Full Title: Goodhart’s Law Isn’t as Useful as You Might Think
Category: #articles
Summary: The text discusses how Amazon’s Weekly Business Review (WBR) process addresses Goodhart’s Law, which states that when a measure becomes a target, it ceases to be a good measure. Amazon focuses on controllable input metrics and output metrics to drive desirable outcomes. The WBR process involves continuous refinement of metrics through trial and error to ensure they are effective in achieving business goals. The text also highlights the role of Finance in certifying data and investigating metrics presented during the WBR to prevent manipulation. Overall, the WBR process at Amazon serves as a mechanism for leadership to synchronize and build a causal model of the business, aiming to avoid Goodhart’s Law-type situations.