🏢WorkLife Wednesday: Goodhart's Law

Welcome to WorkLife Wednesday, where we take a look into best-practice leadership methods to make your WorkLife awesome.

Good morning. I was once part of a team whose goal was to recruit new members to expand the organization. We had found success in the prior quarter, recruiting 30 new members who understood the team’s mission and possessed the necessary skills for their job functions. However, this quarter brought a new manager who was gung-ho about surpassing that achievement. 'We must get 60 new members this quarter; that’s our target!' he demanded.

We bought in. Doubling last quarter’s achievement was a challenge our recruitment team was eager to be a part of. What we didn’t anticipate was the compromise in the vetting process for new members. To meet our target of doubling the previous quarter’s recruitment numbers, we hastily hired individuals who were not fully qualified, prioritizing speed over thoroughness. The team valued quantity over quality.

This is an example of Goodhart’s Law: when a measure becomes a target, it ceases to be a good measure.

Picture this: A manager at a nail factory set a production target for large quantity of nails. The workers, in response, produced a massive quantity of tiny, unsellable nails. When the target was changed to the weight of nails produced, they produced a few giant, heavy nails. This example demonstrates how focusing solely on quantitative targets can lead to unintended and counterproductive outcomes.

People tend to “game” a process, achieving targets that indicate good work performance.

🚑Healthcare Example

In the healthcare sector, the implications of Goodhart's Law become particularly stark. The UK’s National Health Service (NHS), under government pressure, implemented time-based targets for patient treatment in emergency departments. The goal was to reduce average waiting times to under four hours, a metric intended to improve patient care and efficiency. However, this well-intentioned target led to a series of unintended and often harmful consequences.

Ambulance Stacking.

One of the most striking examples of the perverse outcomes of these targets is the practice of 'ambulance stacking.' To avoid breaching the four-hour waiting time target, hospitals began delaying the official admission of patients. Ambulances were instructed to wait outside hospitals with patients still inside, effectively pausing the clock on the waiting time. This practice not only distorted the actual waiting times but also compromised patient care, as individuals in need of urgent medical attention were left waiting in ambulances rather than receiving timely treatment in the emergency department.

Triaging and Unnecessary Admissions.

Another consequence was the change in triaging practices. Healthcare professionals, under the pressure of meeting targets, began admitting patients for overnight observation if they could not be treated within the four-hour window. While this allowed hospitals to meet their targets, it led to unnecessary hospital admissions, increased costs, and often did not align with the best interests of the patients. This practice also put additional strain on hospital resources, diverting them from patients who might have needed more critical care.

Rethinking Healthcare Targets.

The focus on meeting specific targets can lead to a culture where the metric becomes the goal, rather than an indicator of quality care. This can result in a healthcare system that prioritizes numbers over patients, where the success of a hospital or a department is measured more by its ability to meet targets than by the quality of care it provides. It can also demoralize healthcare professionals, who entered the field to care for patients, not to meet arbitrary benchmarks.

Goodhart's Law serves as a cautionary tale for businesses and organizations. It reminds us that while metrics and KPIs are invaluable tools for assessment and improvement, they should not be blindly converted into targets. A balanced approach, where the focus remains on the underlying objectives and values, is crucial to avoid the pitfalls of misused metrics. The goal should be to foster a culture that uses information to drive genuine performance improvements, not one that chases numbers at the expense of real progress.

_{Written by Bailey Hepler}

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