Share:

Goodhart’s Law states that when a measure becomes a target, it ceases to be a good measure. Is that really true?

When a measure becomes a target, it ceases to be a good measure. — Goodhart’s Law

While this expression originated in the context of economic theory, it has been generalised, appropriately, to other contexts like performance management. We find it very true in performance measurement, that when someone focuses on hitting a target value or a quota, they will do whatever it takes to hit the number.

Dysfunctional behaviour and gaming stories are prolific, and every organisation has their own. And doing whatever it takes to hit a target or meet a quota ends up producing the exact opposite result we wanted from choosing the measure in the first place.

Should we take Goodhart’s Law as advice to avoid targets?

Targets are not the problem.

The understanding of measurement’s purpose, not targets specifically, is the problem. If we believe that measurement’s purpose is to make people accountable, then targets will become expectations that drive unhealthy behaviour.

But if we believe that measurement’s purpose is to continually learn and improve, then targets become intentions for improvement. (More here on targets as expectations versus intentions.)

In my experience, it’s more true to say this:

When targets are set to create accountability, it feels like a blame game and people will do whatever is easiest to hit those target numbers, even at the expense of overall performance. But when targets are used by teams to inspire learning and improvement, the whole system can improve.

Targets are not the reason why measures cease to be good. The reason that measures cease to be good is when people are expected to hit the targets, rather than reach toward them.
[tweet this]