
When targets and metrics are bad for business - tbeutel
https://thehustle.co/Goodharts-Law
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Jtsummers
For more on this I recommend both _The Goal_ and _Out of the Crisis_ (the
latter more, but the former also discusses this).

Targets are often useful because they're proxies for the unmeasurable. But, as
discussed in the article, they can easily become goals themselves, which take
you away from the actual intended business of the day.

In _The Goal_ , the company has a target of 100% productivity of all
equipment/work stations. The thought being, if it's not producing then that's
lost time. However, it increases costs (overall) because you end up with
excess inventory leading to the constraint or bottleneck of the system. That
inventory has no value (it's not sold or sellable) and has costs (storage, at
a minimum; possibly maintenance) and can become stale (becoming worthless, at
which point with the carrying cost it has negative value). EDIT: Another
problem with that target is that it penalizes those at the end of the
production chain, who _can 't_ maintain high productivity (they're after the
bottleneck). Their production rates are limited to whatever the bottleneck can
produce. Ever been in the IV&V team? "We're late because of you...", no you're
late because we received the product one month before it was supposed to ship.

 _Out of the Crisis_ also discusses another problem with targets: If it was
just a matter of setting the target, why were you missing it in the first
place? There's a larger system the employees fit in which constrains their
performance. Address that system, or the target will be unattainable or
unsustainable.

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gav
> Targets are often useful because they're proxies for the unmeasurable

Not just the unmeasurable, there's a lot of KPIs used because they are easier
than figuring out metrics that are meaningful.

Here's some examples I've seen:

Number of Visitors: a large manufacturer with no direct channel considered the
number of visitors to their website as the most important thing and this was
reported to the highest levels. Without some way of determining the quality of
the visitors, or if their experience was valuable, the actual amount is
useless.

Engagement: a bank was tracking how many visits and how minutes customers
spent on their website every month, they considered more time a good thing.
Personally I want to spend the minimum possible time dealing with my bank,
preferably zero interaction, making processes more streamlined rather than
having more content is key.

Bad metrics allow you to report up the chain that you are moving the needle in
some way and justify budgets.

~~~
Jtsummers
I believe this was meant as a reply to my comment, and I agree with you
entirely.

Often the easiest metrics are the least useful. I worked in an office that
wanted "production hours" (the business was largely labor-oriented, where that
was actually a semi-useful metric, but it's not a useful metric in software
development). It was gamed, as long as people charged directly to a project
they were "productive". The costs of training and all were hidden as much as
possible so projects and teams could seem productive. This meant that
customers were being billed hundreds of dollars an hour for training that may
not have even related to their project (bordering on fraud here, certainly
abuse of some kind). But it also meant that the training budget
(organizational) was slowly being cut, because no one was using it.

Selecting your KPIs carefully may not prevent failure, but choosing them
poorly can almost guarantee failure or mediocrity.

------
forgingahead
Scott Adams has written a fair amount on Systems instead of Goals:

[https://blog.dilbert.com/2013/11/18/goals-vs-
systems/](https://blog.dilbert.com/2013/11/18/goals-vs-systems/)

------
rahimnathwani
If you're interested in setting good targets and metrics, I highly recommend
these books on OKRs:

Measure what matters, Doerr: The newest book on OKRs, by the guy who
introducted OKRs to Google

Move, Patty Azzarello: A really really great book on executing strategic
change, that has a section about setting 'Control Points', which are roughly
equivalent to what Intel/Google etc. refer to as 'Key Results'

Radical Focus: A light read about OKRs. Good as a first book on OKRs, but not
as detailed as the two books above.

Introduction to OKRs: A very short book on OKRs. Good as a first book on OKRs
if you have a short attention span.

~~~
Jtsummers
Measure What Matters:
[https://www.amazon.com/dp/B078FZ9SYB/](https://www.amazon.com/dp/B078FZ9SYB/)
(also on Safari Books Online)

Move:
[https://www.amazon.com/dp/B01N9ZVTGG/](https://www.amazon.com/dp/B01N9ZVTGG/)

Radical Focus: [https://www.amazon.com/Radical-Focus-Achieving-Important-
Obj...](https://www.amazon.com/Radical-Focus-Achieving-Important-
Objectives/dp/0996006052/)

Introduction to OKRs:
[https://www.oreilly.com/business/free/files/introduction-
to-...](https://www.oreilly.com/business/free/files/introduction-to-okrs.pdf)
(I'm assuming this is the one, came up in Google and you didn't provide an
author).

I'm not sure if _Move_ or _Radical Focus_ are on Safari Books Online, but
they're not on my company's subscription to it. Thanks for the reads, I'm
pulling up the 4th one to read because I know my management doesn't have the
attention span to read anything longer than 37 pages.

