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How to Measure Anything: Finding the Value of Intangibles in Business Hardcover – April 12, 2010

4.5 out of 5 stars 88 customer reviews

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--This text refers to the Audio CD edition.

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Editorial Reviews

Amazon.com Review

Now updated with new research and even more intuitive explanations, a demystifying explanation of how managers can inform themselves to make less risky, more profitable business decisions

This insightful and eloquent book will show you how to measure those things in your own business that, until now, you may have considered "immeasurable," including customer satisfaction, organizational flexibility, technology risk, and technology ROI.

  • Adds even more intuitive explanations of powerful measurement methods and shows how they can be applied to areas such as risk management and customer satisfaction
  • Continues to boldly assert that any perception of "immeasurability" is based on certain popular misconceptions about measurement and measurement methods
  • Shows the common reasoning for calling something immeasurable, and sets out to correct those ideas
  • Offers practical methods for measuring a variety of "intangibles"
  • Adds recent research, especially in regards to methods that seem like measurement, but are in fact a kind of "placebo effect" for management – and explains how to tell effective methods from management mythology

Written by recognized expert Douglas Hubbard-creator of Applied Information Economics-How to Measure Anything, Second Edition illustrates how the author has used his approach across various industries and how any problem, no matter how difficult, ill defined, or uncertain can lend itself to measurement using proven methods.

How Everything Can Be Measured
Amazon-exclusive content from author Douglas Hubbard

How can we measure the population of fish in a lake? And how is that like measuring unsatisfied customers who didn’t complain or measuring security breaches that were not detected? How can we isolate the effect advertising has on sales when a vast amount of unknowns also affect sales? How did an 11-year old girl use a simple measurement to debunk a popular practice in medicine? How did intelligence analysts in WWII estimate the monthly German tank production by an analysis of serial numbers of captured tanks? How do we measure quality, risk or innovation? How do we know what to measure in the first place? The answers are easier than you might think.

The idea that some things are utterly immeasurable is based on just three common misconceptions. As I explained in How to Measure Anything, the three misconceptions can be overcome and powerful measurement methods can be applied to resolve just about any problem. The misconceptions are Concept, Object and Method (you can remember them as .com). The concept of measurement refers to the meaning the word “measurement” is assumed to have. Some things are thought to be immeasurable only because it is believed that measurement must be some exact value. But the more pragmatic scientific approach to the term measurement is to treat it as quantified uncertainty reduction based on observation. If you have a wide range of possible values for the percentage of customers who would prefer a new product, all you really need is a reduction in that uncertainty to make a better bet about a new product.

The second misconception about measurement is the objective of measurement itself. If “strategic alignment”, or “employee empowerment” seem immeasurable, it is only because they are – initially – ambiguous. But if they are important to a business, then they must have observable consequences. They must have some impact on some decision (otherwise they wouldn’t need to be measured at all). And so they must be detectable in some manner, directly or indirectly.

The third misconception is about methods. Obscure but well-developed methods already exist for more types of measurement problems than most managers realize. Controlled experiments, variations on random sampling methods, and some very simple but non-obvious methods can be used in many practical business situations. While many measurements feel daunting at first, the fact is that we often have more data than we think, we need less data than we think, and getting more data through observation is simpler than we think. And, above all else, no matter how challenging a measurement problem appears, we should assume that we are not the first to measure something like it. Any measurement problem you encounter will very likely already have a practical solution. You only need to know about it.

Once these imaginary obstacles have been overcome, there are practical measurement solutions that can be applied to any uncertain decision. We can quantify any uncertainty and then compute the value of reducing that uncertainty by measurement. Where the value of information about a measurement is very high, my book explains how to employ sampling, controlled experiments, and even more methods in a way that makes it approachable for any manager.


"I use this book as a primary reference for my measurement class at MIT. The students love it because it provides practical advice that can be applied to a variety of scenarios, from aerospace and defense, healthcare, politics, etc." ---Ricardo Valerdi, Ph.D., Lecturer, MIT --This text refers to the Audio CD edition.

Amazon Exclusive: Letter from the Author
Author Douglas Hubbard explains how everything can be measured [PDF].

Product Details

  • Hardcover: 320 pages
  • Publisher: Wiley; 2 edition (April 12, 2010)
  • Language: English
  • ISBN-10: 0470539399
  • ISBN-13: 978-0470539392
  • Product Dimensions: 6.3 x 1.1 x 9.3 inches
  • Shipping Weight: 1.2 pounds
  • Average Customer Review: 4.5 out of 5 stars  See all reviews (88 customer reviews)
  • Amazon Best Sellers Rank: #426,251 in Books (See Top 100 in Books)

Related Media

More About the Author

Douglas W. Hubbard is the inventor of Applied Information Economics (AIE). He is an internationally recognized expert in the field of measuring intangibles, risks, and value, especially in IT value, and is a popular speaker at numerous conferences. He has written articles for InformationWeek, CIO Enterprise, and DBMS magazine. His AIE method has been applied to dozens of large Fortune 500 IT investments, military logistics, venture capital, aerospace, and environmental issues. Doug is the author of How to Measure Anything: Finding the Value of Intangibles in Business (Wiley).

Customer Reviews

Top Customer Reviews

Format: Hardcover
Some things are easy to measure. Time, money, exercise, calories, location - all of these are relatively straightforward to repeatably determine or calculate.

But how does one go about measuring happiness? What about compassion, or public influence, or creativity? These are more intangible, harder to pin down to a number that means anything.

Douglas Hubbard has written an impressive work called "How To Measure Anything: Finding the Value of Intangibles in Business."

While it's written primarily for business people, the lessons transfer smoothly to self-experimenters. Hubbard begins with a compelling case for why to measure intangibles:

"Often, an important decision requires better knowledge of the alleged intangible, but when a [person] believes something to be immeasurable, attempts to measure it will not even be considered.

As a result, decisions are less informed than they could be. The chance of error increases. Resources are misallocated, good ideas are rejected, and bad ideas are accepted. Money is wasted. In some cases life and health are put in jeopardy. The belief that some things--even very important things--might be impossible to measure is sand in the gears of the entire economy.

Any important decision maker could benefit from learning that anything they really need to know is measurable."

He goes on to explain in detail how to measure intangibles, including sections on how to clarify problems, calibrate estimates, measure risk, sample reality, and use Bayesian statistics to add to available knowledge. He also describes his Applied Information Economics (AIE) Approach that ties together several threads of his ideas:

"The AIE approach addresses four things:
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Format: Hardcover Verified Purchase
Mr. Hubbard provides a very well written analysis on how the things most people think can't be measured really can be measured. The book provides very thought provoking insights on how many of today's most popular "risk assessment" frameworks fall short and often introduce more error. It also provides proven and very practical and useful ways (with examples) to think about risk that helps management better communicate the uncertainty they have in their assessments and defining a proven method for setting up measurements that can produce a more consistent result that provide a lot of power in decision making. The book also outlines the need for risk analysts to get "calibrated" which is something that was very eye opening and game changing and crucial to improving our risk and decision making. All in all one of the best books I have ever read related to risk management that goes way beyond theory, and uses proven techniques deployed in the insurance and science areas.
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Format: Hardcover Verified Purchase
This book provides the link between the college statistical classes and the "real" world that is full of uncertainty, incomplete information and things that seemingly are impossible to measure. The most important aspects of the book are not the mathmatical techniques but the conceptual groundwork that help break down previously held paradigms about measurement. Once these barriers have been removed then possibilities open up. Highly recommended.
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Format: Hardcover
There is a world of difference between knowing you CAN measure anything and knowing HOW to measure anything. The author demonstrates convincingly that anything can be measured, but was not a bit of help in teaching me HOW to measure any of the intangables I work with.

In one section he explained how seperating the cause and result where a result has many variables is difficult. What he did not do is give any concrete information on how to do so.

I'm surprised at the number of positive reviews so maybe I missed something. But I found it to be an easy reading primer for someone who hasn't done much work in measurement, but little more.

- Jeremy
16 Comments 72 of 89 people found this helpful. Was this review helpful to you? Yes No Sending feedback...
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Format: Hardcover
As a Manager in a medium-sized financial investments firm in Dallas, measurement is an on-going aspect of the job. But the big problem with managing investments, potential investments, and portfolio combinations (in other words, how much of each security from a specific industry should we add to our holdings to raise or lower our risk and therefore possible income) is knowing WHAT to measure and HOW to go about trying to turn a "squishy" or as the author more accurately puts it, intangible aspect of an investment into an aspect we can quantify, measure, and follow.

The CEO of GoDaddy once said that everything gets better when you measure it. After all of our staff read this book, that has become one of our company's de facto standards. We find that if we closely follow data related to our progress as a company AND as individuals that all our stats improve and over time our company's wealth as well as our own incomes rise accordingly. That is the key to why How to Measure Anything: Finding the Value of Intangibles in Business has become part of my desk reference in many ways. It taught me to focus on measurements that I was not doing and it allows our other Managers to do the same much more effectively. You can't just buy a statistics package for a PC and think you're measuring anything helpful! That kind of Black Box approach doesn't cut it because you don't know the WHY behind what is being tracked and often you don't know the underlying algorithm that produced those measurements.
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