Be careful when measuring your targets

A few weeks ago, Seth Godin shared a pretty simple statement from Charles Goodhart: “ When a measure becomes a target, it ceases to be a good measure. “

To be honest, it took me a little while to understand what he meant. We set a lot of goals at our company, and we measure our progress toward them. How could that be a bad thing? It’s not, necessarily, but I think it works better when the work you do impacts the measured item, but isn’t something you can do directly.

Will Koehrsen shared a great summary on his blog that explains it well:

In order to increase revenue, the manager of a customer service call center starts a new policy: rather than being paid an hourly wage, every employee is compensated solely based on the number of calls they make. After the first week, the experiment seems like a resounding success: the call center is processing twice the number of calls per day!

The manager, who never bothers to listen to his employees’ conversations as long as their numbers are good, is quite pleased. However, when the boss stops by, she insists on going out to the floor and when she does so, both she and the manager are shocked by what they hear: the employees pick up the phone, issue a series of one word answers, and slam the phone down without waiting for a good-bye. No wonder the number of…