What You Measure Can Encourage The Wrong Behavior and Results

Metrics are misleading.

When a metric becomes the primary focus of a job, it becomes less effective. A “measurement can replace thinking. It can become the thing,” writes Ozan Varol. It becomes something you didn’t anticipate; the ruler of decision-making.

People endlessly chase their tails to achieve a metric.

There are two crucial economic principles to blame:

Goodhart’s Law: “When a measure becomes a target, it ceases to be a good measure.” When we’re too focused on what to measure, we lose the common sense of what’s happening around us.

Campbell’s Law: “The more a metric is used, the more likely it is to ‘corrupt the process it is intended to monitor.’”

The goal of any measurement is to motivate and align.

When performance is measured with a specific metric, people optimize everything to achieve the metric, regardless of other consequences.

Zachary Crocket in The Hustle gives a few great examples:

It can “encourage ‘gaming’ the system (e.g., bagging free groceries), incentivize the wrong aspects of work (e.g., writing trivial code), erode morale (e.g., writing clickbait), or harm customers (e.g., turning away critical surgery patients).”

Instead of being complacent with your metrics, learn to evaluate them regularly. Ask yourself:

• “What is this metric for, and what’s its purpose?”
• Do we measure the right things to achieve the necessary outcome?

When your metric no longer serves its purpose, eliminate or replace it. Install a new metric that’s more effective at motivating and aligning your team.

Allow room for “change, flexibility, innovation, and failure” and rely on human discretion.

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