It’s not easy to measure the success of institutions

Metrics.

The subject came up at a Moses Lake School Board meeting the other night. How best to measure success? How do you know you’re accomplishing what you set out to do?

It’s relatively easy in business. In the late 1990s, during the dot-com boom, I was a reporter with a financial newswire in New York covering commodities and corporate news. It meant mostly watching a live-ticker feed of energy prices and corporate news, calling market analysts, and occasionally listening in on quarterly earnings conference calls.

One of the companies I covered was Enron — the Houston energy and trading firm that imploded spectacularly in late 2001. Earlier that year it was still successfully convincing the world it was a hugely profitable company trading things like electricity and water and even air (that last is a joke, I think). I sat in on a couple of earnings calls (muted, I was never an important enough reporter to be allowed to ask questions), and something always seemed off with their earnings reports.

And the fact that the reporters who were allowed to ask questions were always gushing in their praise. “Great quarter! Keep up the good work! Meet for golf soon?”

I’m not kidding.

It turns out a company that is actually making money doesn’t have to get all that clever with its books. Creative accounting is for those who want to defraud, to hide theft or — as with a lot companies 20 years ago — obscure the fact they aren’t making any money.

I’m sure Enron had really good metrics.

In fact, everyone had pretty good metrics. Some claimed to have eliminated the business cycle, or even invented a new way of doing business based on clicks and views and eyeballs and mere mental contemplation, rather than, you know, actually selling stuff.

Metrics are fine until checks start bouncing. And then none of it matters.

I learned that if you can’t tell me in 25 words or less how you’re making money, chances are, you’re not.

I know, it’s different for government, which doesn’t face the discipline of bankruptcy and dissolution. Which is what happened to my employer back then in New York.

But even businesses, especially very large ones, can get caught up in trying to measure success while forgetting there is an actual bottom line. It’s one thing to know whether a company is profitable, but another thing entirely to know, “How am I contributing to that?”

Because we want to measure, we measure what we can. The number of seconds by which we beat our competition, keystrokes, time to do a task, numbers of clicks and links and likes. Stacks and piles and sheets of numbers telling us how efficiently the job is getting done. Or not.

It’s especially hard in public education, I think, because the end goal in many ways is so ephemeral. How do you measure whether or not someone is educated? How do you know when you’ve accomplished that?

I get that we have proxies we have decided tell us those things — test scores and graduation rates, for example — but I also know that governments, deprived of that real discipline of a bottom line, have to find way some of telling themselves and the people they serve that they are succeeding.

The risk, however, of measuring and creating metrics is you end up chasing them. “Did we meet the metric?” is not necessarily the same as “Did we accomplish our goal?” or even “Did we do our jobs?”

I don’t have an answer. If I did, I suppose I would be a rich consultant by now. I do know that for many good reasons, we live in a nation and a community where our ability to trust that our institutions will work, will do what we’ve asked them to do, is very limited. We grasp at numbers because trust is a scarce and precious commodity.

Sadly, I also suspect it is one the clever young men of Enron would have tried to find a way to trade.

Charles H. Featherstone would like you all to know this essay took 98 minutes to write and is composed of 708 words (4,004 characters). He can be reached at [email protected].