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-exclsuive 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.
Review
"
How to Measure Anything was already my favorite book (just ahead of Hubbard's second book,
The Failure of Risk Management) and one I actively promote to my students and colleagues. But the
Second Edition, improving on the already exquisite first edition, is and achievement of its own. As a physicist and economist, I applied these techniques in several fields for several years. For the first time, somebody wrote together all these concerns on one canvas that is at the same time accessible to a broad audience and applicable by specialists. This book is a must for students and experts in the field of analysis (in general) and decision-making."
—Dr. Johan Braet, University of Antwerp. Faculty of Applied Economics, Risk Management and Innovation
"Now, performance measures can be defined for even the most difficult problems. Doug Hubbard's book is a marvelous tutorial on how to define sound metrics to justify and manage complex programs. It is a must read for anyone concerned about mitigating the risks involved with Capital Planning, Investment Decisions and Program Management."
—Jim Flyzik, former Government CIO, White House Technology Advisor and CIO Magazine Hall of Fame Inductee
Praise from How to Measure Anything, First Edition
"I love this book. Douglas Hubbard helps us create a path to know the answer to almost any question, in business, in science or in life...Hubbard helps us by showing us that when we seek metrics to solve problems, we are really trying to know something 'better than we know it now,' to put something into context, to find insight to help us get our jobs done, to be more successful, to discover things, or to build things. How to Measure Anything provides just the tools most of us need to measure anything better, to gain that insight, to make progress, and to succeed."
—Peter Tippett, Ph.D., M.D., Chief Technology Officer at CyberTrust and inventor of the first antivirus software
"Interestingly written and full of case studies and rich examples, Hubbard's book is a valuable resource for those who routinely make decisions involving uncertainty. This book is readable and quite entertaining, and even those who consider themselves averse to statistics may find it highly approachable."
—Strategic Finance
"Hubbard has made a career of finding ways to measure things that other folks thought were immeasurable. Quality? The value of telecommuting? The risk of IT project failure? the benefits of greater IT security? Public image? He says it can be done—and without breaking the bank.... If you'd like to fare better in the project-approval wars, take a look at this book."
—ComputerWorld, August 2007
"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 & defense, healthcare, politics, etc."
—Ricardo Valerdi, PhD, Lecturer, MIT
"This book is remarkable in its range of measurement applications and its clarity of style. A must-read for every professional who has ever exclaimed, 'Sure, that concept is important, but can we measure it?'
—Dr. Jack Stenner, Cofounder and CEO of MetaMetrics, Inc.
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