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The McNamara fallacy: Measurement is not understanding

mcnamarafallacy.com

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Re: The McNamara fallacy: Measurement is not understanding

#171

Post by sloan »

“There’s the old apocryphal story that in 1967, they went to the basement of the Pentagon, when the mainframe computers took up the whole basement, and they put on the old punch cards everything you could quantify. Numbers of ships, numbers of tanks, numbers of helicopters, artillery, machine gun, ammo—everything you could quantify,” says James Willbanks, the chair of military history at U.S. Army Command and General Staff College. “They put it in the hopper and said, ‘When will we win in Vietnam?’ They went away on Friday and the thing ground away all weekend. [They] came back on Monday and there was one card in the output tray. And it said, 'You won in 1965.’”

https://www.theatlantic.com/technology/archive/2017/10/the-c...

Re: The McNamara fallacy: Measurement is not understanding

#173

Post by aidenn0 »

scubbo wrote: post #39

Surprised not to see Goodhart's Law[0] referenced here - "When a measure becomes a target, it ceases to be a good measure". Not the same concept, but a related one (as is the Cobra Effect[1], of which the poppy-field burning is an example) [0] https://en.wikipedia.org/wiki/Goodhart's_law [1] https://en.wikipedia.org/wiki/Perverse_incentive#The_origina...

I also think that Goodhart's law is a stronger effect than the McNamara Fallacy for Afghanistan; when people are actively faking results, then that's not so much measuring the wrong things as just flat out failing at measuring things.

Re: The McNamara fallacy: Measurement is not understanding

#174

Post by gen220 »

ren_engineer wrote: post #129
jscode wrote: post #23

Quick story: I was the CFO for a company that sold to a private equity group (PEG). I took over as the CEO as the founders retired, leaving me to deal with the PEG. It quickly became apparent that the PEG managers looked at everything through the lens of an Excel spreadsheet. These guys were brilliant attorneys and analysts but lacked experience building businesses and managing teams. Ultimately, they couldn’t add mu…

this is basically the micro example behind the deindustrialization of the United States. Mitt Romney type corporate raider MBAs outsourcing everything to China for cost savings to maximize short term profit expand this over 50 years by 1000s of similar groups of people doing the same thing and you go from the "Arsenal of Democracy" to begging China for masks and ventilators

An oldie that may be an interesting read for those who have had similar thoughts: https://www.theatlantic.com/magazine/archive/1993/12/how-the...

Re: The McNamara fallacy: Measurement is not understanding

#175

Post by bb88 »

Aeolun wrote: post #100
bb88 wrote: post #86

Earlier quoted context omitted.

Cash is still King. The more cash on hand, the easier it is for the business to survive in an economic downturn, and the more dividends and stock buybacks can happen for the investors. Software engineers from a CFO perspective aren't any really different than plumbers or carpenters. It's just labor. Getting a cheaper rate on labor is far more beneficial to the company than say making sure it's employees are happy. If…

> Getting a cheaper rate on labor is far more beneficial to the company than say making sure it's employees are happy. Whoa, citation needed. I’m fairly certain yhis isn’t true unless you are optimizing for just the next month.

Companies exist for the stockholders, not the employees or the public at large.

Re: The McNamara fallacy: Measurement is not understanding

#176

Post by bb88 »

nickpeterson wrote: post #115
bb88 wrote: post #86

Earlier quoted context omitted.

Cash is still King. The more cash on hand, the easier it is for the business to survive in an economic downturn, and the more dividends and stock buybacks can happen for the investors. Software engineers from a CFO perspective aren't any really different than plumbers or carpenters. It's just labor. Getting a cheaper rate on labor is far more beneficial to the company than say making sure it's employees are happy. If…

This line of thinking is wrong though, because software developers are more like writers than plumbers. You can fire the writing staff at a sitcom and hire cheaper writers but good luck, it will probably fail.

If your primary output is software then maybe you're right. But in most companies software enables more efficient output usually in the form of products or services. A bank uses software, but it's profit is based upon banking... etc.

It's why most Fortune 500 companies run Java, so they can easily replace one person with another.

Re: The McNamara fallacy: Measurement is not understanding

#177

Post by bb88 »

andrei_says_ wrote: post #131
nickpeterson wrote: post #115

Earlier quoted context omitted.

This line of thinking is wrong though, because software developers are more like writers than plumbers. You can fire the writing staff at a sitcom and hire cheaper writers but good luck, it will probably fail.

The issue is that the bean counters count beans and not creativity. Can we think of a way to connect and individual’s creativity to money flow? As an engineer I am most productive when I solve a business need without writing code. How can I associate my contributions with measurable profit?

When you write an api, add "dollars_saved", for the amount of dollars your api is currently saving the company. CFO's love that quantitative shit.

Re: The McNamara fallacy: Measurement is not understanding

#178

Post by greiskul »

Andys wrote: post #164
greiskul wrote: post #162

Earlier quoted context omitted.

The thing I have noticed is when the anecdotes and the data disagree, the anecdotes are usually right. There's something wrong with the way you are measuring it. - Jeff Bezos You can think many things of Bezos, but he does know how to make a business make money. Data is important, but things that are hard to measure that you only learn as anectodes is also important.

Heh, I wonder if he would apply that to science as well?

Science advances in strange ways sometimes. Plate tectonics started basically with the anecdote of "south america really looks a lot like it fits into east Africa", but wasn't believed at first due to no hard data.

Anedoctes are not data, but when you have some with no data, instead of ignoring it you should take it as a signal to go search if there is data to support it. Great scientists and mathematicians usually have good intuition of things to research, not because they have data, but their mental models of the subject tell them that there should be interesting data there.

Re: The McNamara fallacy: Measurement is not understanding

#179

Post by bb88 »

pjmorris wrote: post #121
serverlessmom wrote: post #63

Earlier quoted context omitted.

I definitely agree with you. I would further argue that the "analyst mentality" has become so engrossed in the foundation of capitalism(and always has been, really) that we see companies across many industries closing down due to the "worker shortage". When in reality the CEO's of the companies complaining the loudest that "no one wants to work" have decided that paying living wages in a deeply competitive job market…

I've long joked that Excel will be the downfall of western civilization, but it's less funny every year.

You either like Paul Krugman or you hate him but there's no denying that excel bugs influenced economic policy.

https://www.nytimes.com/2013/04/19/opinion/krugman-the-excel...

Re: The McNamara fallacy: Measurement is not understanding

#180

Post by bb88 »

Groxx wrote: post #163
greiskul wrote: post #162

Earlier quoted context omitted.

The thing I have noticed is when the anecdotes and the data disagree, the anecdotes are usually right. There's something wrong with the way you are measuring it. - Jeff Bezos You can think many things of Bezos, but he does know how to make a business make money. Data is important, but things that are hard to measure that you only learn as anectodes is also important.

Amazon's sprinting decline into absurdly gamed reviews and scam copycat products really doesn't support that quote.

If they don't measure it, does it exist?

I'm not disagreeing here, but it could be that the fraud is a drop in the bucket of Amazon revenue. And just trying to get metrics on it, may cost more than what Amazon benefits from it.

I tonight bought a 3d printer hotend from the source company, because I couldn't be sure the product I order from Amazon would be genuine.

It's pretty bad when the products being sold on Amazon are labeled "Genuine assembled E3D V6 Hotend", when if Amazon gave a shit, it would only need to say "Assembled E3D V6 hotend."

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