“When a measure becomes a target, it ceases to be a good measure.” – Goodhart’s Law
Within the ranks of the military, readiness can be a four-letter word, something to which anyone who’s spent hours of their lives locked in endless readiness meetings can attest. Before the gold on a lieutenant’s bars starts to fade, they know the expectations, whether it’s maintaining an operational readiness rate of 90%, ensuring no piece of equipment is inoperable for longer than 30 days, or earning a streamer for physical training, reenlistment, or DUI rates. There’s a measure for everything.
By themselves, metrics aren’t necessarily flawed. Metrics fuel goal-oriented organizations, providing measures by which to gauge progress toward achieving those goals. A readiness rate of 90%, for example, involves much more than just your equipment’s ability to roll out the motorpool gate on short notice. In the same vein, a clear understanding of the status of equipment inoperable over 30 days old provides insight into systemic readiness, identifying other factors that may be affecting overall readiness. And all those pretty streamers? They each provide an indicator of other variables in the readiness equation.
GOOD METRICS OR ZERO DEFECTS?
But when the metrics themselves become the target, as British economist Charles Goodhart warned in a 1975 article on monetary policy, they cease to be a useful measure of progress.
When those metrics become targets in themselves, a creative leadership team will find ways to “check the box,” knowing that analysis tends to stop at the metric and go no further. The deeper systemic inquiry necessary to identify and rectify potentially serious underlying issues never occurs. Some of this can be attributed to laziness or a simple lack of curiosity, but often reflects underlying organizational culture issues.
There is a strong link between Goodhart’s Law and a zero-defects culture, where failing to meet metrics – regardless of the reason – isn’t tolerated within the organization. When the metrics become the target and anything less will lead to negative consequences, people simply “tell them what they want to hear.” In other words, if all you want is a 90% readiness rate, you’re going to get a 90% readiness rate. If your only concern is that no equipment is inoperable longer than 30 consecutive days, then that’s what you’ll hear. People will do just enough to meet the metric and nothing more.
LYING TO OURSELVES
However, there’s a darker side to this issue. When leadership becomes singularly focused on flawed metrics and fail to maintain the same degree of focus on known systemic challenges – such as supply chain breakdowns, critical personnel shortfalls, or organizational cultural issues – it isn’t unusual for people to simply lie or clear the way for the nearest bus to run down a subordinate in a crowded conference room.
This unhealthy obsession with flawed metrics is hardly new. In their 2015 monograph, “Lying to Ourselves,” Leonard Wong and Stephen Gerras wrote at length about how quickly that obsession led to dishonesty among military leaders. If you know that failing to achieve a specified metric might lead to your public humiliation, then you might be more apt to lie about it. And we’ve all seen that play out in a conference room; it’s not always a matter of who lies, but who lies first. Because once the lying starts, you can’t reel the stories back in.
That obsession ultimately leads to what Wong and Gerras called ethical fading, where decisions are divorced from moral implications. Ethical fading allows people to “transform morally wrong behavior into socially acceptable conduct by dimming the glare and guilt of the ethical spotlight.” Listen to the language at any staff meeting and the signs of ethical fading are impossible to miss – handy euphemisms such as “checking the box” or “telling them what they want to hear.”
MEASURE WHAT MATTERS
How do you avoid all of this? First, set an organizational culture that allows for learning and growth, one that doesn’t penalize honest mistakes that aren’t habitual. Second, measure what matters. That might seem glib, but it’s not. Flawed metrics are often flawed because we stop at the metrics and fail to push to the aspirational goals that represent organizational success. If your aspirational goal is a 90% operational readiness rate, that shouldn’t also be the metric you use to gauge progress.
Drawing on his experience as a computer engineer at Intel in the 1970s, venture capitalist John Doerr literally wrote the book on this subject with his 2017 effort, Measure What Matters. Our leaders and institutions fail us, not because they’re inherently bad or unethical, but because they establish flawed metrics that lead us to the wrong objectives. Following Doerr’s thinking, it’s more than just metrics. It’s about setting meaningful, aspirational goals defined by objectives and key results (OKRs) supported by a system of key performance indicators (KPIs).
The objectives define what you want to accomplish. They’re directional, like a compass azimuth. Well-defined objectives are ambitious in nature and should make you feel a little uncomfortable, establishing the creative tension between your present state and your aspirational one. Key results define how you’re going to get there. They’re distance milestones, specific, time-bound, and measurable. They reduce your journey into more manageable legs that help to build momentum toward your goals.
Key performance indicators help to keep you focused on your goals by providing critical quantitative indicators of progress. KPIs allow you to measure progress toward either goals or milestones, ensuring that you are on track to achieve your objectives. KPIs are metrics tied to a specific goal or milestone during a specified time period. Setting well-structured KPIs is as simple as applying a SMART goals system during planning.
Peter Drucker famously said, “What gets measured gets done.” He was right, of course, but Charles Goodhart knew that metrics are a means to an end, not the ends themselves. Something we forget all too often.
