Comment by hliyan
3 hours ago
The problem with fast feedback loops is that they filter out long term signals. The problem with data driven decision making is that data is numeric, and the act of counting is necessarily an act of approximation, by which we erase the difference between objects or events in order to bucket them into a category so that they can be counted. So the kind of dashboards that modern managers demand, offer nothing but the most obvious, short term "insights", that you might as well eliminate the man in the middle and feed the data directly into a set of simple decision rules.
> The problem with data driven decision making is that data is numeric, and the act of counting is necessarily an act of approximation, by which we erase the difference between objects or events in order to bucket them into a category so that they can be counted.
Yes, this is exactly right. To put it another way: When we quantify something, we abstract away everything about that thing that is not quantifiable. So our thinking is only about a tiny aspect of that thing's existence.
> we abstract away everything about that thing that is not quantifiable
It's worse, we simply abstract away everything else, including innumerable things that are quantifiable.
Everyone quotes Goodhart's law, but I think the McNamara fallacy is even more important nowadays. It should be read aloud to every CEO every day.
https://en.wikipedia.org/wiki/McNamara_fallacy
TLDR: Making a decision based on only qualitative data, and therefore ignoring qualitative information and observations, can lead to bad outcomes. Not everything that is important can be easily measured.
These bad outcomes aren't coming. Maybe we as customers don't like it but it doesn't mean the companies are suffering for it.
For example, McDonald's reported a full-year 2025 net income (profit) of $8.563 billion, an increase from the $8.223 billion reported in 2024.
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> Making a decision based on only qualitative data
I suppose you meant quantitative and it's just a typo
I'm quite certain every McDonald's franchise knows how to hire high schoolers and serve up a bunch of smashburgers to instantly become the busiest franchise in the state.
The problem isn't an ability to understand long term signals. The problem is that if a franchisee tried to generate that signal corporate would filter them right out of their franchise.
Right, but those short term insights can deliver short term value, often lots of it. That value can then be redirected into an index fund and generate real long term returns. There is no financial incentive for QSR execs to look past the next fiscal year, or even quarter when liquidating customer loyalty is so lucrative.