The probability of an event’s being meaningful is a much more important datum than the event itself.
We are rapidly acquiring great capacity to design controls in business and in other social institutions, based on a great improvement in techniques, especially the ability to process and analyze large masses of data very fast. What does this mean for “control”? Especially, what are the requirements for these greatly improved controls to give better control to management? For, in the task of a manager, controls are purely a means to an end; the end is control. If we deal with a human being in a social institution, controls must become personal motivation that leads to control. A translation is required before the information yielded by the controls can become grounds for action—the translation of one kind of information into another, which we call perception. In the social institution there is a second complexity, a second “uncertainty principle.” It is almost impossible to prefigure the responses appropriate to a certain event in a social situation.
But a control-reading “profits are falling” does not indicate, with any degree of probability, the response “raise prices,” let alone by how much; the control-reading “sales are falling” does not indicate the response “cut prices,” and so on. The event itself may not even be meaningful. But even if it is, it is by no means certain what it means.
ACTION POINT: Review each of the performance measures you use to manage your organization. Eliminate each of those measures that is not meaningful to the results of the organization.
Management: Tasks, Responsibilities, Practices
* Source: The Daily Drucker by Peter F. Drucker