What Doesn't Get Estimated Gets Ignored
Today, I want to do a quick double-click on something that came up in the newsletter yesterday
but which I think bears repeating, more as the main topic.
It's this:
As humans, we overemphasize the impact of things we can measure
And underestimate the impact of things that are harder to estimate
Even if their impact is actually obviously huge.
Call it a companion phenomenon to the saying,
"What gets measured gets managed."
Instead, it's,
"What doesn't get estimated gets ignored."
Examples:
Which sounds scarier?:
If I told you your startup would run out of cash sometime later this year vs in 3 months?
How often would you check the weather?:
If I told you the weather mattered a lot to your business vs. I told you sunny days would increase store traffic by 50%?
How much would care about employee engagement?:
If I told you that employee engagement really matters vs. I told you losing it can destroy 23% of your annual profits?
Here's the thing:
What I've learned from my background, both as a financial modeler and a management consultant is this:
You can estimate ANYTHING.
You just find some reasonable benchmarks and deduce what's likely the case given other known factors.
It won't always be 100% accurate
But it will tell you what's in the field of reasonability.
AND
It takes whatever you're deciding out of the abstract hypothetical
Of what Yeaaaa... could maybe be a threat... maybe someday... but you're not really sure....
And brings it into stark reality
Of what is likely to happen
So you can plan for it
And win.
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