4 ms·
> long term immeasurable value (e.g. tarnishing the company reputation) This isn't exactly "immeasuable." Balance sheets quite commonly have an entry for "good
by nonameiguess 5y ago
> long term immeasurable value (e.g. tarnishing the company reputation)
This isn't exactly "immeasuable." Balance sheets quite commonly have an entry for "goodwill" and brand/IP valuation is an art in itself. It's clearly difficult to measure, but it can be measured.
On the other hand, while, depending on how liquid the market is for ownership and debt shares in your company, it may be fairly straightforward to place a value on the entire company, with estimates of how to divvy that up getting less clear between individual line items on a balance sheet, attributing that value to specific individuals, roles, and actions is nearly impossible for all but direct salespeople.
This is where the notion of creating value for your customers gets a lot more nebulous. It is entirely possible to actually measure the monetary impact your product and even specific features of that product can make for a customer, and extrapolate that history to estimate the impact of similar products and features, but there is an actual measurement and statistical science to doing this, and almost no one involved in technical project management and certainly not engineers actually have any of the toolsets of accounting and economics to do this, so we mostly just wing it and make guesses based purely on intuition, so we can get back to our real jobs and do what we're actually good at, which is not measuring and estimating value.
And, of course, this gets a lot stupider when you get into government work and nonsense like EVMS, because your customer isn't a profit-making entity that has any monetary value in its operations at all, yet all of our tooling and thinking is based on the premise that value can be quantified via a common medium of exchange and ranked.
- mc32 5y ago>"It's clearly difficult to measure, but it can be measured." That is a very generous take. It can be estimated or guessed at via proxies, but something like that is not really measurable. It's like measuring the loss of a key employee leaving.
- kqr 5y agoBy those standards, nothing can be measured. Everything is measurable only with a degree of uncertainty. Some things have more uncertainty than others (compared to what the number would be used for) but we have created techniques to deal with that in practise too (hedging, optionality.) Maybe you have a personal threshold for a level of uncertainty below which things count as measurable and above which they don't, but you're imbuing the word "measure" with subjective characteristics at that part -- not to be confused with its objective meaning.
- nytgop77 5y agoFor me "measurement" implies known precision, and some straight-forwardness, simplicity and clear repeatability. Estimation is on the other hand uses measurements as input and has no clear cut path forward. (you must assume some model) "Chemistry is just applied physics" ("measurement is just estimating via proxy") might be technically correct, but distinction is still very real and usefull.
- kqr 5y agoAh, we get into the old philosophical "what is probability" question. I'd argue probability is subjective and estimation is mostly unambiguous, therefore the estimation uncertainty is mostly known, thus estimation is a form of measurement. I can absolutely see how, if you think probability is frequentist/objective or you think there's generally non-uncertain ambiguity in the estimation task, you would disagree.
- skybrian 5y agoThe “goodwill” item on a balance sheet is based on how much the company paid for acquisitions above their book value. Since companies get bought for many reasons, it doesn’t mean anything specific about intangible property. It might mean that management overpaid for the acquisition and haven’t written it off yet. The book value of a company isn’t supposed to match its intrinsic value. It only includes assets that have a clear price.