Metric
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The JC sounds off on Management
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When everything about a people is for the time growing weak and ineffective, it begins to talk about efficiency. ... Vigorous organisms talk not about their processes, but their aims.
- — G. K. Chesterton, Heretics
“When a measure becomes a target, it ceases to be a good measure.”
The stock-in-trade of a middle manager and the management consultant she aspires to become.
Like a key performance indicator, a second-order derivative of actual performance calculated to allow non-experts to make cavalier management decisions, usually to reduce expenditure on — aka make redundant — the person performing that function.
To be contrasted with the ineffable, inarticulable skills that are provided by a subject matter expert.
Goodhart’s law
An excellent page of resources on Goodhart’s law to be found here.
- Regressive: using a single metric as a proxy to measure a phenomenon that is actually multivariate — caused by several factors. Here Simpson ’s paradox is not your friend.
- Extremal: Where a the metric is a useful indicator under normal circumstances — Mediocristan, but breaks down in extremes or unusual cases — Extremistan. Paging Messrs Black and Scholes. You know, using normal distributions of independent events to model dependent events, like human behaviour of the market.
- Causal: the old correlation is not the same as causation chestnut.
- Adversarial: Substitute targeting the desired outcome — a senior tranche in a portfolio of mortgages that will not default in any circumstances — with one that is rated AAA. Hello, global financial crisis.