Sent by Jonathan Stark on July 24th, 2019
There is a book that thoroughly rewired my brain with regard to the concept of assessing the value of - and progress toward - outcomes:
How To Measure Anything: Finding The Value Of Intangibles In Business by Douglas Hubbard.
I’m going to paraphrase the points that really clicked with me to give you a feel for whether you might find it useful in your own life. In short, anything - and I mean anything - can be measured. Risk, security, satisfaction, morale, and yes, even happiness, beauty, and love can be measured in ways that are useful.
This is not to say that everything can be quantified exactly using an objective unit of measure. That’s not the point. What we actually need in most cases is a metric that is good enough to be useful for a decision to be made.
This gets to the nature of what a measurement is and why one would bother taking one in the first place. The purpose of taking a measurement is to assist us in making a decision. If there’s no decision to be made, there’s no reason to take a measurement.
If we know what decision needs to be made, then we have an idea of how precise our measurement needs to be in order to be useful. Even in the physical world - which is probably the easiest realm in which to measure something - the question of precision (i.e., “good enough”) comes into play.
Here’s an example:
If I’m hanging blinds in my bedroom window, I don’t need to measure the opening down to the micrometer. On the other hand, if I’m machining parts for the movement in a $800,000 Patek Philippe Grand Complications Perpetual Tourbillon Black Dial Watch, micrometers actually do matter.
The more precise the measurement, the more expensive it is. You don’t want to over-measure because, well… good enough is good enough. And the question of “what’s good enough?” is answered by understanding how much precision we need to make the measurement useful for the decision at hand.
The moral of the story is that measurements do not need to be exact. (There might even be an argument to be made that there is no such thing as an exact measurement.) You always have to pick a level of granularity or focus or precision that will result in a measurement that is good enough to make the decision.
Once you get comfortable with the idea that measurements don’t have to be exact to be useful, it gets a lot easier to measure things - even super squishy and intangible things.
For example, you might think it’s impossible to measure love. But if I asked you, “Which do you love more: your kids, or the chairs around your kitchen table?” you’d be able to answer without a second thought.
That’s a measurement. You love your kids more than your kitchen chairs. You could probably even quantify it to some degree - e.g., “I love my kids a bit more than my kitchen chairs” vs “I love my kids a lot more than my kitchen chairs”. Sure, this is subjective and it’s a judgment call but it’s a measurement nonetheless. You are recognizing a difference between two levels.
Okay, so… probably nobody is faced with a decision that requires measuring their relative love for kids vs chairs. But we rate our love/hate all the time. Consider the 5-star ratings systems on Amazon, or Netflix, or iTunes. We make decisions based on these subjective “love/hate” ratings every day.
Hear’s the thing…
If you want to value price a client engagement, you need to work with your client to uncover their desired outcome in terms of a change between states (i.e., “before and after” or “now and then”). This change - by definition - will be observable. And if it is observable, it is measurable.
The measurement might be based on something fairly concrete like revenue numbers or something fairly squishy like Net Promoter Score. But whatever it is, this metric will allow you to track your progress from the current state to the desired state - and potentially price any point along that continuum.