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“When a measure becomes a target, it ceases to be a good measure.”
This is Goodhart’s law.
How did Steve Jobs and Apple avoid this pitfall to reach a $2T market cap today?
Better metrics = better results.
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This is Goodhart’s law.
How did Steve Jobs and Apple avoid this pitfall to reach a $2T market cap today?
Better metrics = better results.
Thread
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Steve Jobs created an environment at Apple that focused on creating the best products possible.
To do this, he used incentives wisely:
“Incentive structures work…So you have to be very careful of what you incent people to do, because various incentive structures create...
To do this, he used incentives wisely:
“Incentive structures work…So you have to be very careful of what you incent people to do, because various incentive structures create...
...all sorts of consequences that you can’t anticipate.”
Jobs emphasized focus.
To be the best, make the best.
As Jobs would say: “make them beautiful”
@sama echoes Jobs’s:
“It really is true that the company will build whatever the CEO decides to measure.”
Jobs emphasized focus.
To be the best, make the best.
As Jobs would say: “make them beautiful”
@sama echoes Jobs’s:
“It really is true that the company will build whatever the CEO decides to measure.”
As a result, Jobs and Apple were able to revolutionize the market on multiple fronts.
Meanwhile, their competitors were “all over the map”
But why does this matter?
Because metrics can have a drastic impact on behavior.
Meanwhile, their competitors were “all over the map”
But why does this matter?
Because metrics can have a drastic impact on behavior.
When data is collected, people will refine their behaviors to optimize for those data points.
As soon as the behavior changes, those data points are no longer valuable as a measure.
As soon as the behavior changes, those data points are no longer valuable as a measure.
An example of this is @tiktok_us .
As creators go viral, their social worth and clout skyrockets
This lead creators to scrutinize the algorithm to game the metrics
Soon likes and shares were being bought
TikTok was forced to change the algo to more sophisticated metrics.
As creators go viral, their social worth and clout skyrockets
This lead creators to scrutinize the algorithm to game the metrics
Soon likes and shares were being bought
TikTok was forced to change the algo to more sophisticated metrics.
Examples of Goodhart& #39;s Law can be found across all fields, including academics, healthcare, and business.
The education system is a perfect example: https://twitter.com/FarzaTV/status/1220410476661739521">https://twitter.com/FarzaTV/s...
The education system is a perfect example: https://twitter.com/FarzaTV/status/1220410476661739521">https://twitter.com/FarzaTV/s...
Hospitals and healthcare facilities often fall prey to similar problems.
Here is a perfect example: https://twitter.com/mancunianmedic/status/1262984559441989633">https://twitter.com/mancunian...
Here is a perfect example: https://twitter.com/mancunianmedic/status/1262984559441989633">https://twitter.com/mancunian...
The solution is not to create more metrics.
Instead, it is to align incentives and metrics according to the end goal.
From saving lives to educating students, the telos or end of each endeavour must be considered.
As @simonsinek writes:
"To succeed in the Infinite Game...
Instead, it is to align incentives and metrics according to the end goal.
From saving lives to educating students, the telos or end of each endeavour must be considered.
As @simonsinek writes:
"To succeed in the Infinite Game...
...of business, we have to stop thinking about who wins or who’s the best and start thinking about how to build organizations that are strong enough and healthy enough to stay in the game for many generations to come.”
If you enjoyed this thread and want a humourous example of Goodhart& #39;s Law, check out this short clip from I Love Lucy.
And remember DO NOT follow or like any posts! https://www.youtube.com/watch?v=NkQ58I53mjk">https://www.youtube.com/watch...
And remember DO NOT follow or like any posts! https://www.youtube.com/watch?v=NkQ58I53mjk">https://www.youtube.com/watch...
