Goodhart’s Law

I’m way behind on translating some of Cherry’s best gems posted on Facebook, but here’s one I felt compelled to share:

Goodhart’s Law: When a measurement becomes a goal 🎯, it immediately is no longer a good measurement.

– When you measure people by the number of nails made, you will receive thousands of tiny nails.
– When you measure people by the weight of the nails, you get a few heavy giant nails.
– When you measure people by sales, you’ll have the sales you want regardless of whether those sales bring long-term, sustainable benefits to the organization.
– When you measure people by profits, your people will make profits at all costs, even if it ruins the reputation of the organization.
I once told the leaders of a huge organization: If the system doesn’t improve, if you still manage as it is but want bigger numbers AND if they make those numbers real, you should be more worried. Definitely behind those numbers are cultural and moral risks and issues. That’s the price you’ll pay in the future.
As the saying goes “Tell me how you measure me, I’ll tell you how I behave”.
At Teal Unicorn we measure ourselves with just one measure:
– Are our customers happy?
And measure the system by:
– Are employees capable of working?
– Do they want to do well?
– Do they consider pleasing their customers as their top priority?
And of course, when the customer rejoices, the numbers come as a result even though we don’t target numbers.
And of course, to do that, leaders and managers need to become service leaders/managers, not command and control.
Do you know what a good system looks like? How can employees have the desire to delight customers?
Advanced organisations should move to people first. When employees are cared for, treated with kindness, they will care and treat their customers with kindness. We cannot give what we don’t have. A wise leader will serve the employees so that they can do their best and produce the desired results of the organization.