Goodhart’s Law and clarity of goals

0
185 views

Share on LinkedIn

I’d written previously about Goodhart’s Law, which goes along the lines of, once a metric becomes a goal it ceases to be a good measure.  Now, I choose the words “metric”, “goal”, and “measure” all deliberately because they mean slightly different things (even if their subject is the same).  A measure is the most generic of the three as it simply represents something that is, well, measured.  It could be any number of things that you pay attention to or not; something reported or not; something you strive to increase/decrease/stabilize.  A metric is a little more specific for this purpose as it’s actually something you are monitoring or at least paying closer attention to.  Metrics are a subset of measures.  Finally, goals may not even be observed but rather aspirational, and often change if they’ve either been met or otherwise deemed unattainable or unnecessary.  If you deal with numbers—or of any sort of business at all—you’re constantly bombarded by measures, metrics, and goals.

There’s a reason Goodhart’s Law is applicable, and, as I mentioned in that earlier post, it has to do with human nature:  People, whether their motivations are nefarious, self-serving, or even oblivious, will strive toward goals—sometimes even at the expense of the overall intention of the goal in the first place.  The single-minded push to “hit a number” often leads to unintended consequences and a lack of focus on why the goal was set in the first place:  usually the state that an achieved goal is supposed to represent or otherwise be a proxy for in real life.

But another reason Goodhart’s Law rings true and comes into play has to do with your business processes.  This reasoning rests on consistency and efficiency.  Let’s check out both.

If individual numeric goals are all you put in front of your teams (the folks responsible for hitting them), each member of that team will put his or her head down and do whatever it takes to hit that goal.  The problem is that they’ll each interpret those goals in their own way, and determine their own way to get there.  That’s great for creativity and experimentation.  However, if what you’re looking for is consistent Customer experiences, it can be disastrous.  Simply saying “here’s the number we want each person to hit,” and seeing how people creatively solve for that goal can provide you with an outstanding brainstorming session.  But if your team members’ individual goals are presented to them that way and codified as such, it’s a sure bet Customers will experience things differently from associate to associate.  Even if, with a sense of teamwork, you propose group goals, each member will interpret his or her contribution differently and therefore likely have disparate approaches resulting in disparate experiences for your Customers.  And we all know that inconsistency is a killer for CX.

Another, related but different risk associated with this approach, is that when it comes time to change something, the change itself will be unmanageable and inefficient.  Think about it:  if everybody is doing things each their own way (because everybody will have their own interpretation of the goal and devise their own way of achieving it), what happens when you want to make a shift in the goal, be it changing the target value or a different goal altogether?  The old cliché about herding cats comes to mind.  On the other hand, if there is a consistent and shared (i.e., standardized) way of doing things, hitting a new goal can be achieved with a change to process across the board rather than everybody scrambling with again determining their own solution for how to meet the new expectations.  If everybody’s doing things the same way (which is also good from a consistent CX perspective, as mentioned above), it’s easier to turn that ship than a thousand tiny boats.

The solution to this conundrum has two steps:  First, be clear about why your goal is important.  Then, once that’s clear, shut up and listen to those charged with hitting that goal offer you feedback.  If they understand why a goal is important, they can offer reasons why the goal you’ve chosen won’t necessarily get you there.  For example, if you want to increase revenues, sales teams can go hog-wild lavishing perks and incentives on your Customers and potential Customers.  That can drive those revenues up and you into the poor house.  However, if your sales teams understand that revenue is important to you because ultimately you want the company to be more profitable, they will tell you that there are two sides to that coin.  Now, this is an obvious example because of course you know that…but would you say all of your sales associates would interpret your charge to “increase revenues!” without any further explanation the same way you’d want them to?

Clarity in your mission and a willingness to learn from those closest to the work will pay off in helping you derive meaningful goals and drive your entire organization, united, toward achieving your vision.

(Originally Published 20200605)

– LtCol Nicholas Zeisler, CCXP, LSSBB, CSM

– Principal, Zeisler Consulting