A measure with consequences attached will be optimised
Goodhart’s observation holds without exception. The question is not whether a KPI will be gamed but whether the gaming does damage.
Data Core · Object
KPI management
Choosing the few measures the organisation is actually run on, defining them so two people would agree, setting what good looks like, and reviewing them honestly.
The term
What it is
A measure becomes a KPI when decisions are actually taken on it. Everything else is reporting, and confusing the two is why organisations have forty indicators and no clarity.
The number that matters most is how few there are. Attention is the scarce resource, and a dashboard of thirty measures distributes it evenly across things of wildly different importance.
Every measure that carries consequence is gamed. That is not a reason to avoid measurement; it is a reason to choose measures whose gaming is either harmless or visible.
Why it earns a place
What goes wrong without it
Definition disagreements are the silent problem
Two teams reporting the same measure differently produces an argument about reality rather than about performance, and it recurs every period.
Leading indicators are what allow a response
Lagging measures tell you what happened. Only leading ones arrive early enough to change it, and they are harder to choose.
One level in
The modules within kpi management
Four working areas. The first narrows what is measured, the second makes it unambiguous, the third says what good is, and the fourth is where measurement either changes something or does not.
Choosing what to measure
Narrowing to the few measures the organisation is actually run on, balanced across what matters rather than across what is easy to collect.
LearnDefinitions
What each measure means precisely enough that two people calculating it independently get the same answer. The unglamorous half that makes the rest possible.
LearnTargets and thresholds
What good looks like, at what level, and what happens when the reading crosses it. A measure with no threshold produces observation rather than action.
LearnThe review
The rhythm in which measures are actually read and something is decided. Where the review is presentation rather than decision, the whole measurement effort is decorative.
Learn
Across the framework
What it touches
- Goal CoreA KPI without a goal behind it is a number; a goal without a measure is an intention.
- Data CollectionA measure that cannot be collected reliably is not a measure, whatever the definition says.
- Business CoreMost operational KPIs are process measures, and they belong to whoever owns the process.
- Time CoreThe review rhythm has to sit inside the organisation’s existing cycle rather than beside it.
Beyond the framework
Models worth knowing here
The Omnigoal says where this belongs and what it touches. It does not tell you how to think about it — other people have done that, and done it well. These are theirs.
The balanced scorecard
Robert S. Kaplan & David P. Norton · 1992Also known as Strategy maps
Measure across four perspectives at once, so financial results are read alongside what produces them.
Financial, customer, internal process, and learning and growth. The design argument is causal rather than decorative: the last three are the leading indicators of the first, and a company reading only financial results is steering by an outcome that reports on decisions taken a year ago.
- Reach for it when
- When a measurement set is entirely financial, or when a KPI list has grown without anyone asking what causes what.
- Where it stops
- It is heavy, and organisations tend to keep the four boxes and drop the causal links between them — at which point it is a longer report rather than a better one.
Robert S. Kaplan & David P. Norton, “The Balanced Scorecard — Measures That Drive Performance”, Harvard Business Review, 1992.
Goodhart’s law
Charles Goodhart; this formulation by Marilyn Strathern · 1975When a measure becomes a target, it stops being a good measure.
Originally an observation about monetary policy, generalised since to any managed indicator. The mechanism is not dishonesty: a measure is a proxy for something you care about, and optimising the proxy will eventually pull it away from the thing it stood for, whether or not anyone intends it.
- Reach for it when
- Before attaching consequences to any indicator, and whenever a metric has improved dramatically while the outcome behind it has not.
- Where it stops
- It is a warning, not a method. It does not say which measures will corrupt or how to prevent it — only that they will, and that unmeasured judgement remains necessary.
Charles A. E. Goodhart, 1975; this wording from Marilyn Strathern, “Improving Ratings”, European Review, 1997.
These are other people’s models, named here so you can go to the source and use them properly. The Omnigoal is not affiliated with their authors and is not endorsed by them; nothing of theirs is reproduced here — no canvas, no diagram, no wording. Each is described in our own words, with the originator credited, because the framework is a place to put thinking, not a replacement for the people who did it. Model names and trademarks belong to their respective owners and are used here only to refer to the work itself.
Every model in the framework, and where each one belongsCount how many measures a decision has actually been taken on this year. That is your real number of KPIs.
The other objects in the Data Core
Data Collection
Ensure accurate and consistent data collection across all business operations. Systematically gathering data from various sources provides comprehensive insights that inform decision-making and strategic planning.
LearnPerformance Analysis
Analyse data to assess the performance of different business areas against set KPIs. Using analytical tools to interpret data helps identify trends and insights that drive continuous improvement and strategic adjustments.
LearnReporting
Generate detailed reports to communicate performance metrics to stakeholders. These reports should provide a clear overview of business performance, facilitating informed decision-making and ensuring transparency.
LearnData Governance
Establish policies and procedures for data management, ensuring data quality, security, and compliance. Robust governance frameworks safeguard data integrity and adhere to regulatory standards.
Learn