🤔 When "SMART" goals are stupid

What do a Soviet nail factory, a cobra problem, and the current spate of populism have in common?

They are all victims of Goodhart's Law.

Many are familiar with SMART goals, the idea that goals should be specific, measurable, achievable, relevant, and time constrained.

But far fewer people are familiar with Goodhart's Law - the idea that “when a measure becomes a target it ceases to be a good measure”.

• A Soviet factory given a target to make more nails famously produced tiny, useless, nails as they were quicker and less resource-intense.

• The government wanted to reduce the number of cobras, so they set a reward for dead cobras. This led to people breeding cobras.

• A politician’s success measured by approval ratings is likely to drive policy for popularity rather than for positive impact (trans athletes, anybody?).

  
  

There are loads of examples of Goodhart’s Law. From the focus on exam results negatively affecting education, to hospitals turning away the sickest patients in order to retain their quality of care ratings.

I’m writing about Goodhart’s law this week for two reasons:

Firstly, earlier this week I had a conversation with a client about setting KPIs for his team and I warned him off them at this stage. In the last 18 months I’ve helped this client grow from a $20k per year solopreneur agency to a $800,000+ per year agency with employees.

He wanted to set KPIs to negate the effects of his weakest employees (who keep asking for KPIs), when instead he should focus on helping his strongest employees push further (who don’t seem to need the KPIs at all).

KPIs can be useful, but they often force people to focus on the number rather than the intention behind the action (we discussed Goodhart’s Law), and the bureaucracy slows the strongest team members.

My client instinctively knows which employees are strongest, and we do have data to back it up. We don’t need to introduce bureaucracy with company-wide KPIs right now, we have more pressing priorities. The order you do things is super important.

The second reason I’ve mentioned Goodhart’s law is because we have all just passed the halfway point in the year.

Most people will have set outcome-based goals for the year (I recommend process-based goals instead), and now is a good time to revisit those goals.

• Was the measure you used right? How could the measure be improved?

• If you didn’t make good progress in the first half of the year, what are you going to do differently to make sure you achieve your goals in the second half of the year?

  
  

People promote SMART goals as though they are the solution to lagging achievement. But not everything needs to be measured. In fact, measuring can be negative.

SMART goals can be great, but SMART goals can also be stupid.

Restrict measurement to things that are only absolutely necessary, and focus more on the meaning behind the action. Think not what you want to achieve, but who you want to be.

Goodhart’s law

This point came from my newsletter Work Smart Wednesday, if you would like to read the other related points I made in that email you can find it here: https://worksmartwednesday.substack.com/p/work-smart-wednesday-july-2-2025

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