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    « Is HR Tech now mainstream? | Main | PODCAST: #HRHappyHour 294 - Labor Day Special: Talking about Work »
    Tuesday
    Sep052017

    Learn a new word: Goodhart's Law

    Happy 'First-day-of-the-rest-of-the-year'. I suppose every day is the first day of the rest of the year, but for some reason on the Tuesday following the long Labor Day weekend that feeling is much more acute.

    Quick shot for your cram five days of work into four week. Another installment of your favorite series here on the blog - Learn a new word, where I share a word, term, phrase, or concept that I had not been familiar with previously, and for some reason seemed interesting/important/cool enough to share.

    So here goes - and this one is especially for the 'You can't manage what you can't measure' types out there.

    Our submission - Goodhart's Law

    (from our pals at Wikipedia)

    Goodhart's law is an adage named after economist Charles Goodhart, which has been phrased by Mary Strathern as: "When a measure becomes a target, it ceases to be a good measure." This follows from individuals trying to anticipate the effect of a policy and then taking actions which alter its outcome.

    Actually Goodhart himself stated the 'law' just a little bit differently, theorizing that "When a measure becomes a metric, it ceases to be a good measure.”

    Either way, the key point by Goodhart is still sound (and pretty obvious, even if you have never heard of our friend Goodhart).

    Make a measurement - say time to fill open jobs, percent of new hires who stay longer than 6 months, or even number of new patents filed by the R&D department - doesn't matter, the sole or even a primary metric of success and evaluation and things tend to get a little strange.

    The effected people pretty quickly learn how to manage/game the measurement, they start thinking, maybe too much, about how to drive that specific measurement in a manner that is positive for them, and they stop thinking so much about other, perhaps more cross-functional or strategic measurements.

    And even worse, too many managers or leaders focusing too much on measurements can sometimes be an excuse for not exercising good judgement, a method that corporate bureaucrats use for CYA and holding on to territory, and an imperfect way to try and describe people and relationships in a numerical manner.

    'You can't manage what you can't measure' is a fun thing to say. And sort of easy to agree with. But like Drucker's other widely quoted maxim, 'Culture eats strategy for breakfast' it definitely deserves more and closer scrutiny than it is typically given.

    We manage the unmeasurable all the time. And reducing everything to something we can measure, to a number, is probably the fast path to inflexibility, failure to adapt, and a workforce conditioned to respond and behave to the movements of numbers on a spreadsheet.

    Have a great week!

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    Reader Comments (2)

    Great post, happy you're spreading the good[hart] word about how metrics have a downside. I'm a big fan of Goodhart's law myself, having published a pair of [very extensive / meandering] posts on Ribbonfarm about the dynamics that lead to Goodhart's law applying (not always!); https://www.ribbonfarm.com/2016/06/09/goodharts-law-and-why-measurement-is-hard/ and about why unclear goals is usually a contributing factor to why metrics get misused; https://www.ribbonfarm.com/2016/09/29/soft-bias-of-underspecified-goals/

    Given all of that, a slight correction; Goodhart himself didn't say "when a measure becomes a metric, it ceases to be a good measure.” In fact, his original idea was much more specific to controlling economic variables using crude aggregate measures. The most general statement he himself made, originally, was: “any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes.”

    September 7, 2017 | Unregistered CommenterDavid Manheim

    Hey!

    Thanks for your insight! It has been very helpful for me to read this and learn something new. Thanks for the share again! Hope you have a good day. Get assistance with university assignments here

    Thanks

    September 14, 2017 | Unregistered CommenterFlora

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