Goodhart’s Law

Day 209 / 365

Imagine you are the manager of a plant that produces nails. You want some way to measure the productivity of the workers and to reward people who are more productive. So you decide to use the number of nails produced a day as the measure. You come back the next month and see that the number has indeed increased, but your happiness is short-lived when you see that your workers had actually produced smaller nails, just to bring the number of nails higher.

You conclude that it's not the number of nails but the total weight of nails produced that should be the measure. You tell this to your workers, and a few days later you are treated with the sight of huge 5-tonne nails!

The story is exaggerated but I hope you get the point. Many people think that you have to measure things in order to manage them. But in practice, if all you are worried about is a number, that number will eventually betray you. This is the idea behind Goodhart's law, which is stated as follows

When a measure becomes a target, it ceases to be a good measure.

This law is pretty easy to understand, but still a nightmare for managers. How do you measure your employee's performance? Some might go with the number of hours spent in the office. But we would just waste our time trying to get more and more hours in. A few people in my industry suggest going by the lines of code written in a day. But then people would just right shitty codes trying to get the number of lines up. The bottom line is if you just focus on some number, people would forget the bigger picture and work at just getting that number up.

This post is part of my 365 Day Project for 2019. Read about it here

Yesterday’s blog — Dance Marathons