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Posted by yagizdegirmenci 10/26/2024

Goodhart’s law isn’t as useful as you might think (2023)(commoncog.com)
140 points | 81 commentspage 2
James_K 10/27/2024|
In short, describe the actions you want people to take rather than the results you think those actions should achieve. Or perhaps more fundamentally, you should know what people are doing and you won't know that when you are only looking at an opaque metric.
deeviant 10/27/2024||
I'm still not convinced. Goodhart’s Law is rooted in human behavior—once people know what’s being measured, they’ll optimize for that, often distorting the system or the data to hit targets. The article's solution boils down to “just do it right” by refining metrics and improving systems, but that’s easier said than done. It ignores the fact that people will always game metrics if their rewards depend on them. Plus, it conflates data-driven decision-making with performance evaluation, which are very different. The psychology behind Goodhart’s Law isn’t solved by more metrics tweaking.
thenobsta 10/26/2024||
This doesn't feel well elucidated, but I've been thinking about Goodhart's law in other area's of life -- e.g. Owning a home is cool and can enable some cool things. However, when home ownership becomes the goal, it's becomes easy to disregard a lot of life giving things in pursuit of owning a home.

This seems to pop up in a lot of areas and I find myself asking is X thing a thing I really desire or is it something that is a natural side effect of some other processes.

soared 10/26/2024||
For most people owning a home isn’t the goal, it’s to be able to adjust their living space how they see fit, have a stable place to raise children, remove the risk of landlords, etc
acdha 10/27/2024||
Isn’t that exactly the point? Some people set their goal as buying the house but forget to reevaluate how well they’re doing at their true goals - like do they really benefit from the extra rooms enough to be worth commuting taking away family time, or are they doing renovations often enough to say they’re actually taking advantage of that benefit?
kqr 10/27/2024|||
This is a question of values. When home ownership is an implicit value of the culture one lives in, the reason to own a home is to own a home.

Once you start looking for these things that are done for their own sake (or really to gain respect in a community) you notice how pervasive they are and how different they can be for two people next to each other.

I recommend Gregory's Savage Money on the subject. My review here: https://entropicthoughts.com/book-review-savage-money

nrnrjrjrj 10/26/2024||
If you are smart and think alot you can do well renting and investing elsewhere.

You can also ask what is life about?

This is hard to do because the conclusion may need to break moulds, leading to family estrangement and losing friends.

I suspect people who end up having a TED talk in them are people who had the ability through courage or their inherited neural makeup to go it alone despite descenting voices. Or they were raised to be encouraged to do so.

ssivark 10/28/2024||
What I find striking is the emphasis on tracking and managing inputs (to develop a healthy causal model for management). This is in contrast with advice that's commonly passed around (ostensibly attributable to OKRs, High Output Management, etc -- though I haven't carefully read the original sources), with heavy emphasis on the output but eschew focusing on input metrics. While it avoids the failure mode of focusing on causally irrelevant metrics, it also assumes that the right causal model has already been discovered and there's no learning process here. This impedes the development of an agile organization that is learning constantly (growth mindset) instead promoting a "fixed" mindset where people/teams can either execute well or not, and the only control lever is hiring/firing/promoting those who seem to "get it". Fantastic and thought-provoking article!
lamename 10/26/2024||
This is all well and good, but unfortunately depends on the people pushing for the metric/system to give a shit about what the metric is supposed to improve. There are still far too many that prefer to slap 1 or 2 careless metrics on an entire team, optimize until they're promoted, then leave the company worse off.
ang_cire 10/26/2024|
Sounds like bad management at the top, too. If leaders can't determine if middle management is showing them success in a metric that doesn't actually help the business, they're doing the same thing (paycheck till the parachute arrives).
mark-r 10/27/2024||
Reminds me of one of my favorite Dilbert cartoons: https://www.reddit.com/r/ProgrammerHumor/comments/k5hka0/bug...
yarg 10/27/2024||
Goodhart's law can diagnose an issue, but it prescribes no solutions.

However, it's still better to recognise a problem, so you can at least look into ways of improving the situation.

satisfice 10/27/2024||
"...when you’re incentivising organisational behaviour with metrics, there are really only three ways people might respond: 1) they might improve the system, 2) they might distort the system, or 3) they might distort the data."

This is wrong, and the wrongness of it undermines the whole piece, I think:

- A fourth way people respond is to oppose the choice of target and/or metric; to question its value and lobby to change it.

- A fifth way people respond is to oppose the whole idea of incentives on the basis of metrics (perhaps by citing Goodhart's Law... which is a use of Goodhart's Law).

Goodhart's Law is useful not just because it reminds us that making a metric a target may incentivize behavior that makes THAT metric a poor indicator of a good system, but also because choosing ANY metric as a target changes everyone's relationship with ALL metrics-- it spells the end of inquiry and the beginning of what might be called compliance anxiety.

Lvl999Noob 10/27/2024||
While true, I think your additions to the behaviors are rather... useless. Out of the original three, notice that one is the actual behaviour we want to happen and two are insidious side effects that we want to prevent.

Your proposed fourth and fifth outcome behaviours, on the other hand, are neither. Most importantly, they are transient (at least ideally). Either the workforce and the management come to an agreement and metrics continue (or discontinue) or they don't and the business stays in a limbo. It is an emergency (or some other word with lower impact; incident?). There isn't a covert resistance by some teams specifically working against the metric and lowering it while also hiding themselves from notice.

satisfice 10/27/2024||
My additions are important if you want to understand the value of Goodhart’s Law. They are logically necessary for me to make my point— which is that his analysis of the situation is flawed.

I am bemused that you deride them, given that they are, in fact, how I have responded to metrics in technical projects since I first developed a metrics program for Borland, in ‘93. (I championed inquiry metrics and opposed control metrics.)

cutemonster 10/28/2024||
> inquiry metrics

That sounds interesting, how did you do that? What different inquiry metrics did you use if I can ask, what did the others think, how did it all work out?

mkleczek 10/27/2024||
How can people (either individuals or groups) assess (or even define) achieving goals without SOME metric?
skmurphy 10/26/2024||
There is a very good essay in the first comment by "Roger" dated Jan-2023, reproduced below. Skip the primary essay and work from this:

"I really appreciated this piece, as designing good metrics is a problem I think about in my day job a lot. My approach to thinking about this is similar in a lot of ways, but my thought process for getting there is different enough that I wanted to throw it out there as food for thought.

One school of thought 9https://www.simplilearn.com/tutorials/itil-tutorial/measurem...) I have trained in is that metrics are useful to people in 4 ways:

    1. Direct activities to achieve goals
    2. Intervene in trends that are having negative impacts
    3. Justify that a particular course of action is warranted
    4. Validate that a decision that was made was warranted
My interpretation of Goodhart’s Law has always centered more around duration of metrics for these purposes. The chief warning is that regardless of the metric used, sooner or later it will become useless as a decision aid. I often work with people who think about metrics as a “do it right the first time, so you won’t have to ever worry about it again”. This is the wrong mentality, and Goodhart’s Law is a useful way to reach many folks with this mindset.

The implication is that the goal is not to find the “right” metrics, but to instead find the most useful metrics to support the decisions that are most critical at the moment. After all, once you pick a metric, 1 of 3 things will happen:

    1. The metric will improve until it reaches a point where you are not improving it anymore, at which point it provides no more new information.
    2. The metric doesn’t improve at all, which means you’ve picked something you aren’t capable of influencing and is therefore useless.
    3. The metric gets worse, which means there is feedback that swamps whatever you are doing to improve it.
Thus, if we are using metrics to improve decision making, we’re always going to need to replace metrics with new ones relevant to our goals. If we are going to have to do that anyway, we might as well be regularly assessing our metrics for ones that serve our purposes more effectively. Thus, a regular cadence of reviewing the metrics used, deprecating ones that are no longer useful, and introducing new metrics that are relevant to the decisions now at hand, is crucial for ongoing success.

One other important point to make is that for many people, the purpose of metrics is not to make things better. It is instead to show that they are doing a good job and that to persuade others to do what they want. Metrics that show this are useful, and those that don’t are not. In this case, of course, a metric may indeed be useful “forever” if it serves these ends. The implication is that some level of psychological safety is needed for metric use to be more aligned with supporting the mission and less aligned with making people look good."

turtleyacht 10/26/2024|
Thank-you. The next time metrics are mentioned, one can mention an expiration date. That can segue into evolving metrics, feedback control systems, and the crucial element of "psychological safety."

A jaded interpretation of data science is to find evidence to support predetermined decisions, which is unfair to all. Having the capability to always generate new internal tools for Just In Time Reporting (JITR) would be nice, even so reproducible ones.

This encourages adhoc and scrappy starts, which can be iterated on as formulas in source control. Instead of a gold standard of a handful of metrics, we are empowered to draw conclusions from all data in context.

skmurphy 10/26/2024||
I am not "Roger," but I can recognize someone who has long and practical experience with managing metrics and KPIs and their interaction with process improvement. Instead of an "expiration date" I would encourage you to define a "re-evaluation date" that allows enough time to judge the impact and efficacy of the metrics proposed and make course corrections as needed (each with its own review dates).

One good book on the positive impact of a metric that everyone on a team or organization understands is "The Great Game of Business" by Jack Stack https://www.amazon.com/Great-Game-Business-Expanded-Updated-... I reviewed it at https://www.skmurphy.com/blog/2010/03/19/the-business-is-eve...

Here is a quote to give you a flavor of his philosophy:

"A business should be run like an aquarium, where everybody can see what's going on--what's going in, what's moving around, what's coming out. That's the only way to make sure people understand what you're doing, and why, and have some input into deciding where you are going. Then, when the unexpected happens, they know how to react and react quickly. "

Jack Stack in "Great Game of Business."

krisstring 10/27/2024|||
While Goodhart’s Law often occurs because of a narrow focus on a metric without understanding its role in the larger system, the approach in Jack Stack’s The Great Game of Business is to make targets an educational tool, teaching employees how to interpret and impact those targets responsibly.

GGOB, by 1. involving employees in decision-making and teaching them about metrics, 2. giving them a line-of-sight for how their contribution impacts the overall business, and 3. providing a stake in the outcome

creates collective accountability and success, and reduces the likelihood of metric manipulation.

Bottom line: GGOB recognizes that business success takes everyone, at all levels, and values the input of each employee, right down to the part-time janitor. The metrics are used as tools, like the scoreboard in baseball, to guide decision making and establish what winning as a team looks like. It all comes down to education and getting everyone aligned and pulling in the same direction.

skmurphy 10/27/2024||
I agree it's really about effective delegation, it acknowledges the risks that Goodhart warns about and suggests how to manage if not avoid them.
shadowsun7 10/26/2024|||
I should note that this essay kicks off an entire series that eventually culminates in a detailed examination of the Amazon Weekly Business Review (which takes some time to get to because of a) an NDA, and b) it took some time to test it in practice). The Goodhart’s Law essay uses publicly available information about the WBR to explain how to defeat Goodhart’s Law (since the ideas it draws from are five decades old); the WBR itself is a two decades-old mechanism on how to actually accomplish these high-falutin’ goals.

https://commoncog.com/the-amazon-weekly-business-review/

Over the past year, Roger and I have been talking about the difficulty of spreading these ideas. The WBR works, but as the essay shows, it is an interlocking set of processes that solves for a bunch of socio-technical problems. It is not easy to get companies to adopt such large changes.

As a companion to the essay, here is a sequence of cases about companies putting these ideas to practice:

https://commoncog.com/c/concepts/data-driven/

The common thing in all these essays is that it doesn’t stop at high-falutin’ (or conceptual) recommendation, but actually dives into real world application and practice. Yes, it’s nice to say “let’s have a re-evaluation date.” But what does it actually look like to get folks to do that at scale?

Well, the WBR is one way that works in practice, at scale, and with some success in multiple companies. And we keep finding nuances in our own practice: https://x.com/ejames_c/status/1849648179337371816

skmurphy 10/26/2024||
It looks like any other decision record where you set a date to evaluate the impact of a policy or course of action and make sure it's working out the way that you had anticipated.
shadowsun7 10/26/2024||
And how are you going to tell that when you have a) variation (that is, every metric wiggles wildly)? And also b) how are you able to tell if it has or hasn’t impacted other parts of your business if you do not have a method for uncovering the causal model of your business (like that aquarium quote you cited earlier?)

Reality has a lot of detail. It’s nice to quote books about goals. It’s a different thing entirely to achieve them in practice with a real business.

skmurphy 10/27/2024||
I agree that reality is complex, but I worry you are conflating the challenges of running an Amazon-scale business with running the smaller businesses that most of the entrepreneurs on HN will need to manage. I thought Roger offered a more practical approach in about 10% of the words that you took. I am sorry if I have offended you; I was trying to save the entrepreneurs on HN time.

As to Jack Stack's book, I think the genius of his approach is communicating simple decision rules to the folks on the front line instead of trying to establish a complex model at the executive level that can become more removed from day-to-day realities. In my experience, which involves working in a variety of roles in startups and multi-billion dollar businesses over the better part of five decades, simple rules updated based on your best judgment risk "extinction by instinct" but outperform the "analysis paralysis" that comes from trying to develop overly complex models.

Reasonable men may differ.

shadowsun7 10/27/2024||
This comment is for HN readers who might be interested in solutions.

My two questions (a) and (b) were not rhetorical. Let’s get concrete.

a) You are advising a company to “check back after a certain period”. After the certain period, they come back to you with the following graph:

https://commoncog.com/content/images/2024/01/prospect_calls_...

“How did we do? Did we improve?”

How do you answer? Notice that this is a problem regardless of whether you are a big company or a small company.

b) 3 months later, your client comes back and asks: “we are having trouble with customer support. How do we know that it’s not related to this change we made?” With your superior experience working with hundreds of startups, you are able to tell them if it is or isn’t after some investigation. Your client asks you: “how can we do that for ourselves without calling on you every time we see something weird?”

How do you answer?

(My answers are in the WBR essay and the essay that comes immediately before that, natch)

It is a common excuse to wave away these ideas with “oh, these are big company solutions, not applicable to small businesses.” But a) I have applied these ideas to my own small business and doubled revenue; also b) in 1992 Donald Wheeler applied these methods to a small Japanese night club and then wrote a whole book about the results: https://www.amazon.sg/Spc-Esquire-Club-Donald-Wheeler/dp/094...

Wheeler wanted to prove, (and I wanted to verify), that ‘tools to understand how your business ACTUALLY works’ are uniformly applicable regardless of company size.

If anyone reading this is interested in being able to answer confidently to both questions, I recommend reading my essays to start with (there’s enough in front of the paywall to be useful) and then jump straight to Wheeler. I recommend Understanding Variation, which was originally developed as a 1993 presentation to managers at DuPont (which means it is light on statistics).

rc_mob 10/27/2024|
its not a "law" of course. should not be called a law
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