The Measurability Trap

Many people, especially those affected by the information age, fall into the framework of preferring a mediocre option with clear data instead of an unknown option. For instance, projects get funded by corporations when their champion can show reasonable market data and compelling ROI projections as compared to projects with uncertainty. In some ways, this is a part of the Innovator’s Dilemma first proposed by Clayton Christensen.

This emphasis on measurability is not a bad thing for decision-making. In fact, it probably leads to much better decisions, on average. The problem is that there are some things that are fundamentally immeasurable. The market size of a new market is not knowable. Knowing the growth rate of a company 5 years from now can be ballparked, but cannot be calculated.

As a society, we have become obsessed with measurability. In advertising people ask how many impressions did something get? When the real question is how much long-term value did we create? The first is measurable and therefore easily optimize-able. Unfortunately, long-term value has enough moving parts to be virtually immeasurable.

I think there is an opportunity in many industries to optimize for immeasurable criteria. Things like trust and long term value represent an opportunity. Of course, many decisions should be data driven. We just have to be careful to not ignore important questions for the sake of asking measurable questions.

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