Goodhart’s law

It simply states – when a measure becomes a target, it is subsequently no longer a good measure.

There is scarcely anything that explains unintended consequences better than this law.

Interestingly, although it is called Goodhart’s law, it was actually coined by an anthropologist – Marilyn Strathern, when she recognized that a statement in 1975, by economist – Charles Goodhart applied beyond economics. The original statement was actually – “Any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes.”

Paradoxically, this law is not limiting, but liberating. Every leader must understand the relationship between targets and behaviors, and intentionally design targets that drive the desired behaviors.

I once experienced this in a compliance score target setting. The target for the compliance score was 100%, so everybody was racing to 100%, sometimes just ticking the box to look good. External checks always showed a score significantly different from the internal score, sometimes with a variance greater than 30%.

Then the leader decided to change the target. He set a new target which stipulated that the difference between the internal compliance check score and the external compliance check score should not be above 2%. The behavior of people immediately changed from racing to 100%, to being sincere on where exactly they are. That was when real progress started.

– Osasu Oviawe

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