Metrics in Crisis: Rebalancing Profit, People, and Progress

I was reading about the predictions of Dr. Nouriel Roubini, an economist often referred to as “Dr. Doom,” who recently warned about the long-term impacts of the pandemic and other systemic shocks on the global economy. He emphasised that while there are signs of recovery in certain markets, the broader economic outlook remains uncertain. He projected that sustained growth may not stabilise until the later part of 2025 or even into 2026, depending on regional economic policies and geopolitical stability. His argument is coherent, and the trajectory he outlines seems plausible.

However, his analysis led me to reflect on what we are measuring and how we measure it. My Ph.D. research focused on identifying ways to measure how individuals value each other consciously and subconsciously and developing a corresponding metric. It was, without question, one of the most challenging undertakings of my life.

With the guidance of my supervisors, I realised that the problem could not be tackled solely through the lens of psychology or strategy. I had to integrate theories and concepts from multiple disciplines—including accounting, economics, social theory, customer service, and operations—to create a comprehensive framework. Completing my Ph.D. within three years was an achievement, but I soon realised that my work would only gain meaning if I expanded my thinking beyond management sciences. This required exploring language structures, neuroscience, and behavioural psychology. It took me an additional four years to validate and refine the framework.

The task was arduous. I learned that any meaningful metric is built upon assumptions. You rely on these assumptions until evidence compels you to rethink them. Moreover, human beings do not operate in silos. Understanding performance requires integrating insights from various fields.

I apologise if this sounds like a digression. My intent is to demonstrate that meaningful metrics are not conjured from thin air; they must be grounded in interdisciplinary understanding and remain open to continuous refinement. Now, let us apply this thinking to performance metrics in the present day.

The dot-com bubble burst because companies were overvalued based on superficial metrics such as website traffic (“eyeballs”) without a clear strategy for cash flow. Analysts applied aggressive multipliers to valuations, leading to inflated, unsustainable values. A study by HSBC indicated that some companies were overvalued by 40-50%.

Similarly, the 2008 financial crisis resulted from excessive debt, rampant speculation, and relaxed credit standards. The housing market bubble saw property values inflated by 40-50%, driven not by analysts this time but by estate agents. These valuations lacked rigorous validation, yet the world accepted them as reality. When emotions overshadowed rational assessment, we were all complicit. We know how that story ended.

Fast forward to 2024 and beyond, and we find ourselves grappling with different but equally complex challenges. Global economic growth remains uneven. China and India have cooled to around 4-5% annual growth, while Europe hovers between 1-2%. Persistent inflation, supply chain disruptions, and geopolitical uncertainties continue to cast shadows over the future. Equity markets have shown volatility, with corrections of 20-30% becoming increasingly common. The economic shock triggered by COVID-19 accelerated some of these downturns, but the underlying issue remains: overvalued markets driven more by sentiment than substance.

When we scrutinise these crises, a pattern emerges. Recessions tend to occur when inflated expectations collide with reality. We often rely on monetary metrics as proxies for progress, but these indicators are deeply influenced by sentiment, not just rational analysis.

Why do we panic when markets dip? Why can we not accept that fluctuations are part of a new reality and manage expectations accordingly? Why should stock market sentiment dictate how we measure progress? Boom-and-bust cycles may be inevitable, but our reaction to them need not be.

History reveals that our current valuation of progress is a fragile construct. I am not anti-progress, nor am I advocating socialism. I am simply questioning the validity of the metrics we use to define success. Logical positivism in research asserts that theories hold until proven false. Measured growth under this framework has repeatedly failed under scrutiny. Is it not time to rethink our approach?

For too long, we have let numbers reduce the complexity of progress. We label anything we cannot quantify as “intangible” or “soft,” sweeping it aside. Should we not begin to measure social progress and human wellbeing alongside organisational performance to understand economic resilience more holistically?

Consider this: human beings do not evolve by 1% annually. If we did, we would be entirely different individuals by the time we retire. Yet we expect companies and countries to achieve exponential growth. When rational targets clash with emotional realities, chaos ensues.

Where is the balance between rationality and emotion? The Japanese concept of “Kokoro” represents the unity of heart, mind, and spirit—a holistic approach. Should we not apply this to our metrics? We live in an interconnected world; isolated measurements no longer suffice.

An organisation exists to serve society. Why should financial gains alone determine success? Why can we not create societal impact metrics to assess how organisations benefit communities? ESG measures are gaining traction, but they remain nascent. Progress is slow.

We often refer to people as “assets,” yet when crises arise, reducing headcount is the first lever we pull to improve performance. Should we not measure how organisations support, nurture, and sustain their workforce? An organisation does not exist in isolation. It depends on suppliers, distributors, and consumers. Should we not have metrics that reflect how it treats all stakeholders in this value chain?

I may be criticised for my seemingly naive critique of capitalism. But life is about choices. We can either maintain the status quo or pursue a different path. The road will be bumpy. New measures will falter before they stabilise. Yet, we will eventually create metrics that endure—until the next evolution demands change.

Is it not time we seize this opportunity to redefine progress?