A recent op-ed in the New York Times describes the use (or misuse), of the GDP as the primary, and often sole, measure of how well a country is doing.  As Eric Zensey describes it, the GDP is supposedly a measure of national wealth, a proxy for how well-off it is.  The more you make, the better off you are.  However, Zency argues that GDP is fundamentally flawed.  It fails to incorporate the value of resources already held, particularly natural resources, which are not easily monetized.  How much is clean air worth?  Where does happiness fit?  Where does life expectancy fit?  Is our economy better off if we have to constantly "produce" repairs for it?

GDP is not a measure of how well off we are, but merely a measure, and a flawed one at that, of economic activity.  However, when we destroy something of real value which isn't part of the calculus, such as a wetland which protects a city from flooding, GDP is unaffected.  And if we destroyed it by building something, say a levee which protects the city less than the wetlands did, GDP actually goes up though our security has gone down.  The consequence of this failure to account for the full costs of our activities makes GDP a dangerous measure in Zencey's estimation.  GDP is not a a measure of the outcome we seek, but rather the activity which, in part, produces that outcome; It is a measure of income, but not of net worth.  At the end of the day, we should focus on and manage to the latter.

However, because of its ubiquity and the lack of similarly popular metrics which capture other components of our nation's health, GDP is all to often treated as if it were the goal itself and becomes the primary consideration in legislative efforts.  But to what end?  Will that activity truly drive the impact we are trying to create, increasing national wealth?  Have we even defined, as a nation, what our ultimate impact is?

As you craft metrics, indicators of progress towards your outcomes (outcomes which in combination result in your desired impact), it is important to consider the consequences of managing to those indicators.  Surely, no indicator is perfect.  It is not feasible to perfectly model reality with numbers.  However, consider the balance the indicators you track.  Do they capture all of the things you value most?  If you achieve those outcomes, as indicated by the metrics you've chosen, will you produce your impact?  What might be overlooked if you manage your organization with the sole intent of driving that metric -- be it GDP, stock price, sales, or anything else? 

A healthy set of metrics includes not just those items which can be easily measured in dollars or heads.  Be sure you are measuring all of the intermediate outcomes which lead to your impact.  Monitoring activity is important, but just a component of the overall picture.  Usually, sustaining or improving the quality environment, be it nature itself or your organizational culture and morale, is a key part of the equation and should not be overlooked.