learn-okr-with-phoebe / Manager session 3 of 10
Learn OKRs with Phoebe · Manager track · Session 3 of 10

Choosing fair metrics: design for the gaming

Every metric you set will be optimised - that is the point. The question is whether optimising it produces the outcome you wanted, or just a better-looking number. This session turns the fair-metric checklist into a scoring habit, shows how Goodhart's Law breaks metrics tied to reward, and hands you a live Fair-Metric Lab where you grade Cartwheel metrics and watch what happens when you tie them to pay.

🟡 Manager track Managers: middle mgmt · team leads No code · a live lab 45 minutes
0-3 · Recap 3-18 · Goodhart + surrogation 18-42 · The Fair-Metric Lab 42-45 · Q&A
Part 0

From checklist to instinct

In b1 you met the six-point fair-metric checklist and in b2 you wrote objectives and key results. Tonight the two meet: how do you know a key result is one you can fairly grade a team on, rather than one they will quietly game? The answer is a law almost as reliable as gravity - Goodhart's Law - and a habit of scoring every metric before you deploy it. You will end the session having driven a real lab that scores metrics and simulates the gaming for you.

Live - presented in session Self-study - read after class ★ Fair-Metric Lab Sources covered (cited)
★ What you walk out with today A working understanding of Goodhart's Law and surrogation, the reflex of scoring a metric on the checklist before you set it, and hands-on time with the Fair-Metric Lab watching gameable metrics diverge from the outcomes they were meant to stand for.
Part 1 · why metrics break

When a measure becomes a target 6 min live

Goodhart's Law: "When a measure becomes a target, it ceases to be a good measure." A metric works as a quiet signal because it correlates with something you care about. Turn it into a target - especially one tied to reward - and people optimise the metric directly, snapping the correlation. The measure and the goal drift apart. This drift has a name: surrogation.

Make it a rewarded target, and the two pull apart correlated (a quiet signal) measure becomes a rewarded target the measured number the true outcome Surrogation: the metric quietly replaces the goal in people's minds, and they optimise the proxy.
🔍 Click to zoom - Goodhart's Law: the measure and the goal drift apart under reward
LiveThe classics - and why paired metrics resist gaming3 min▶
  • The cobra effect - a bounty on dead cobras bred cobra farms. The metric (cobras handed in) rose; the goal (fewer cobras) reversed.
  • Lines of code - reward it and engineers write more, worse code. AI code generation makes it meaningless entirely.
  • Tickets closed - reward it and agents close-and-reopen and rush customers, while satisfaction quietly falls.
  • The defence: measure as a system. Pair a quantity metric with a quality one (deploys with change-failure rate; tickets closed with CSAT). You cannot juice one without the other catching you. DORA works precisely because its four metrics hold each other honest.
Real world

Design for the gaming before you deploy. Assume any metric you announce will be optimised the laziest way that moves the number. Ask: "what is the cheapest way to make this go up without doing the real work?" If that cheap path exists, either pair the metric or do not grade on it.

Part 2 · the scoring habit

Score every metric before you set it 4 min live

The checklist from b1 becomes a fast score. Rate the metric on outcome-vs-activity, controllability, game-resistance, and holism. A high score means it is fair to grade on; a low score means watch it as context, or pair it, or drop it. The lab below does this scoring in front of you.

Score the four outcome not activity controllable hard to game holistic / balanced High score -> grade on it Middling -> pair it Low score watch as context only, never on a scorecard The lab below scores real Cartwheel metrics on exactly these four, then simulates the gaming.
🔍 Click to zoom - score, then grade / pair / watch
Demo · drive it yourself

The Fair-Metric Lab ★ live scoring + Goodhart simulator

This is a real lab, not a slideshow. Pick a Cartwheel metric and it scores its fairness from the metric's actual attributes. Then flip "tie this metric to individual pay" and watch the deterministic Goodhart simulation: for a gameable metric, the measured number races to target while the true outcome it stood for collapses. For a fair metric, the two stay together even under pressure.

Read the gap The distance between the gold line (what you measure) and the indigo line (the real outcome) is surrogation made visible. A fair metric keeps that gap small even when it is tied to pay. A gameable one blows it wide open - which is the whole argument for keeping OKR scores away from compensation.
Worked example

Turn a gameable metric into a fair one ★ 8 min · do your own

Take a low-scoring metric from the lab and repair it.

Pick a metric that scored low (lines of code, hours logged, tickets closed) and name the cheapest way to game it.

Find the outcome it was really a proxy for (valuable software, real contribution, satisfied customers).

Replace or pair it so gaming the number would require actually doing the work - then re-score.

Real world

Pairing beats policing. You will never out-police a gameable metric; people are creative under reward pressure. The durable fix is structural: pair quantity with quality so the only way to move the number is to do the real thing. That is why "deploys per week" alone is dangerous but "deploys per week with change-failure under 15%" is safe.

Homework

Try it yourself - this week ◐ 30-45 min total

Source material

Sources covered (cited)

Taught from the measurement-integrity canon. This session covers:

✓Goodhart's Law; Campbell's Law (1979); surrogation (Choi, Hecht & Tayler)Parts 1-2 · why metrics break under reward, and how to design against it
◐DORA metrics (dora.dev) as a gaming-resistant systemPart 1 · pairing quantity with quality
Check yourself

Three questions before you go 🎯 ◐ 90 seconds

1 · What does Goodhart's Law predict?

A metric works as a signal because it correlates with what you care about. Make it a rewarded target and people optimise the proxy directly, snapping the correlation - surrogation.

2 · What is the durable defence against a gameable metric?

You cannot out-police creativity under reward pressure. Pairing quantity with quality (deploys + change-failure, tickets + CSAT) makes gaming require doing the real work.

3 · In the lab, a gameable metric tied to pay shows...

That widening gap between measured and true is surrogation made visible, and the core argument for keeping OKR scores decoupled from compensation.

Manager session 3 cheat sheet · pin this

Goodhart's Lawwhen a measure becomes a target, it stops being a good measure.
Surrogationthe metric quietly replaces the goal; people optimise the proxy.
Design for gamingask the cheapest way to move the number without doing the work.
Pair, do not policequantity + quality (deploys + change-failure, tickets + CSAT).
Score before you setoutcome, controllable, game-resistant, holistic - grade / pair / watch.
Systems beat single numbersDORA's four metrics hold each other honest.
The reward trapgameable + tied to pay = the widest surrogation gap. Decouple.
Next sessionb4 - the Cartwheel metric tree: fair OKRs for every function.