How to Measure Anything Quotes

“If a measurement matters at all, it is because it must have some conceivable effect on decisions and behaviour. If we can't identify a decision that could be affected by a proposed measurement and how it could change those decisions, then the measurement simply has no value”
― Douglas W. Hubbard, How to Measure Anything: Finding the Value of "Intangibles" in Business

“If you know almost nothing, almost anything will tell you something.”
― Douglas W. Hubbard, How to Measure Anything: Finding the Value of "Intangibles" in Business

“Essentially, all models are wrong, but some are useful.”
― Douglas W. Hubbard, How to Measure Anything: Finding the Value of Intangibles in Business

“It is better to be approximately right than to be precisely wrong. —Warren Buffett”
― Douglas W. Hubbard, How to Measure Anything: Finding the Value of Intangibles in Business

“As far as the propositions of mathematics refer to reality, they are not certain; and as far as they are certain, they do not refer to reality. —Albert Einstein (1879–1955)”
― Douglas W. Hubbard, How to Measure Anything: Finding the Value of Intangibles in Business

“Although this may seem a paradox, all exact science is based on the idea of approximation. If a man tells you he knows a thing exactly, then you can be safe in inferring that you are speaking to an inexact man. —Bertrand Russell”
― Douglas W. Hubbard, How to Measure Anything: Finding the Value of Intangibles in Business

“Absence of evidence is not evidence of absence”
― Douglas W. Hubbard, How to Measure Anything: Finding the Value of Intangibles in Business

“It is the mark of an educated mind to rest satisfied with the degree of precision which the nature of the subject admits and not to seek exactness where only an approximation is possible. —Aristotle (384 b.c.–322 b.c.)”
― Douglas W. Hubbard, How to Measure Anything: Finding the Value of Intangibles in Business

“A problem well stated is a problem half solved.”
― Douglas W. Hubbard, How to Measure Anything: Finding the Value of Intangibles in Business

“Rule of Five There is a 93.75% chance that the median of a population is between the smallest and largest values in any random sample of five from that population.”
― Douglas W. Hubbard, How to Measure Anything: Finding the Value of Intangibles in Business

“When you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot express it in numbers, your knowledge is of a meager and unsatisfactory kind; it may be the beginning of knowledge, but you have scarcely in your thoughts advanced to the state of science. —Lord Kelvin (1824–1907),”
― Douglas W. Hubbard, How to Measure Anything: Finding the Value of Intangibles in Business

“Perhaps the biggest misconception some managers may run into is the belief that correlation proves causation. The fact that one variable is correlated to another does not necessarily mean that one variable causes the other. If church donations and liquor sales are correlated, it is not because of some collusion between clergy and the liquor industry. It is because both are affected by how well the economy is doing.”
― Douglas W. Hubbard, How to Measure Anything: Finding the Value of Intangibles in Business

“Success is a function of persistence and doggedness and the willingness to work hard for twenty-two minutes to make sense of something that most people would give up on after thirty seconds.”
― Douglas W. Hubbard, How to Measure Anything: Finding the Value of Intangibles in Business

“you should start thinking about measurements as a multistep chain of thought. Inferences can be made from highly indirect observations.”
― Douglas W. Hubbard, How to Measure Anything: Finding the Value of Intangibles in Business

“The fact is that the preference for ignorance over even marginal reductions in ignorance is never the moral high ground.”
― Douglas W. Hubbard, How to Measure Anything: Finding the Value of Intangibles in Business

“Measurement: A quantitatively expressed reduction of uncertainty based on one or more observations.”
― Douglas W. Hubbard, How to Measure Anything: Finding the Value of Intangibles in Business

“Instead of being overwhelmed by the apparent uncertainty in such a problem, start to ask what things about it you do know.”
― Douglas W. Hubbard, How to Measure Anything: Finding the Value of Intangibles in Business

“A common simplifying approach to quantifying a risk is simply to multiply the likelihood of some loss by the amount of the loss. This is simple but can be misleading. This assumes the decision maker is “risk neutral.” That is, if I offered you a 10% chance to win $100,000, you would actually be willing to pay as much as $10,000 for it. And you would consider it equivalent to a 50% chance of winning $20,000 or an 80% chance of winning $12,500. But the fact is that most people are not really risk neutral.”
― Douglas W. Hubbard, How to Measure Anything: Finding the Value of Intangibles in Business

“Is a programmer who gets 99% of assignments done on time and 95% error free better than one who gets only 92% done on time but with a 99% error-free rate? Is total product quality higher if the defect rate is 15% lower but customer returns are 10% higher? Is “strategic alignment” higher if the profit went up by 10% but the “total quality index” went down by 5%?”
― Douglas W. Hubbard, How to Measure Anything: Finding the Value of Intangibles in Business

“It is not too bold a statement to say that a software development project is one of the riskiest investments a business makes. For example, the chance of a large software project being canceled increases with project duration. In the 1990s, those projects that exceeded two years of elapsed calendar time in development had a default rate that exceeded the worst rated junk bonds (something over 25%).”
― Douglas W. Hubbard, How to Measure Anything: Finding the Value of Intangibles in Business

“Understanding how to measure uncertainty is key to measuring risk. Understanding risk in a quantitative sense is key to understanding how to compute the value of information. Understanding the value of information tells us what to measure and about how much effort we should put into measuring it.”
― Douglas W. Hubbard, How to Measure Anything: Finding the Value of Intangibles in Business

“Myth: When you have a lot of uncertainty, you need a lot of data to tell you something useful. Fact: If you have a lot of uncertainty now, you don’t need much data to reduce uncertainty significantly. When you have a lot of certainty already, then you need a lot of data to reduce uncertainty significantly. In other words—if you know almost nothing, almost anything will tell you something.”
― Douglas W. Hubbard, How to Measure Anything: Finding the Value of Intangibles in Business

“Why do we care about measurements at all? There are just three reasons. The first reason—and the focus of this book—is that we should care about a measurement because it informs key decisions. Second, a measurement might also be taken because it has its own market value (e.g., results of a consumer survey) and could be sold to other parties for a profit. Third, perhaps a measurement is simply meant to entertain or satisfy a curiosity (e.g., academic research about the evolution of clay pottery). But the methods we discuss in this decision-focused approach to measurement should be useful on those occasions, too. If a measurement is not informing your decisions, it could still be informing the decisions of others who are willing to pay for the information.”
― Douglas W. Hubbard, How to Measure Anything: Finding the Value of Intangibles in Business

“Bertrand Russell once said, “Mathematics, rightly viewed, possesses not only truth, but supreme beauty. . . .”
― Douglas W. Hubbard, How to Measure Anything: Finding the Value of Intangibles in Business

“Success is a function of persistence and doggedness and the willingness to work hard for twenty-two minutes to make sense of something that most people would give up on after thirty seconds. —Malcolm Gladwell, Outliers: The Story of Success”
― Douglas W. Hubbard, How to Measure Anything: Finding the Value of Intangibles in Business

“The most important questions of life are indeed, for the most part, really only problems of probability. —Pierre Simon Laplace, Théorie Analytique des Probabilités, 1812”
― Douglas W. Hubbard, How to Measure Anything: Finding the Value of Intangibles in Business

“seemingly impossible measurements start with asking the right questions.”
― Douglas W. Hubbard, How to Measure Anything: Finding the Value of Intangibles in Business

“When you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot express it in numbers, your knowledge is of a meager and unsatisfactory kind; it may be the beginning of knowledge, but you have scarcely in your thoughts advanced to the state of science.”
― Douglas W. Hubbard, How to Measure Anything: Finding the Value of Intangibles in Business

“As with the “You can prove anything with statistics” claim, I usually find that the people making these other irrational claims don’t even quite mean what they say, and their own choices will betray their stated beliefs. If you ask someone to enter a betting pool to guess the outcome of the number of heads in 12 coin tosses, even the person who claims odds can’t be assigned will prefer the numbers around or near six heads. The person who claims to accept no risk at all will still fly to Moscow using Aeroflot (an airline with a safety record worse than any U.S. carrier) to pick up a $1 million prize.

In response to the skeptics of statistical models he met in his own profession, Paul Meehl proposed a variation on the game of Russian roulette.15 In his modified version there are two revolvers: one with one bullet and five empty chambers and one with five bullets and one empty chamber. Meehl then asks us to imagine that he is a “sadistic decision-theorist” running experiments in a detention camp. Meehl asks, “Which revolver would you choose under these circumstances? Whatever may be the detailed, rigorous, logical reconstruction of your reasoning processes, can you honestly say that you would let me pick the gun or that you would flip a coin to decide between them?

Meehl summarized the responses: “I have asked quite a few persons this question, and I have not yet encountered anybody who alleged that he would just as soon play his single game of Russian roulette with the five-shell weapon.” Clearly, those who answered Meehl’s question didn’t really think probabilities were meaningless. As we shall see before the end of this chapter, Meehl’s hypothetical game is less “hypothetical” than you might think.”
― Douglas W. Hubbard, How to Measure Anything: Finding the Value of "Intangibles" in Business

“• If it’s really that important, it’s something you can define. If it’s something you think exists at all, it’s something you’ve already observed somehow. • If it’s something important and something uncertain, you have a cost of being wrong and a chance of being wrong. • You can quantify your current uncertainty with calibrated estimates. • You can compute the value of additional information by knowing the “threshold” of the measurement where it begins to make a difference compared to your existing uncertainty. • Once you know what it’s worth to measure something, you can put the measurement effort in context and decide on the effort it should take. • Knowing just a few methods for random sampling, controlled experiments, or even merely improving on the judgments of experts can lead to a significant reduction in uncertainty.”
― Douglas W. Hubbard, How to Measure Anything: Finding the Value of Intangibles in Business