The distribution center example is lethal. Watching metrics replace objectives in real time, across a whole operation—that's how good incentives quietly break everything. We saw it play out in spades during the covid years. Glad to see someone articulate it this clearly, especially with skin in the game from actually living it.
Great one TES. This is a little off topic, but here goes: can a guitar player change the sound of the guitar over time based on his playing technique? Willie Nelson would be an example of how this might be possible.
Personal experience with Goodhart's Law: I worked for a Fortune 100 Company as on on-site tech doing maintenance for a customer leasing our equipment. As a good employee I tried to maximize customer satisfaction and my company profits at the same time, so I became quite proficient not only at having low spare parts inventory, but also low custom machine down time, as well as low parts usage. Apparently I did my job too well and eventually got a nasty-gram email saying that even though I had low parts inventory on hand, my parts usage figure was still too low for the size of my inventory. I explained to my manager that I needed the parts on hand in order to keep customer down time low -- but that I COULD make the spare parts inventory turnover time look better by needlessly using more parts. Of course that would cut into company profits, it would not increase customer satisfaction, and it would not decrease my already low inventory, but it would indeed make my metrics appear better on paper. Did she still want me to needlessly use up more spare parts? "Yes. We just need to make the numbers better." So I did. It was a pointless expense to my company and produced no real benefit to anyone (not even me), but the numbers looked good.
Thanks for your excellent post. As a believer in Christ I think God cannot be put in a box, He cannot be measured and quantified and we are but putty in His wonderful hands. In short God is in charge.
Yes, I have long extended the aphorism 'if you can't measure it, you can't manage it', to 'if you can measure it, you can manipulate it'. And they do, everyday in everyway, as you know.
Excellent piece and points made.👏👏👏👏 I hope many understand it, because the world we live in has devolved to "one metric to rule them all" mentality and the ability to recognise and demand quality has skipped entire generations.
Art pursues beauty, beauty leads to love and love arrives at truth. You would have been more content building guitars. You're young. There's still time.
"much of the analytical heavy lifting is often performed quietly within the exclusion criteria"
Yes. Too many people read abstracts and never think to look at methods sections for such things. There are outliers in the real world that never occur in most studies.
Your writing usually peaks above my comprehension level, at times. I'm not an engineer and have no impressive degrees, but the facility analysis and the the wooden guitars brought everything home to me. I spent 40 years in transportation and distribution doing all kinds of cost and productivity analyses. Incentives often explain so many issues.
I also have a special love for craftsmanship, whatever the speciality, but especially wooden instruments.
The distribution center example is lethal. Watching metrics replace objectives in real time, across a whole operation—that's how good incentives quietly break everything. We saw it play out in spades during the covid years. Glad to see someone articulate it this clearly, especially with skin in the game from actually living it.
Great one TES. This is a little off topic, but here goes: can a guitar player change the sound of the guitar over time based on his playing technique? Willie Nelson would be an example of how this might be possible.
Personal experience with Goodhart's Law: I worked for a Fortune 100 Company as on on-site tech doing maintenance for a customer leasing our equipment. As a good employee I tried to maximize customer satisfaction and my company profits at the same time, so I became quite proficient not only at having low spare parts inventory, but also low custom machine down time, as well as low parts usage. Apparently I did my job too well and eventually got a nasty-gram email saying that even though I had low parts inventory on hand, my parts usage figure was still too low for the size of my inventory. I explained to my manager that I needed the parts on hand in order to keep customer down time low -- but that I COULD make the spare parts inventory turnover time look better by needlessly using more parts. Of course that would cut into company profits, it would not increase customer satisfaction, and it would not decrease my already low inventory, but it would indeed make my metrics appear better on paper. Did she still want me to needlessly use up more spare parts? "Yes. We just need to make the numbers better." So I did. It was a pointless expense to my company and produced no real benefit to anyone (not even me), but the numbers looked good.
Like it but I'm sure Jack White would beg to differ on your guitar analogy.
Thanks for your excellent post. As a believer in Christ I think God cannot be put in a box, He cannot be measured and quantified and we are but putty in His wonderful hands. In short God is in charge.
Great article as usual!
"... I adopted what I regarded as the proper null hypothesis: that my own engineering contained a defect.."
If you believed your own engineering had a defect and started from there, that`s a hypothesis.
You are way smarter than me so how is a feasible hypothesis...a null hypothesis?
But, but, but....muh KPIs!
Yes, I have long extended the aphorism 'if you can't measure it, you can't manage it', to 'if you can measure it, you can manipulate it'. And they do, everyday in everyway, as you know.
Very beautiful.
Excellent piece and points made.👏👏👏👏 I hope many understand it, because the world we live in has devolved to "one metric to rule them all" mentality and the ability to recognise and demand quality has skipped entire generations.
Art pursues beauty, beauty leads to love and love arrives at truth. You would have been more content building guitars. You're young. There's still time.
"much of the analytical heavy lifting is often performed quietly within the exclusion criteria"
Yes. Too many people read abstracts and never think to look at methods sections for such things. There are outliers in the real world that never occur in most studies.
Your writing usually peaks above my comprehension level, at times. I'm not an engineer and have no impressive degrees, but the facility analysis and the the wooden guitars brought everything home to me. I spent 40 years in transportation and distribution doing all kinds of cost and productivity analyses. Incentives often explain so many issues.
I also have a special love for craftsmanship, whatever the speciality, but especially wooden instruments.
Great piece. Wonderfully written!
Thank you!
You had me at, large U.S. off priced retail brand.