It’s not about figures, it’s about the reality.
As an economist-and-data-scientist-turned-CTO, I barely can get my morning coffee without being offered to make “data-oriented decisions” using “tailored real-time insights”. Most of the times, they offer you the tech business equivalent of the GDP calculation.
What’s GDP and what’s wrong with it
Gross Domestic Product (GDP) is the monetary measure of the market value of all goods produced during a 1-year time period. Its growth is its increase (or decrease) over time.
GDP growth is the single most commented figure in the news, period. “Economic growth” is the hit-or-miss objective of the president.
For you tl;dr enthusiasts, here is a top-of-my-head, quick summary of the three main criticisms towards GDP and growth :
- It is a measure of production, not destruction (ex. destruction of non-renewable environmental goods for a 1$ profit is a sound economical decision) ;
- It does not measure fairness and equality (ex. 1% more GDP distributed to one guy is ‘better’ than 1% less distributed to everybody ) ;
- What is production and what is not is arbitrary (ex. getting your morning coffee brewed by your significant other is not production, getting it brewed by a barrista is).
So why does everyone keep using it ?
A. Because all the cool kids are doing it (the UN human development index, and all others, are still work in progress, and everyone serious is talking about GDP) ;
B. Because it is an easy, one-size-fits-all, apolitical summary of very complex and highly political public sector topics (production, equality, distribution, tax rate, all summed up in one neat indicator).
A broader look at the issue
This is just one aspect of a fundamentally broken way of doing things.
Chasing a set of indicators that everybody follows, in business or in public office, won’t accomplish anything.
It hides the bigger picture. The only “positive” point is that it is reassuring, and nobody will ever criticizes you for following the rulebook.
Real life is hard, messy, and complicated. Sometimes good ideas and good strategies and good people don’t make it. And sometimes broken ideas with strange timing are hits. And out there, in the real world, nobody hands out medals for playing by the book.
Some time ago, I sat in countless public policy meetings comparing growth benchmarks, environmental policy, and global indexes. Usually these meetings had the words “Defining” or “Decision” in their title.
Recently, I’ve been sitting in countless meetings and webinars comparing churns with industry benchmarks, looking at userbase turnover and descriptive statistics. Usually these meetings have the “Groundbreaking”, “Tailor-made” and “Data-smart” words in their title.
Here is the summary.
There are good policies involving slow growth. There are bad policies involving slow growth.
But I have yet to see a government succeed without a solid, plain words written plan for the future, which came first to every single statistic in the world.
There are bad products with low churn, there are good products with low churn.
But I have yet to see a company truly succeed without a solid, plain words written plan for the future, which came first to every single statistic in the world.
It is very easy to put every single best practice into one hideous project, and write a plan to meet every single industry benchmark. It practically writes itself, and nobody will ever critizice you for doing it.
It is very hard to stick by an ambitious vision written in plain old english, and tailor a project and a set of indicators that are relevant to this vision. And the vision will be torn apart by various experts. Yet it is the only way I know how to accomplish something.
Strategy and vision should come first, and analytics should second and help those.