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Everything about KPIs in this blog, Goodhart's law, the comments... it's all true. That said, I'm not sure KPIs themselves are the centre of this problem. A na

Everything about KPIs in this blog, Goodhart's law, the comments... it's all true. That said, I'm not sure KPIs themselves are the centre of this problem. A national olympic team (or any competitive sports team) using KPIs probably would not experience these problems. They might get over-exuberant and over optimise slightly. Athletes might game the system slightly. But, it's unlikely that a professional sports team degenerates to levels of KPI affliction like an average corporation. No matter the corruption, olympic teams are made up of people who really want to win medals. Athletes, Coaches. Dieticians. Managers. Administrators. Etc. They're not angels, they're just not as focused on appeasing their boss, managing up, and such. Group size plays a role. C-level distortion fields play a role. The orgs age. etc. Legibility. "Market" feedback loops. It all ads up to an organisation that can take any management tool and make it pathological. A commercial example of resilience to bullshit is a classic factory, that ideal "Firm" we based out economic models on. "The job" of manufacturing objects is legible, can be effectively reduced to component parts, measured and optimised. The feedback loop any significant successes and failures is effective. A young startup with a "lets make it work together and we'll all be rich" vibe can probably use KPIs effectively. There are lots of example, and we intuitively know how this is going to go. I think it's time to look at some microeconomic questions with the reverse of conventional logic. Why does the financial services sector have sop many employees? Not because of the marginal profit value of the least employee. Because of the revenue. A company with $Xbn and a fat profit margin is (often) going to employ lots of people because it can. At this point, all you need is to lower efficiency to achieve the required output.

ElevenLathe 3y ago
The sports team is an interesting case. Many fans (I know the details for MLB, being a fan myself, but the same is true of other sports) feel, essentially, that teams have optimized the wrong KPI: pressure to win has made them emphasize pitching to the point where there is very nearly a pitching change every inning in most games. Meanwhile offense values home run hitters more than ever. The result is more competitive teams but less entertaining games: much of the drama of the game is close plays on fielded balls, while managers, scouts, players, and back office analysts are doing whatever they can to avoid plays like that. Yes, the team can make the playoffs, but ultimately baseball is an entertainment product -- the goal should be for the games to be fun to watch!

ElevenLathe 3y ago

The sports team is an interesting case. Many fans (I know the details for MLB, being a fan myself, but the same is true of other sports) feel, essentially, that teams have optimized the wrong KPI: pressure to win has made them emphasize pitching to the point where there is very nearly a pitching change every inning in most games. Meanwhile offense values home run hitters more than ever. The result is more competitive teams but less entertaining games: much of the drama of the game is close plays on fielded balls, while managers, scouts, players, and back office analysts are doing whatever they can to avoid plays like that. Yes, the team can make the playoffs, but ultimately baseball is an entertainment product -- the goal should be for the games to be fun to watch!