Management by Statistics is another example of a pattern I have noticed in Hubbard's works. Its an oversimplification, which is then taken to its logical extreme.
In theory, it sounds like it should work. You slowly get better and better at your job, figure out what works and what doesn't and if this is true, it should result in a measurable change in your output.
Management likes statistics because they are very hard to argue against (your stats are down, explain yourself), and that they can be applied by lazy managers without requiring a full indepth understanding of what is happening. It also serves as a tool to push people slightly out of their comfort zone, and if done correctly, this can be a very powerful tool. However there is the law of unintended consequences, and a few issues that seem to pop up in practice.
A core concept is that correlation does not imply causation. When it rains, you will see lots of people start to carry umbrellas, but just because you see alot of people with umbrellas doesn't mean its raining.
Often underlying goal is often not directly measurable. Goals are such as educated students, resolved emotional trauma, the personal needs of your customers met. As a result, we don't measure the goal directly, but rather invent a substitute, the choices is fairly arbitrary but has to be something that is correlated with the goal but also easily measurable. Examples of this are student points, auditing hours, money. The trap is not the statistic itself, which is just a mathematical way of observing yourself, but rather the internal response to the statistic once it has been observed. If no action was taken by management in regards to statistics, then they would just be a casual tool for self-observation, and a tool for flagging up areas of potentual outpoints (carrying an umbrella doesn't mean its raining).
We have the concept of a feedback loop, that an action results in consequences and those consequences affect the next action and so on. In Scientology if a statistic is higher than the previous week, the response is a pat on the back, if the statistic is lower than the previous week, it becomes an ethics matter. This strong feedback has the side effect of distracting attention away from the underlying goals, and directing it very firmly onto the measured statistics. The two are not exactly the same, and by heavily optimizing for the statistic, you can actually harm the underlying goal.
For example, a student is having trouble understanding a concept, and a good long chat on the history, logic and fundamentals of the concept will probably result in the most education over the shortest time frame. But a good long chat is not a measurable item, thus this action is downstat (the ethics officer doesn't want to hear your excuses), so far better to have him spend the day reading references and clearing words, you will have lots of student points that way.
In the big wide world outside of Scientology (inside Scientology too), the big statistic is money. Management by statistic of money, has resulted in all the wonders of the capitalistic world you see around you. but it is also responsible all the madness you see around you too. The recent credit crunch has also shown that just because you are upstat doesn't mean its sustainable, or that you haven't started investing in bubble economics.
The bible talked about this, Timothy 6:10: "For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows."
Another issue, is one which Hubbard wrote about in his policy letter "The Why Is God". He takes the assumption that we are all fully self-determined in our own reality, and it reinforces his "no excuses" style of management. The truth is that this is not the case. Rather than being a self-contained ball of pure manifestation, we must learn that we are also part of a much larger network of other individuals, other energy flows and other self-contained balls of manifestation. When we push too strongly in one area, it can affect the others interact with us, and the energy flows around us. To be part of a system, we need to enable "reach and withdraw", to have the odd week where we are downstat, to leave others alone and wait for them to come to us, and most important of all to realise that ultimately this is all a game, and its much more fun to play if don't have to take it all too seriously all the time.