Suppose I were to ask you to count the apples in your house and tell me the result. Seems like a simple enough proposition, but as soon as you start the endeavor, questions start to pop up. Should you include the rotten apple you just threw in the trash? How about the apple your kid took a bite from and left on the table? Should you include the equivalent number of apples embedded in the jar of applesauce? Or in the apple pie you baked last night? How about the fake apples in that decorative bowl of fruit on your living room coffee table? It turns out that the word "apple" is not nearly specific enough. The mathematical sets of 'apples' and 'not apples' have a fair amount of overlap, and whether something is an apple or not an apple depends on what I am trying to do with the information.
The same would be true if the boss were to ask you to count the number of cars in the company parking lot – does he want you to include small pick-ups, full size pick-ups, minivans, full size vans, SUV's? 'Cars' is not clear enough. Or if you were to count the number of chairs you own – where does that tree stump you sit on in the back yard while you watch your kids on the swing set fit in? If someone were to say to you, 'I have 10 apples, nine chairs and two cars' you would need quite a bit of clarification to know exactly what that means.
Math spills over into logic, and logic into philosophy. In our western thinking we want to believe in the absolute truth of such propositions as 'B is greater than A, and C is greater than B, therefore it is absolutely true that C is greater than A'. Eastern philosophy is much more comfortable with the notion that there are lots of things that are apples and not apples at the same time, chairs or cars, and not chairs or cars at the same time, that B is greater than A and C is greater than B sometimes, and not so much at other times, and there may even be times when A is greater than both B and C. So C may or may not be greater than A at any given moment and in any given circumstance.
These are some the lessons I took from a book I read over fifteen years ago called Fuzzy Thinking by a guy named Bart Kosko. It gets right to the heart of Toyota's ease in developing kanbans and vaguely defined organizations and roles at the time western businesses were pouring money into ever more complicated ERP systems and forecasting models, and American academics were laboring long into the night to develop the perfect Economic Order Quantity formula. Our solution to the apples, cars and chairs dilemma would be to create a table of all known variations of apples and assign a value to each based on weighted averages of vast statistical samples. Or we would forge ahead based on a lengthy set of assumptions. We insist on believing that the number of apples can be quantified, and that with enough math and logic, and with a big enough computer, we can eventually succeed in defining our fuzzy, messy world in crisp mathematical terms.
Yesterday fellow traveler on the lean path Kathleen Fasanella commented, "… I do something similar except I also attempt to quantify the intangibles of reliability, safety and increased quality of work accomplishment (ease) into the ROI equation.", asking me to expand on my rather flippant rejection of such efforts as "silly".
Here you have it, Kathleen – at least one man's view of it. The problem with math – ROI formulas, ERP systems, product costs, metrics and dashboards - is that it breaks down as soon as it is taken out of the theoretical realm and used to define reality. Even if you have no variations of apples in your home – just two red apples you brought home from the store yesterday that sit untouched in your kitchen - you ignore the fact that one is slightly larger than the other, one is juicer, and one tastes better than the other when you hang the number '2' on them and attempt to compare them to my two apples.
We would like to believe that we can some day find the holy grail of math that will make decision making easy and without risk. It cannot be done. Whether to buy the machine or not, what price to set, whether to make or buy, whether to give someone a raise or to lay them off can never be boiled down to mathematical terms. In the end, the math has to be kept in perspective and recognized to be, at best, directionally helpful but absolutely wrong. The decision should be based one third or less on the numbers. The factors that have to drive the decision are wisdom, judgment and experience; values, ethics and the long term strategy of the company. To assign a mathematical value on something that really cannot be quantified satisfies our cultural conviction that there is a clear and logical order to the world and our corner of it, but we are only kidding ourselves. Best to acknowledge that risky decisions must be made, and good decisions can only come from smart people within a sound culture driven by a clear vision.
Keep in mind the Einstein mantra – "Not everything that can be counted counts; and not everything that counts can be counted." And this from a guy who could dance mathematical circles around just about all of us. There is a lot that counts in that investment decision that cannot be counted.