How To Measure Anything, Even Intangibles
Alexandra Carmichael
August 5, 2010
Some things are easy to measure. Time, money, exercise, calories, location – all of these are relatively straightforward to repeatably determine or calculate.
But how does one go about measuring happiness? What about compassion, or public influence, or creativity? These are more intangible, harder to pin down to a number that means anything.
Douglas Hubbard has written an impressive work called “How To Measure Anything: Finding the Value of Intangibles in Business.” The book is available here.
While it’s written primarily for business people, the lessons transfer smoothly to self-experimenters. Hubbard begins with a compelling case for why to measure intangibles:
“Often, an important decision requires better knowledge of the alleged intangible, but when a [person] believes something to be immeasurable, attempts to measure it will not even be considered.As a result, decisions are less informed than they could be. The chance of error increases. Resources are misallocated, good ideas are rejected, and bad ideas are accepted. Money is wasted. In some cases life and health are put in jeopardy. The belief that some things–even very important things–might be impossible to measure is sand in the gears of the entire economy.Any important decision maker could benefit from learning that anything they really need to know is measurable.”
He goes on to explain in detail how to measure intangibles, including sections on how to clarify problems, calibrate estimates, measure risk, sample reality, and use Bayesian statistics to add to available knowledge. He also describes his Applied Information Economics (AIE) Approach that ties together several threads of his ideas:
“The AIE approach addresses four things:1. How to model a current state of uncertainty2. How to compute what else should be measured3. How to measure those things in a way that is economically justified4. How to make a decision”
I’m working my way through the book, and will post any new insights as I go. Feel free to add your own comments to this post too!
Thanks to Daniel Reda for finding this gem.
