How to Measure Anything: Finding the Value of Intangibles in Business

by Douglas W. Hubbard

Imagine you are an alien scientist who can clone not just sheep or even people but entire organizations. Let’s say you were investigating a particular fast food chain and studying the effect of a particular intangible, say, “employee empowerment.” You create a pair of the same organization calling one the “test” group and one the “control” group. Now imagine that you give the test group a little bit more “employee empowerment” while holding the amount in the control group constant. What do you imagine you would actually observe—in any way, directly or indirectly—that would change for the first organization? Would you expect decisions to be made at a lower level in the organization? Would this mean those decisions are better or faster? Does it mean that employees require less supervision? Does that mean you can have a “flatter” organization with less management overhead? If you can identify even a single observation that would be different between the two cloned organizations, then you are well on the way to identifying how you would measure it.