Goodhart’s law states that when a measure becomes a target, it ceases to be a good measure.
When the Soviet Union factories were given targets for how many nails they needed to produce, they make small and useless nails.
When the hospitals in Britain were penalized for wait times longer than four hours. The hospitals asked their ambulances to take the long road to the hospital. Even though the roundabout path hurt patients.
When Uber took on an aggressive win-at-all-cost expansion strategy, HR covered up a sexual harassment case from a high performer. It blew up in their face and the CEO got fired.
There is nothing that focuses the mind like a single target. But when money is the end goal, we easily forget our health and family.
There is a solution. As pointed out by Andy Grove in High-Output Management, it’s important to have a target but it is equally important to track counter metrics for context.
For customer service, it could be the speed of tickets closed and counter that with customer satisfaction.
For engineering, it could the percentage of ticket closed and counter that with the importance/priority of the ticket.
For sales, it could sales revenue and counter that with the renewal revenue or returning customers.
Life is never about one thing or one purpose, at all cost. When it’s the case, it ceases to be a good measure. What’s your target and what’s your counter metrics?
