Goodhart's Law

When a measure becomes a target, it ceases to be a good measure. The moment you incentivize people to hit a specific metric, they optimize for the metric rather than the underlying goal the metric was supposed to represent. Call centers targeted on call duration have shorter calls but worse service. Schools targeted on test scores teach to the test rather than educating. The metric gets gamed while the actual objective is neglected.

When to use it

When designing any performance metric or incentive system. When a metric is improving but the underlying reality isn't. When people are gaming a system. When 'teaching to the test' dynamics emerge.

How it can help

The most important warning for anyone designing incentive systems, KPIs, or performance metrics. Explains why so many well-intentioned measurement systems produce perverse outcomes. The antidote: use multiple metrics, rotate them, and measure outcomes not just outputs.