7 ms·

Reminds me of Goodheart's law[1]. We have known this for a long time, but it is hard to have an alternative system which scales well with huge organizations. F

Reminds me of Goodheart's law[1]. We have known this for a long time, but it is hard to have an alternative system which scales well with huge organizations. For startups and small companies, I could see an informal system working pretty well, but as the company grows to hundreds or thousands of employees, it becomes necessary to standardize and have some kind of metrics used for reporting and evaluations. This will inevitably shift the company's culture towards gaming those metrics. Somewhat like grading systems in education. High grades don't necessarily mean you will be capable of generating more value to society than average grades or even low grades. And students often become good at improving their grades without that actually adding much value. But there is a correlation. And we don't have many better (non-experimental) alternatives that I'm aware of. [1] https://en.wikipedia.org/wiki/Goodhart%27s_law https://en.wikipedia.org/wiki/Goodhart%27s_law

asplake 8y ago
> ...but as the company grows to hundreds or thousands of employees, it becomes necessary to standardize and have some kind of metrics used for reporting and evaluations. Does it? Is it inconceivable that each part works to its own goals and metrics consistent both with its own values and those of the wider organisation?
- michaelcampbell 8y ago
  > Is it inconceivable that each part works to its own goals and metrics consistent both with its own values and those of the wider organisation? Beyond a certain number of people, absolutely it is.
  - chii 8y ago
    > Beyond a certain number of people, absolutely it is. that's because of the lack of trust, and the flow of responsibility and control. If you structure a company such that the employees themselves has to be responsible for their output in such a way that higher output leads to more money for them, you'd not have this problem. For example, contractors who work on a results basis.
    - luiscleto 8y ago
      > employees themselves has to be responsible for their output in such a way that higher output leads to more money for them But what metric would you use to measure output that solves the gamification problem? Even for contractors or sales people (where you could use the sales volume), this could lead them to favor short term results and compromise the long-term health of the company (e.g. by favoring quick, low-quality solutions by contractors, or selling features that don't yet exist and creating unsustainable roadmaps by sales people).
      - jsty 8y ago
        You could reward them in the same way that executives are increasingly remunerated for their performance-based pay - in shares or other financial instruments with an enforced holding period that are linked to the health of the business / business unit as appropriate.
        luiscleto 8y ago
        While that's an interesting approach for compensation which might mitigate knowingly bad/irresponsible decisions, it doesn't look like it would address the core issue here of having to choose a metric to base compensation on. Maybe the gaming effect would be lessened by that compensation approach, but at a very large scale org, I doubt that it would. Although, it would be interesting to see real life studies of this, in case such practices have already been tried out.
        heavenlyblue 8y ago
        Does exec give a damn if they earn 5 or 10 million? It’s only true if you believe that the average human being is not opportunistic.
        hopler 8y ago
        If they don't, why are managers choosing to pay them $10m?
        8y ago
  - noobiemcfoob 8y ago
    You don't address the parent's point. Trying to group 1000 people together and measure all of them, sure that seems insurmountable for an informal system. Taking that same group of 1000, splitting them into subgroups of 7 and giving those individual groups their own goals and autonomy to pursue them may again allow for informal performance measurement.
- Jorge1o1 8y ago
  Yes. Happens all the time in large companies. https://www.nytimes.com/2010/02/04/opinion/04brass.html?pagewanted=1&ref=opinion https://www.nytimes.com/2010/02/04/opinion/04brass.html?page... Article is from 2010 Microsoft for example, was plagued by divisional infighting: ClearType was sabotaged.
solatic 8y ago
> This will inevitably shift the company's culture towards gaming those metrics. Yes, but that's only the beginning of the story. People gaming metrics is a type of security problem, in that "attackers" try to game the metrics while "defenders" try to make them less game-able by improving the accuracy and precision of how the metrics are gathered so that the final numbers continue to tell a valuable story over time. The issue isn't that metrics can be gamed; it's that organizations which pride themselves on being data-driven rarely make the investment in hiring blue teams and red teams to defend and attack the metrics. If you appreciate that investing in cyberdefense is key to protecting your company from cybersecurity threats, why can't you appreciate that investing in "metricsecurity" is key to protecting your company from "metricsecurity" threats?
- Angostura 8y ago
  > The issue isn't that metrics can be gamed The issue is that many of the most important parts of many organisational activities can't be easily measured through simple metrics at all.
  - solatic 8y ago
    I think this is a rubbish excuse made by people who don't understand the role of such a "blue team". If the organization initially adopts metrics that are counter-productive (e.g. measuring feature completion and not technical debt), it is the role of the blue team to change the metrics such that the neglected areas are properly accounted for in final performance metrics. No metrics should be final; only iteratively tuned to achieve results that are more and more indicative of the underlying performance. It is difficult, but still possible, to measure technical debt and other "hard" metrics. It is precisely the job of the blue team to deal with that.
    - hammock 8y ago
      There is a philosophical debate underlying this. Take the analogy of a ML algorithm: We know many algos are DESIGNED to be a black box, to be unexplainable. Red team iterates an incredibly effective algorithm that produces the desired outputs (with unseen risk built up as well). Blue team, in order to manage risk, is tasked with .. explaining the unexplainable process? An impossible task. Is it possible that human/organizational processes can be also unexplainable?
FabHK 8y ago
Thanks for bringing this up; I was a bit disheartened that an article basically talking about Goodhart's Law doesn't mention it. EDIT to add: To be fair, the author's book (on which the article is based) mentions the term twice (and twice in the references). Still feels like this is inadequate, though. https://books.google.com/books?redir_esc=y&id=rgs8DwAAQBAJ&q=goodhart#v=snippet&q=goodhart&f=false https://books.google.com/books?redir_esc=y&id=rgs8DwAAQBAJ&q...

asplake 8y ago

> ...but as the company grows to hundreds or thousands of employees, it becomes necessary to standardize and have some kind of metrics used for reporting and evaluations. Does it? Is it inconceivable that each part works to its own goals and metrics consistent both with its own values and those of the wider organisation?

michaelcampbell 8y ago
> Is it inconceivable that each part works to its own goals and metrics consistent both with its own values and those of the wider organisation? Beyond a certain number of people, absolutely it is.
- chii 8y ago
  > Beyond a certain number of people, absolutely it is. that's because of the lack of trust, and the flow of responsibility and control. If you structure a company such that the employees themselves has to be responsible for their output in such a way that higher output leads to more money for them, you'd not have this problem. For example, contractors who work on a results basis.
  - luiscleto 8y ago
    > employees themselves has to be responsible for their output in such a way that higher output leads to more money for them But what metric would you use to measure output that solves the gamification problem? Even for contractors or sales people (where you could use the sales volume), this could lead them to favor short term results and compromise the long-term health of the company (e.g. by favoring quick, low-quality solutions by contractors, or selling features that don't yet exist and creating unsustainable roadmaps by sales people).
    - jsty 8y ago
      You could reward them in the same way that executives are increasingly remunerated for their performance-based pay - in shares or other financial instruments with an enforced holding period that are linked to the health of the business / business unit as appropriate.
      - luiscleto 8y ago
        While that's an interesting approach for compensation which might mitigate knowingly bad/irresponsible decisions, it doesn't look like it would address the core issue here of having to choose a metric to base compensation on. Maybe the gaming effect would be lessened by that compensation approach, but at a very large scale org, I doubt that it would. Although, it would be interesting to see real life studies of this, in case such practices have already been tried out.
      - heavenlyblue 8y ago
        Does exec give a damn if they earn 5 or 10 million? It’s only true if you believe that the average human being is not opportunistic.
        hopler 8y ago
        If they don't, why are managers choosing to pay them $10m?
        8y ago
- noobiemcfoob 8y ago
  You don't address the parent's point. Trying to group 1000 people together and measure all of them, sure that seems insurmountable for an informal system. Taking that same group of 1000, splitting them into subgroups of 7 and giving those individual groups their own goals and autonomy to pursue them may again allow for informal performance measurement.
Jorge1o1 8y ago
Yes. Happens all the time in large companies. https://www.nytimes.com/2010/02/04/opinion/04brass.html?pagewanted=1&ref=opinion https://www.nytimes.com/2010/02/04/opinion/04brass.html?page... Article is from 2010 Microsoft for example, was plagued by divisional infighting: ClearType was sabotaged.

solatic 8y ago

> This will inevitably shift the company's culture towards gaming those metrics. Yes, but that's only the beginning of the story. People gaming metrics is a type of security problem, in that "attackers" try to game the metrics while "defenders" try to make them less game-able by improving the accuracy and precision of how the metrics are gathered so that the final numbers continue to tell a valuable story over time. The issue isn't that metrics can be gamed; it's that organizations which pride themselves on being data-driven rarely make the investment in hiring blue teams and red teams to defend and attack the metrics. If you appreciate that investing in cyberdefense is key to protecting your company from cybersecurity threats, why can't you appreciate that investing in "metricsecurity" is key to protecting your company from "metricsecurity" threats?

Angostura 8y ago
> The issue isn't that metrics can be gamed The issue is that many of the most important parts of many organisational activities can't be easily measured through simple metrics at all.
- solatic 8y ago
  I think this is a rubbish excuse made by people who don't understand the role of such a "blue team". If the organization initially adopts metrics that are counter-productive (e.g. measuring feature completion and not technical debt), it is the role of the blue team to change the metrics such that the neglected areas are properly accounted for in final performance metrics. No metrics should be final; only iteratively tuned to achieve results that are more and more indicative of the underlying performance. It is difficult, but still possible, to measure technical debt and other "hard" metrics. It is precisely the job of the blue team to deal with that.
  - hammock 8y ago
    There is a philosophical debate underlying this. Take the analogy of a ML algorithm: We know many algos are DESIGNED to be a black box, to be unexplainable. Red team iterates an incredibly effective algorithm that produces the desired outputs (with unseen risk built up as well). Blue team, in order to manage risk, is tasked with .. explaining the unexplainable process? An impossible task. Is it possible that human/organizational processes can be also unexplainable?

FabHK 8y ago

Thanks for bringing this up; I was a bit disheartened that an article basically talking about Goodhart's Law doesn't mention it. EDIT to add: To be fair, the author's book (on which the article is based) mentions the term twice (and twice in the references). Still feels like this is inadequate, though. https://books.google.com/books?redir_esc=y&id=rgs8DwAAQBAJ&q=goodhart#v=snippet&q=goodhart&f=false https://books.google.com/books?redir_esc=y&id=rgs8DwAAQBAJ&q...