Should you be aware of the Goodhart’s law?

13/02/2024
Choice Architecture

Have you ever set a goal that, while achieving it felt good, but ultimately led to unintended consequences? This frustrating phenomenon has a name: Goodhart’s Law. Coined by economist Charles Goodhart in 1975, it states: “When a measure becomes a target, it ceases to be a good measure.” In simpler terms, focusing solely on achieving a specific metric can distort, and even undermine, the true purpose behind it.

From economics to everyday life

Goodhart initial observation was related to monetary policy. When a specific measure of money supply became a policy target, individuals found ways to manipulate it, rendering it an unreliable indicator of the actual economy’s health. This core principle transcends economics, impacting our personal lives and organizational structures. This can also assume different degrees of ‘severity’ based on the nature of a population – some are by nature sticking more to imposed rules and regulations, some muchless.

Consider a student aiming for the best grade. While good grades indeed reflect learning, focusing only on achieving a GRADE, might lead to dumb memorization of concepts, sacrificing understanding for test scores. This can have long-term consequences, like struggling with critical thinking skills in university or career situations where textbook knowledge alone isn’t enough.

Similarly, a company incentivizing high sales figures might see employees prioritize short-term deals over building valuable customer relationships that lead to sustainable growth.

Few real-world examples: when metrics go rogue

Education: Standardised tests have become a dominant force in education (think about any Language test out there A1, B1, C1 etc, TOEFL, IELTS etc..), used to measure student performance and compare schools. While they provide some data points, their emphasis on specific formats and limited content can have perverse effects:

Teaching to the test: Teachers might narrow their curriculum to focus on what’s tested, neglecting valuable subjects or skills like critical thinking, creativity. This creates a “teaching to the test” culture that prioritizes superficial performance over genuine learning and understanding.
Pressure and Anxiety: Students facing high-stakes testing experience immense pressure and anxiety, which can negatively impact their learning potential.

Public Health: Hospitals are often evaluated based on metrics like re-admission rates, length of stay, and cost per patient, in most western health systems. While these metrics aim to improve efficiency and quality, focusing solely on them can have unintended consequences:

Premature discharge: Hospitals motivated by low readmission rates might discharge patients prematurely, potentially compromising their long-term health and increasing the risk of readmission later. News are full of patients poorly diagnosed.
Neglecting preventative care: Focusing solely on treating acute episodes might lead to neglecting preventative care, which can be more cost-effective and improve overall health outcomes in the long run. But it’s in nobody interest to advocate for eating more Broccoli, let’s be honest.

Social Media: Platforms like Facebook and X rely on engagement metrics like likes, shares, and clicks to optimize their algorithms and keep users engaged. While this drives user engagement, it can have detrimental effects:

Spread of Misinformation & fake news: Sensational and divisive content often generates more engagement than factual information, leading to the spread of misinformation and the amplification of extreme voices. I don’t think we need to dig much deeper than the story of the former twitter (X) in the last 6-7 years.
Filter Bubbles and echo chambers: Algorithms personalize content based on user engagement, creating “filter bubbles” where users are only exposed to information that confirms their existing beliefs, hindering healthy debate and critical thinking. Leveraging yet another behavioural phenomena – Confirmation Bias.
Mental Health Concerns: The constant pursuit of social approval and the curated portrayal of lives on social media contributes to anxiety, and feelings of inadequacy, particularly among younger users.

The list could be very long, but some notable addition can be the fight against Climate Change; focusing solely on carbon emission reduction goals incentivises companies to offset emissions instead of reducing them at the source, overlooking long-term solutions. Or in general, looking at GDP/Economy growth, focusing solely on it, might neglect factors like environmental sustainability, social equality, leading to unsustainable development models as we have

These examples illustrate how Goodhart’s Law can manifest in various domains, highlighting the importance of using metrics thoughtfully and considering their potential unintended consequences.

Navigating it

Knowing about Goodhart’s Law empowers us to be more mindful of its downsides. Here are some ideas to mitigate its impact:

1. Use Multiple Metrics: Relying on a single indicator is risky. Use a diverse set of metrics that capture different aspects of your goal. For example, in education, consider student engagement, critical thinking skills, and project-based learning alongside standardized test scores. This provides a more holistic understanding and reduces the chance of gaming any single measure.

2. Focus on the “Why”: Don’t lose sight of the underlying reason behind your goal. Regularly remind yourself and others of the desired outcome, not just the metric itself. Social media platforms could prioritize metrics like constructive discussions, factual content engagement, and user well-being alongside traditional engagement metrics to foster healthier online communities.

3. Embrace Adaptability: Understand that circumstances change, and what works today might not be optimal tomorrow. Be flexible and willing to adapt your metrics and goals as needed. The rise of misinformation on social media highlights the need for adaptable algorithms that prioritize factual information and constructive dialogue even if it doesn’t generate the same level of immediate engagement as sensational content.

Cultivating a Culture of Purpose

While metrics offer valuable insights, focusing solely on them risks sacrificing the essence of what we’re trying to achieve. Goodhart’s Law is a valuable reminder that metrics are tools, not goals.

By using them thoughtfully, considering their limitations, and staying true to our underlying values, we can navigate the complexities of measurement and achieve truly sustainable outcomes.

Some Articles: