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Measurement, signals, and sense

How we know what's happening in a system - and how measurement itself changes what happens.

What you measure changes what people do. This is Goodhart’s Law, and it’s the most important idea in performance management: when a measure becomes a target, it stops being a good measure.

But the problem goes deeper than gaming metrics. Most organisations are drowning in lagging indicators (what already happened) and starving for leading indicators (what’s about to happen). They confuse signal with noise. They miss weak signals that turn out to matter enormously. They create feedback starvation by building hierarchies where bad news can’t travel upward.

These concepts are about seeing more clearly. Not by adding more dashboards, but by understanding what measurement does to a system and how to design for the information you need rather than the information that’s easy to collect.

9 concepts

Feedback Starvation
When a system lacks the information it needs to self-correct - common in hierarchies where bad news doesn't travel upward
Goodhart's Law
When a measure becomes a target, it ceases to be a good measure
Leading vs Lagging Indicators
Lagging indicators tell you what happened. Leading indicators tell you what's coming. Most people only track the first kind
Observer Effect
The act of measuring or watching a system changes how the system behaves
Perverse Incentives
Incentive structures that reward the opposite of what you intended - the cobra effect
Proxy Measures
Using something measurable as a stand-in for something that isn't - useful until people start gaming the proxy
Signal vs Noise
The challenge of distinguishing meaningful information from random variation - most of what looks like signal is noise
Surrogate Measures
When you can't measure what matters, you measure what you can - and then forget the difference
Weak Signals
Early, ambiguous indicators of emerging change - easy to dismiss, potentially critical