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Comment by joe-collins | Hacker News Reader

This is, I think, a good contrast to the "management by metrics" article currently sharing the front page. Attempting to govern through massive data or singular narrow measures each seen like folly. A broad, even vague, "directionally correct" measure is an excellent tool for keeping an enterprise aligned.

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I’ve been thinking about this since I started working at a metrics driven company.

One thing we often lose sight of is that metrics are coarse grained. Something like GDP for example is very good at telling you that the USA is a better place to live than Somalia. But it fails for more fine grained comparisons. We should refrain from doing micro optimizations on coarse grained metrics or ranking people on its basis unless the change is truly massive and validated.

Metrics also need counter metrics. For GDP growth it maybe things like inequality, pollution, stress levels and so on.

Metrics also need to continuously evolve as people understand their limitations.

Metrics are a tool of social coordination and one of the most powerful ones to exist.

My personal opinion is that metrics should be largely invisible, only becoming visible at the level of management where decisions are made. Anything else leads to exactly what you just said: misguided micro-optimizations and gamesmanship.

GDP is an excellent example, I think. Basically, it measures the total flow of wealth inside a country. If everyone behaves rationally this is a good proxy for wealth as a whole. But what happens if the government would setup a group of companies that trade immaterial or trivial products amongst each other at absurd prices? The faster that group trades, the higher the GDP. A metric has become a goal.

One issue with GDP: how do you define wealth? It's hard to incorporate more abstract assets like social trust or environmental conditions (latter can have direct impacts on things like tourism)

I think this might count as a "checklist" rather than a "metric", and crucially there aren't quite the same incentives to game the metric.

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