How to Measure Anything Workbook Finding the Value of Intangibles in Business

This companion workbook to the new edition of the insightful and eloquent How to Measure Anything walks readers through sample problems and exercises in which they can master and apply the methods discussed in the book.

The book explains practical methods for measuring a variety of intangibles, including approaches to measuring customer satisfaction, organizational flexibility, technology risk, technology ROI, and other problems in business, government, and not-for-profits.

• Companion to the revision of the bestselling How to Measure Anything
• Provides chapter-by-chapter exercises
• Written by industry leader Douglas Hubbard

Written by recognized expert Douglas Hubbard—creator of Applied Information Economics—How to Measure Anything Workbook illustrates how the author has used his approach across various industries and how any problem, no matter how difficult, ill defined, or uncertain can lend itself to measurement using proven methods.

DOUGLAS W. HUBBARD is the inventor of Applied Information Economics (AIE). He is an internationally recognized expert in the field of decision analysis and challenging measurements and is a popular speaker at numerous conferences. AIE method has been applied to dozens of large Fortune 500 IT investments, military logistics, venture capital, aerospace, and environmental issues. Doug is the author of How to Measure Anything: Finding the Value of “Intangibles” in Business (Wiley).

Preface ix

About the Author xi

Part I Questions 1

Chapter 1 The Challenge of Intangibles 3

Learning Objectives 3

Chapter Overview 3

Questions 4

Chapter 2 An Intuitive Measurement Habit: Eratosthenes, Enrico, and Emily 9

Learning Objectives 9

Chapter Overview 9

Questions 10

Chapter 3 The Illusion of Intangibles: Why Immeasurables Aren’t 15

Learning Objectives 15

Chapter Overview 15

Questions 16

Chapter 4 Clarifying the Measurement Problem 23

Learning Objectives 23

Chapter Overview 23

Questions 24

Chapter 5 Calibrated Estimates: How Much Do You Know Now? 31

Learning Objectives 31

Chapter Overview 31

Questions 32

Chapter 6 Quantifying Risk through Modeling 39

Learning Objectives 39

Chapter Overview 39

Questions 40

Chapter 7 Quantifying the Value of Information 47

Learning Objectives 47

Chapter Overview 47

Questions 48

Chapter 8 The Transition: From What to Measure to How to Measure 55

Learning Objectives 55

Chapter Overview 55

Questions 56

Chapter 9 Sampling Reality: How Observing Some Things Tells Us about All Things 61

Learning Objectives 61

Chapter Overview 61

Questions 62

Chapter 10 Bayes: Adding to What You Know Now 69

Learning Objectives 69

Chapter Overview 69

Questions 70

Chapter 11 Preference and Attitudes: The Softer Side of Measurement 77

Learning Objectives 77

Chapter Overview 77

Questions 78

Chapter 12 The Ultimate Measurement Instrument: Human Judges 87

Learning Objectives 87

Chapter Overview 87

Questions 88

Chapter 13 New Measurement Instruments for Management 93

Learning Objectives 93

Chapter Overview 93

Questions 94

Chapter 14 A Universal Measurement Method: Applied Information Economics 99

Learning Objectives 99

Chapter Overview 99

Questions 100

Part II Answers 105

Chapter 1 The Challenge of Intangibles 107

Chapter 2 An Intuitive Measurement Habit: Eratosthenes, Enrico, and Emily 109

Chapter 3 The Illusion of Intangibles: Why Immeasurables Aren’t 111

Chapter 4 Clarifying the Measurement Problem 115

Chapter 5 Calibrated Estimates: How Much Do You Know Now? 117

Chapter 6 Quantifying Risk through Modeling 119

Chapter 7 Quantifying the Value of Information 125

Chapter 8 The Transition: From What to Measure to How to Measure 129

Chapter 9 Sampling Reality: How Observing Some Things Tells Us about All Things 131

Chapter 10 Bayes: Adding to What You Know Now 135

Chapter 11 Preference and Attitudes: The Softer Side of Measurement 137

Chapter 12 The Ultimate Measurement Instrument: Human Judges 139

Chapter 13 New Measurement Instruments for Management 141

Chapter 14 A Universal Measurement Method: Applied Information Economics 143

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