Stacy Barr is a performance measurement specialist. She lists in a blog some answers from her readers.
Here is a list.
They are not specific to investment management, it is a matter of applying these concepts to how you measure your success when you invest.
- Without measuring performance, we’re doing no better than guessing. Which means we’re giving up any control over performance.
- Without measuring performance, we can’t know if our actions are working or not; if our expenditure of time and money is making the difference we want, no difference at all, or making things worse.
- Without measuring performance, we don’t do better than mediocre. Even if our organisation appears to be performing well, that’s not guaranteed to continue. And pursuing excellence is out of the question.
- Without measuring performance, we can’t anticipate and prevent or mitigate problems. Instead, we spend an inordinate amount of time and effort fighting fires and clean up messes.
- Without measuring performance, we can’t agree on what success looks like. Weasel words lead us to our own individual interpretations of the results that matter, and we end up pulling in different directions.
- Without measuring performance, we can’t objectively prioritise. Instead, where we spend time and money will be decided by a popularity contest or the squeakiest wheel.
- Without measuring performance, we suffer in uncertainty and lack of self-efficacy. Our decisions will be sabotaged by anecdotal evidence, like opinions, hearsay, and biased data.
- Without measuring performance, any attempt at using data will be trivial. We won’t have the skill to measure, so will choose the wrong data, misinterpret it and misuse it.
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