Goodhart's Law

The modern world is obsessed with measuring. This started for a good reason. It's important to have a handle on how effective it is what you are doing. If you want to reach a new audience with an ad campaign, and you don't look at the number of new subscribers it brings in, you are potentially wasting a lot of time and effort.

A well-chosen metric won't show you the whole picture, but if can give you a rough overview fast. For example, if you want to understand how well a class understood a topic they were taught, a test is a great idea. If everyone has trouble with one exercise in it, you would know that you need to revisit the concepts needed for that exercise. If, however, you decide to rate the pupils based on their result in the test, the dynamic changes. Suddenly, it's much more important to fake understanding than to actually learn something. Instead of learning, the exam starts to incentive cramming, cheating, or other ways to game the system. As soon as exam scores are used to rate pupil's learning progress, the score becomes useless.

This problem is called Goodhart's law, and it's one of my favourite laws of all time. It states that whenever a measure is picked as a target, people start to game it and it ceases to be a good measure. Using this law gives an insight into all kinds of problems. If doctors are rated based on the number of lives they save, they are incentivised to refuse gravely ill patients. If cops are rated based on the number of arrests they make, they are incentivized to make frivolous arrests. And if public companies are solely rated by the amount of money they make for their shareholders, why are you surprised when capitalism is going haywire?

Now, you might say that this isn't a problem, because most people want to be helpful and make the world a better place. While I like this attitude, I also think it's wrong. Let's compare two doctors from the example above. If one of them only cares about his rating, he will only take patients he can cure easily. Another doctor, who cares more about helping people, will also take seriously ill patients. And even though the second doctor does a better job of helping people, he is rated worse than the first one. In other words, in a system that is governed by a single metric doing the right thing is punished.

So, dear employers that track their employee's time on slack, or their office hours. These metrics are easy to game and not a measure of productivity. Please, just stop tracking them.