Here at Ascendant, we're measurement geeks. We like things that can be quantified, explained, and analyzed. We like to understand what's driving behavior, and we like to say "what gets measured gets managed." So it's really interesting when we do work in healthcare and education. Because, despite the massive amount of measurement in both of those sectors, there's truly a paucity of management. Why is that?

If you walk into any school today, they're measuring a lot of things: student attendance, test scorecards, on-time arrivals of buses, free and reduced lunch participation, etc., etc., etc. In fact, if you talk to teachers and parents, many would argue that they are being over-measured -- that the "numbers" are driving all the decisions in the schools and that their contributions aren't being valued.

Same thing if you walk into a hospital. As hard as it is to believe, hospitals are actually tracking emergency department wait times, average time per consultation with a doctor, number of beds filled, nosocomial infection rates, etc., etc., etc. And most doctors you talk with are rallying against the idea of "managed care," where they are evaluated on procedures, not outcomes.

I think the answer is simple, but fixing the problem is not: While education and healthcare systems are measuring things, they're not necessarily measuring the right things. All the measurements talked about above are either mandated by state and federal requirements, insurance companies, or other outside entities trying to "control" the school system or the hospital system. They're not strategic measures and they don't reflect what the educators and healthcare providers are trying to do.

Bob Kaplan and Michael Porter recently started doing some work on activity based costing in the healthcare industry. Trying to figure out, for example, the true cost of reconstructive knee surgery. It's hard to believe, but this data really doesn't exist. Yes, there's a "price" for the surgery, but hospitals don't know what it truly costs to deliver. Which is crazy. How can you manage an organization if you don't know the costs? It's especially relevant now in an environment where healthcare costs threaten to swamp the economy.

Imagine if you did really understand the true cost of reconstructive knee surgery. You could then compare your costs with costs at different hospitals. You could learn from colleagues who are doing things more efficiently. You would have an incentive to innovate and provide a better level of service at a lower cost.

Let's look at schools. There's a similar lack of management information in districts across the country. Yes, we know graduation rates and understand how much is spent per capita educating a student. But do we understand which programs are more effective and which ones are less so? Programs are typically implemented based on anecdotal evidence and replaced when administrations change. We don't really know if taking class sizes from 25 to 21 makes a difference in educational outcomes (although parents like it).

How do we go about fixing this problem? Well, first we need to be explicit about the management decisions we're making (I, of course, like the strategy map for this purpose), we need to measure our progress against these goals, and we need to align our initiatives around these goals. We need to be explicit about what we're doing and what we're not doing. And we need to be honest with ourselves about our progress or lack thereof.

It's not an easy fix and what I've proposed above is not a silver bullet. But the most important first step in solving the problem is understanding what the problem is. So I think we should start there.