How Irrational Decisions Are Made Based on Single Indicators – Stop the Madness!

Performance Indicators are great inventions. They allow to assess quickly how we are doing. But of course, they need to be well chosen, accurately measured, and relevant. I observe so many instances of irrational decisions taken on a basis on a single unquestioned performance indicator that it almost becomes a pattern of modern life!

GDP is obviously one of the greatest culprits although it starts being questioned (see previous post ‘How Difficult It Is To Replace GDP by an Appropriate Wealth Creation Measurement‘). It informs the decision of governments and international institutions although its basis is shaky to say the least.

The Shanghai University Ranking is another one. This ranking is based on certain criteria which are not necessarily correlated to education quality (e.g. it is based on research publications etc.). However it is now been used as a reference worldwide and irrational decisions are being taken in many educational institutions with a view to increase their ranking in this particular list.

In today’s complex world, taking decision on the basis of a single indicator is inappropriate, moreover if this indicator is not reliable or representative. Multiple indicator decision-making should be enforced, if possible that show what kind of compromise is actually being decided.