The McNamara Fallacy

Robert S. McNamara was the United States Secretary of Defense from 1961 to 1968. He was one of the "Whiz Kids" hired by Henry Ford II to install in the Ford Motor Company the then-modern principles of planning and management control. Central to this effort was a measurement and metrics orientation, which McNamara later applied to managing the Department of Defense, and particularly, the U.S. tactics and strategy for the Vietnam War.

The McNamara Fallacy is the idea (discredited) that one can manage the missions of complex organizations by deriving guidance solely from numeric measurements of inputs and outputs. If these "metrics" are correctly chosen, so says the fallacy, they constitute a model of the system under control. To make appropriate decisions, one need only examine these metrics. [Baskin 2014]

According to the Fallacy, which is also known as the quantitative fallacy or managerialism [Muller 2019], attributes of operations and resources that cannot be measured objectively, and cannot therefore be represented as numeric data, can be safely ignored. They can be ignored because they cannot be proven. That's the essence of the McNamara Fallacy. The weakness of the approach isn't the use of metrics; rather, it is the ignoring of non-quantifiable factors.

Management-by-metrics fails not because metrics are unworkable. It fails because the effects of non-quantifiable factors can be as important as — or more important than — the effects of the quantifiable factors. In the case of the Vietnam War, for example, management-by-metrics emphasized attention to deaths of enemy combatants. That did not account for the differences in levels of commitment of the populations of the nations involved. Nor did it account for the effects on data quality due to the way the metrics were used.

Implications for organizational management

If your task The McNamara Fallacy is the idea (discredited)
that one can manage the missions of complex
organizations by deriving guidance solely from
numeric measurements of inputs and outputs is to manage the missions of a complex organization, the McNamara Fallacy offers a seductively safe harbor. It reduces the management problem to one of creating a metrics-based "model" of the missions. Then, having collected the data the metrics specify, decision-making is straightforward. All that's required is choosing interventions that drive the metrics to the desired goal values. If the problem is too complex for intuition, numeric simulations can test the results of proposed approaches, enabling a rational choice from among available options.

Belief in the McNamara Fallacy has a tight grip on many a management team even today. There's just one problem. It doesn't work. To understand one reason why it fails, consider the parable of the drunk and the streetlight.

The Streetlight Effect

There is an old joke that goes something like this:

One night after midnight, a policeman sees a drunk under a streetlight on his hands and knees searching the ground. He asks the drunk what he has lost. The drunk says he lost his keys, so they both look under the streetlight for a bit. Then the policeman asks the drunk if he is sure he lost the keys here. The drunk replies, "No, I think I lost them over there under those trees." The policeman asks why he is searching here, and the drunk replies, "The light is better over here."

This parable has led to identification of the Streetlight Effect, which has important lessons for problem solving. [Freedman 2010] In problem solving, the Streetlight Effect can be expressed as the tendency to favor searching for problem solutions in areas where we feel we have mastery, rather than in areas where we're more likely to find solutions.

The Streetlight Effect also has lessons for managers in organizations. It explains the tendency to manage according to metrics for which data is relatively easy to collect reliably even if those metrics might be less relevant to the process we're controlling. The Streetlight Effect can also cause us to be averse to basing management action on judgment or other system attributes that cannot be quantified. It might then suggest a reason why the McNamara Fallacy still has adherents, given that the Fallacy specifically claims that we can base decisions solely on metrics, and ignore non-quantifiable factors like judgment and intuition.

Last words

When next you notice a group basing an important decision solely on metrics, ask yourself if the decision feels right. If you feel a slight pang of doubt, consider asking others a question like, "Does anyone have a slightly queasy feeling about this?"  Top    Next Issue

Are your projects always (or almost always) late and over budget? Are your project teams plagued by turnover, burnout, and high defect rates? Turn your culture around. Read 52 Tips for Leaders of Project-Oriented Organizations, filled with tips and techniques for organizational leaders. Order Now!

Footnotes

Your comments are welcome

About Point Lookout

Thank you for reading this article. I hope you enjoyed it and found it useful, and that you'll consider recommending it to a friend.

This article in its entirety was written by a human being. No machine intelligence was involved in any way.

Point Lookout is a free weekly email newsletter. Browse the archive of past issues. Subscribe for free.

Support Point Lookout by joining the Friends of Point Lookout, as an individual or as an organization.

Do you face a complex interpersonal situation? Send it in, anonymously if you like, and I'll give you my two cents.

Related articles

More articles on Personal, Team, and Organizational Effectiveness:

Organizational Firefighting

Sometimes companies or projects get into trouble, and "fires" erupt one after another. When this happens, we say we're in "firefighting" mode. But it's more than a metaphor — we have a lot to learn from wildland firefighters.

Deciding to Change: Choosing

When organizations decide to change what they do, the change sometimes requires that they change how they make decisions, too. That part of the change is sometimes overlooked, in part, because it affects most the people who make decisions. What can we do about this?

False Summits: I

Mountaineers often experience "false summits," when just as they thought they were nearing the summit, it turns out that there is much more climbing to do. So it is in project work.

Disjoint Awareness

In collaborations, awareness of how our own work might interfere with the work of others is essential. Unless our awareness of others' work — and their awareness of ours — matches reality, the collaboration's objective is at risk.

Layoff Warning Signs: II

Layoffs often signal their arrival well in advance, if you know what to watch for. Some of the indicators are subtle and easily confused with normal operations. Here are three more indicators that layoffs might be secretly underway.

See also Personal, Team, and Organizational Effectiveness and Personal, Team, and Organizational Effectiveness for more related articles.

Forthcoming issues of Point Lookout

Coming May 21: Mismanaging Project Managers: Mechanics

Most organizations hold project managers accountable for project performance. But they don?t grant those project managers control of needed resources. Nor do they hold Project Sponsors or other Senior Managers accountable for the consequences of their actions when they interfere with project work. Here?s a catalog of behaviors worth looking at. Available here and by RSS on May 21.

And on May 28: Mismanaging Project Managers: Leadership

Most organizations hold project managers accountable for project performance. But they don't hold Project Sponsors or other Senior Managers accountable for the consequences of their actions when they interfere with the project manager's ability to lead the project team. Available here and by RSS on May 28.

Coaching services

I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenubcqSvusyBsQaEDwner@ChacfhuriyFKgDguTpuYoCanyon.com or (650) 787-6475, or toll-free in the continental US at (866) 378-5470.

Get the ebook!

Past issues of Point Lookout are available in six ebooks:

• Get 2001-2 in Geese Don't Land on Twigs (PDF, )
• Get 2003-4 in Why Dogs Wag (PDF, )
• Get 2005-6 in Loopy Things We Do (PDF, )
• Get 2007-8 in Things We Believe That Maybe Aren't So True (PDF, )
• Get 2009-10 in The Questions Not Asked (PDF, )
• Get all of the first twelve years (2001-2012) in The Collected Issues of Point Lookout (PDF, )

Are you a writer, editor or publisher on deadline? Are you looking for an article that will get people talking and get compliments flying your way? You can have 500-1000 words in your inbox in one hour. License any article from this Web site. More info