Goodhart’s Law, named after economist Charles Goodhart, warns about the unintended consequences of focusing too much on a single metric.
When a measure becomes a target, it ceases to be a good measure.
Examples of Goodhart’s Law
- Education and Test Scores: Ideally, education aims to instill knowledge, critical thinking, and well-roundedness. However, when test scores become the focus (the measure), teachers might prioritize test-taking strategies over actual learning, resulting in:
- Teaching to the test: Focusing on specific test formats rather than broad understanding.
- Grade inflation: Inflating grades to make results look better, even if learning hasn’t improved.
- Police Work and Arrests: If police are judged solely on arrest numbers, they might prioritize quantity over quality, potentially neglecting community policing or focusing on minor offenses.
- Employee Performance and Metrics: If a salesperson’s success depends solely on sales volume, they might prioritize quick deals over building long-term customer relationships.
Instead of targeting a certain metric we should…
- Multiple Measures: Using a variety of metrics to capture different aspects of performance.
- Focusing on the Why: Understanding the underlying goals behind any metric.
- Adapting to Gaming: Recognizing when metrics are being manipulated and adjusting them accordingly.
By understanding Goodhart’s Law, we can avoid focusing on the easily measured at the expense of the truly important.