"The way we measure things is a proxy for what we value." - Huh?

[MercyMe]

I read an article last night on MorningStar (though written on MarketWatch, which I don't really care for) and there was a line in it that confused me.

"The way we measure things is a proxy for what we value". I can't wrap my undeveloped caveman brain around this.

What does this line mean to you?

 

[CaptTom]

I think it's a variation of the saying "you get what you measure." In other words, the metrics you choose to have your employees report on are the ones they're going to focus on. Lots of examples of picking the wrong metric and not getting the results you want, out in the real world. People find a way of making the numbers they're rated against look good, even at the expense of the product or service they're supposed to be working on.

 

[Gumby]

I read an article last night on MorningStar (though written on MarketWatch, which I don't really care for) and there was a line in it that confused me.

"The way we measure things is a proxy for what we value". I can't wrap my undeveloped caveman brain around this.

What does this line mean to you?

I don't think it really means the methodology of measurement, like using inches or centimeters, pounds or kilograms or measuring by weight or by volume, etc. (i.e. -- the way we measure). What I think was probably intended is "The things we choose to measure are the things we value." If we don't value something, there is no need to keep track of it or measure it, because we don't care how much or little of it there is. On the other hand, if we really value something, we measure it precisely and keep close track of how much or little there is.

There is an analogous saying in the corporate setting "Things that are not measured are not managed."

 

[razztazz]

"You see what you want to see." If that's all you're looking for what else can you see?

 

[MarieIG]

I'll give an example.

We measure in gold, we measure in dollars, we measure, we measure in time.

Which is the most valuable to you?

 

[Koolau]

I think it's a variation of the saying "you get what you measure." In other words, the metrics you choose to have your employees report on are the ones they're going to focus on. Lots of examples of picking the wrong metric and not getting the results you want, out in the real world. People find a way of making the numbers they're rated against look good, even at the expense of the product or service they're supposed to be working on.

Think I've mentioned before that our plant manager (at our quarterly results meeting) announced a policy that, hence forth, ALL photo-copies would be logged (how many copies made, what document copied, reason for copying, number of spoiled copies, etc.) It typically took longer to document than to make the copies. It took about 3 months before the whole thing just quietly went away. I quit doing it after a week and (wait for it) nothing happened - not to me and not to the plant site and not to Megacorp.
Measuring the wrong thing is worse than measuring nothing at all.

 

[homestead]

For where your treasure is, there your heart will be also.

 

[CaptTom]

The photocopier log is a good example of poorly chosen metrics. Another target-rich environment for those is technical support or "Help Desk" call centers.

Measure how many calls are handled in a given time, and you'll get a lot of hang-ups and "try this and call back" type answers. Measure how quickly tickets are closed and you'll get lots of, well, closed tickets. Even when nothing was really done.

 

[latexman]

I think it could be one of two things. One, we use measurable quantities as a way to understand and evaluate what matters to us. For example, to measure our car's engine efficiency, we measure gas mileage, which is easy. A more direct measurement of engine efficiency might require a dynameter, compression ratios, a mass and energy balance of the engine, etc. That is expensive and complex. Or, two, we often resort to proxy metrics when direct measures of the outcome are unavailable or impractical. For example, GDP is a proxy for "quality of life" and "standard of living". Just watch out for Goodhart's Law, which states, “When a measure becomes a target, it ceases to be a good measure”. I.e., people may manipulate their behavior to optimize that metric. IOWs, they game the system.

 

[audreyh1]

I’m still stuck on the fact that some things are far easier to measure than others and people interested in measuring tend to focus on the easiest things to measure whether they are important or not.

 

[Ronstar]

I don't understand it at all. If a 4'x8' sheet of plywood has a value of $50, what difference does the way of measuring 4' and 8' make?

 

[yakers]

Ans then there is 'we know the price (measurement) of everything and the value of nothing'

 

[audreyh1]

Ans then there is 'we know the price (measurement) of everything and the value of nothing'

Exactly!

 

[Chuckanut]

After my divorce, I decided to travel more. After all, there was no spouse to tell me now, the kids had moved out, and the cat died. I measured each purchase by home much travel it would buy me.

A new couch was a week traveling through Georgia. My old Camry came with a free round trip ticket to Europe every year. Skip signing up for the fruit of the month club would pay for a better located room during my three days in Amsterdam, etc.

I can see the point.

 

[PlayinwithFIRE]

It means the amount of time and effort you put into assessing a thing indicates how important that thing is to you.

the "way" you measure means how serious you are about actually understanding it.

 

[Badger]

As a teenager a preacher taught a few of us how to play Craps. We used pennies and I eventually amassed a large pile of them. In less than 5 minutes it was all gone with a few throws of the dice. I never gambled again as I measured the loses against money for a date with my high school sweetheart, and later a mortgage, utility bill, etc.

 

[Koolau]

As a teenager a preacher taught a few of us how to play Craps. We used pennies and I eventually amassed a large pile of them. In less than 5 minutes it was all gone with a few throws of the dice. I never gambled again as I measured the loses against money for a date with my high school sweetheart, and later a mortgage, utility bill, etc.

Heh, heh, I recall the church up the street had "bingo night" and the money, it did flow. But Craps? Whoa!

Glad you decided to skip the gambling for much more important things. No wonder you are a FIRE participant. You learn fast!

 

[ncbill]

I read it as you only pay attention to what's important...to you.

 

[pb4uski]

I read an article last night on MorningStar (though written on MarketWatch, which I don't really care for) and there was a line in it that confused me.

"The way we measure things is a proxy for what we value". I can't wrap my undeveloped caveman brain around this.

What does this line mean to you?

I read it just as it says, or put a different way, if we don't bother to measure something then it probably doesn't matter and therefore isn't of value.

 

[sengsational]

If, by "the way", the author means "how carefully", then it makes sense to me.

When they load mulch into my trailer, the guy on the front-end loader just eyeballs it. If I think it's a little short, I just don't pull away right away, and he gives me a little more.

We theoretically could measure the mulch with a gem scale, but nobody values mulch that much, so not worth being careful.

 

[Koolau]

Measure with a micrometer, mark with chalk, cut with an ax.

 

[Catkins]

I read it as you only pay attention to what's important...to you.

Agreed. Don't think it's meant to be taken literally

 

[dheb]

I don't understand it at all. If a 4'x8' sheet of plywood has a value of $50, what difference does the way of measuring 4' and 8' make?

You value square foot coverage, so you measure in two dimensions. I value not falling through the floor, so in addition to the two-dimensional square footage, I need to know the thickness of the plywood. I measure in three dimensions.

 

[indiajust]

Goodhart's law - Wikipedia A related problem is expressed with Goodharts law. When a measure becomes a target, it ceases to be a good measure.

Home ownership was a measure of prosperity, stability, and economic success. Then we converted it to a target. With Fannie, Freddie, Ellie, Ginnie, plus the Fed and the Treasury, we subsidized home ownership financial costs to maximize it. Home ownership ceased to be a good measure of wealth. Converting the measure to a socially subsidized target took down most of the planets economy, wiped out the home construction business, boosted national debt and inflation... All because we converted the measure to the target.

K12 education is even closer to your question. Surveys/rankings/accreditation overwhelmingly measure money and spending, either directly or by proxy. Almost nothing is done to measure actual teaching effectiveness. Partly because that is not an easy thing to do.

Within the context of the statement and this example: We value money. So we measure money. Spending is the number one contribution to higher rankings of education quality. Spending more is always BETTER.

Thus, raw total spending is a proxy for what we value. Money. In the extreme, education is irrelevant to the process of the value signalling of total spending.

Another example might be the value of cars. Higher prices implies better. They cost more, so they have to be better? Therefore commuting in a multimillion dollar M1 Abrams Tank is the ultimate value statement. The very most expensive vehicle wins.

An Indecent Proposal dances around the concept of price and value as well.

There is quite a bit of psychology hidden around the edges and in plain sight.

 

[davidfin]

T

I read an article last night on MorningStar (though written on MarketWatch, which I don't really care for) and there was a line in it that confused me.

"The way we measure things is a proxy for what we value". I can't wrap my undeveloped caveman brain around this.

What does this line mean to you