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Measuring everything that matters (with Doug Hubbard)
Clearer Thinking with Spencer Greenberg
High Value Measurements and Uncertainty in Decision Theory
In decision theory, sensitivity analysis and information value calculation are compared. While sensitivity analysis identifies the sensitivity of variables, it does not assign monetary value to each variable. Instead, information value calculation in decision theory provides the monetary value of variables, revealing that organizations often measure the wrong aspects, such as focusing more on measuring costs in IT projects rather than benefits which are more uncertain. This measurement inversion leads to overlooking crucial variables like the chance of project cancellation and technology adoption rate, which greatly impact the project's success but are often not included in business cases. Failure to measure these high-value variables is a significant risk in decision-making.
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