Higher Performance Insights | Confusing Ends with Means
In the spring of 1902, Hanoi, Vietnam, stood on the precipice of its first bubonic plague outbreak. In the preceding years, French colonial efforts had focused on urban modernization, epitomized by the construction of nine miles of sewage infrastructure intended to equip the city with essential services, such as running water and flushing toilets. [1]
However, despite the robust construction, the sewers' warm and damp environment unintentionally provided an ideal habitat for plague-carrying rodents. Before long, rats began to infest the streets, inundating Hanoi with unprecedented levels of disease.
The solution? A bounty. A price per tail to turn citizens into rat hunters. Initially, the initiative to control the rat population saw a surge of tails delivered in hundreds, eventually escalating to thousands. The record peaked at a staggering 20,112 tails in a single day, marking the scheme as a resounding success.
It worked—until it didn't.
The success was marred by a dark secret. Increasing observations of tailless rats roaming Hanoi revealed a fraudulent practice among the rat catchers. They were not exterminating the rats as intended but severing their tails and releasing them, allowing them to breed further. Some even smuggled rats into the city or bred them to claim larger rewards.
Consequently, the French authorities ended the bounty program, which later became a textbook example of Goodhart's Law. Named after economist Charles Goodhart, the law articulates that once a measure becomes a target, it loses its effectiveness as a measure. [2]
The Hanoi story is a narrative that echoes in our daily lives. Consider the pandemic-era adventure Ms. Becky (my wife) and I embarked upon a simple 10,000-step challenge. It started as a wellness quest, but we're both wired to win. Soon, those steps weren't just steps; they were the success scorecard of the day. Miss a few, and there we'd be, circling the kitchen island, scaling the stairs of our home long past bedtime. We turned the joy of walking into a task to beat. We confused the ends for the means.
Metrics should serve us, not the other way around.
Team Discussion Question
In what ways might your current performance metrics unintentionally incentivize undesirable outcomes, and how can you reassess your measurement systems to align more closely with your core values and long-term objectives?
Footnotes
[1] Thanks to Richard Shotton for introducing me to The Great Hanoi Rat Massacre of 1902 in his book, The Choice Factory: 25 Behavioral Biases that Influence What We Buy.
[2] The Great Hanoi Rat Massacre is also an example of the cobra effect, depending on its use.
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