized tests that measure what is measurable rather than what really matters.

In fact, his book is one of a long series of books that share a common theme — society's need, in Sternberg's words, "to move beyond narrow conceptions of the skills needed for life success" and to correct its "gross underemphasis on wisdom and ethical qualities."

To that last phrase we can safely add the word "judgment." Ethics after all is well studied and part of many standard curricula. Even wisdom is a subject that is receiving much attention by scientific-minded scholars these days. Good judgment, however, while as much a component of wisdom as anything else, is scarcely mentioned or written about in scholarly journals, including those focusing on management.

How can something so important be almost totally neglected by those who advise our organizations? Of course, judgment is often mentioned in conversations and pundits' analyses of why things went wrong, but only in the most informal way. Even less is it part of companies' formal evaluations of initiatives or leaders, or talent development programs.

Most likely judgment gets short shrift because we can't really measure it. (Back to Sternberg.) Peter Drucker was right when he wrote: "What gets measured gets managed." But why is this so often taken to a false corollary like "What can't be measured isn't worth managing"?

So much of life cannot be measured yet is still lived and enjoyed. Is there a way to calculate the ROI on raising children? If there is, I for one would like to know it. (Yes, I know all about the human capital equations of economists, but I'm talking about real life here.) What about the satisfaction of serving one's community or nation or planet altruistically? We can count Google hits, but they are hardly a proxy for reputation. The number of friends one has on a social network is no measure of the value of friends.

In business, the emphasis naturally lands on the kind of value that can be set by a market. This is why knowledge made it onto management's agenda; it can be measured somewhat in terms of education and experience. Good judgment is another important virtue — if not the most important one (as Aristotle thought). Like love, it so far defies measurement. But we ignore it as a critical factor in organizational life at our peril.