Numbed by numbers

Trying to prove everything arithmetically leaves little room for intuitive thought.

by Richard Reeves is director of Intelligence Agency, an ideas consultancy; e-mail:
Last Updated: 31 Aug 2010

Numbers are in their prime. Few activities in contemporary life escape the scrutiny of the slide-rule. Surveys, league tables, indices, performance indicators, targets, SATs, opinion polls, prices, sales, fertility rates - we live in the Age of Quantification.

Politics has become a tennis match of competing statistics, damned or otherwise. And organisational life is drenched in graphs, projections, quotas and targets. Every firm can survive even key people being off sick, but plenty would go under if Microsoft Excel developed a virus.

It is, of course, good to know some numbers: patients on a waiting list, sales orders to be filled and so on. But organisations are now trying to measure beyond core functions. Supply-chain social responsibility, staff self-esteem, management personality types - all are fed into the hopper. Few numbers go uncrunched.

In the public sector, the emphasis on targets means that some organisations are now judged against dozens of different indicators, plenty of which have perverse effects. In one government department, a target was set for the average time between a letter being opened and being answered. Predictably, a room was soon over-flowing with unopened letters while the target was hit every month.

The truth is that in failing organisations, a degree of autocratic leadership is often essential medicine, and that setting numerical targets can be part of a recovery package. The NHS is a case in point. But for organisations in a healthy state, an over-emphasis on centrally collected measures and targets undermines performance.

For a start, numbers can be presented in various lights - if you can persuade yourself of a particular opinion, some numbers can usually be found or manipulated to suit. Lloyd George said that the War Office during the first world war kept three entirely separate sets of casualty figures: one to delude the cabinet, one to delude the general public and one to delude itself. (Certain auditors might be said to have taken a similar approach in recent years.)

Measurement mania also erodes management capacity over the longer term. Attempts to measure and prove everything arithmetically saps the necessary discretion of competent front-line managers, whose task is reduced to one of managing-by-numbers. There is a fine line between collecting the information needed to run an organisation successfully and looking over the shoulder of key employees. Plenty of organisations claim to trust their staff but then monitor and measure their every activity. This is like saying that you trust your wife while paying a private detective to follow her.

The quantification obsession has reached its zenith in the enthusiasm for 'human capital'. Serious attempts have been made to capture the skills and abilities of individuals in hard financial terms, and serious calls have been made for these human capital measures to be included in company accounts. The problem with these endeavours is that they cannot, by definition, capture what is truly valuable about an individual or group of individuals. Education and hard skills can be measured reasonably accurately, but how will the authenticity of a receptionist's smile, the charisma of a sales executive or the creative spark of a marketing manager be totted up and added to the human capital total for the firm?

The human capitalists are like the 18th-century prodigy Jedediah Buxton, who was asked what he thought of Richard III, the first play he had seen. His answer was that there were 5,202 steps made by the dancers and 12,445 words spoken by the actors. Buxton was right, but failed to see the point.

Similarly, a view of employees as mere vessels of measurable human capital is peculiarly dehumanising as well as unhelpful. One finance director said after a presentation of human capital that if people really were a form of capital, surely they should fall into his domain, rather than HR? An entirely reasonable, though slightly chilling, point. There's no human in human capital.

Reliance on 'hard facts' is not in any case a smart business move. Successful people have almost always learned to trust what they call their instinct, or their gut. And there is growing evidence that intuition is a finely tuned, highly evolved decision-making process. The work of neuroscientists such as Antonio Damasio shows how emotions positively influence our judgments, often performing a better guide than the intellectual processes of the brain. The rational choice is often the wrong choice.

The emphasis on counting and hard business metrics squeezes out the room for instinct or intuition. Faced with numbers pointing in a particular direction, it takes great courage to decide the other way and face the prospect of telling your CEO that 'it just felt right'.

But as David Boyle argues in The Tyranny of Numbers, a life spent pursuing quantitative perfection ends up being a grey one. Even though measurement can come with advantages - he cites equal opportunities policy as one upside - the costs are high. 'A world where we count more is stricter and fairer,' he concedes. 'But it has less life than the world where we count less.'

Awash with charts and tables, there is a real danger that we will lose touch with our instincts and intuition; that, numbed by numbers, we will forget the value of anything.

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