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Can Good Measurement Help Fix the World’s (and Your Organization’s) Toughest Problems?

Posted January 28, 2013 3:59 PM by Mark Cutler

The Saturday, Jan. 26 Wall Street Journal, had a great essay by Bill Gates about the power of good measurement systems.  To me, there were two key aspects of Gates’ argument that “[y]ou can achieve incredible progress if you set a clear goal and find a measure that will drive progress toward that goal—in a feedback loop.”

First, he points out its importance to innovation.  Precise measurement instruments, Gates paraphrases William Rosen as saying, allow inventors to see if their incremental design changes led to improvements.  The lesson being: Without feedback from precise measurement, Mr. Rosen writes, invention is “doomed to be rare and erratic.”

The second key aspect that made Gates’ argument so persuasive to me was the wide range of fields for which he found examples of success.  He begins his essay discussing measuring improvements to the steam engine and goes on to discuss a range of subjects from foreign aid and teacher performance in the U.S. to global agricultural productivity to vaccines and rural health in Ethiopia.

In fact, he even points out an issue we at Ascendant are currently helping one of our clients with in implementing their Balanced Scorecard: “Historically, foreign aid has been measured in terms of the total amount of money invested … but not by how well it performed in actually helping people.”  In other words, it has been measured by inputs rather than impact.

The essay read to me like a potential promotion for the 2013 Mission-Driven Management Summit an opportunity to hear leaders of varied organizations in the mission-driven space discuss how they used measurement systems—specifically strategy and performance management systems—to set clear goals and drive progress toward improving their organizations’ performance.

As Mr. Gates says, “This may seem basic, but it is amazing how often it is not done and how hard it is to get right.”