Two Beliefs About Organizational Constraints

3 Mar 2021

I am sure the majority of managers in my industry would recognize Goodhart's law:

When a measure becomes a target, it ceases to be a good measure

What surprises me is how often this maxim gets forgotten! Whenever there are discussions about quantifying "How good are our estimates?", "Is our productivity increasing or decreasing?", or "Are our teams happy and healthy?" folks routinely believe that these questions can be targeted for improvement by (more or less) direct measurement.

Management routinely accepts that with humans "by observing something you change its behavior." They understand that the measurement will have some margin for error and believe "it is close enough." And they are probably correct. It is likely that it is close enough.

Once an engineer knows you're monitoring their productivity, and then you set productivity targets their ears start burning. Now they know that their next promotion relies on productivity improvement. They know their favorability within the org relies on productivity remaining the same. And, they know that if their productivity ever goes down they might get fired. And somehow management believes they will still have an honest measurement of productivity?

Managers have to realize that they cannot have their cake and eat it too. I believe this is a constraint when creating a well-functioning organization. If you're interested in quantifying these kinds of things, you can not also talk about "making estimates better" or "increasing productivity" . I truly believe once you do that the game is over, and slowly but surely you will lose the trust of your team.

If that isn't controversial enough for you try this one on for size. Common wisdom for increasing the productivity of your startup is to hire more people—rapid growth! I believe that is incorrect, it is only part of the story, at best.

Hiring people increases your potential capacity—not "real" capacity. Real capacity is how many things you can do at once. Potential capacity is about how many things you can do at once in the future. I think Will Larson illustrates the problems with rapid growth where you are always hiring more people:

Just how challenging this is depends on how quickly you can ramp engineers up to self-sufficient productivity, but if you're doubling every six months and it takes six to twelve months to ramp up, than you can quickly find a scenario in which untrained engineers increasingly outnumber trained engineers, and each trained engineer is devoting much of their time to training a couple of newer engineers.

In any scenario close to the one that Larson describes there is zero question that you've hired more people, and more people are able to do more things. But have you increased productivity, or have you decreased productivity? If you haven't put a considerable amount of effort into making onboarding effective, which is incredibly difficult, the chances are you will experience decreased productivity.

Odds are the executives told you: "Bigger, Better, Faster" and your response was: "Give me cash and I will hire people!" As a manager how are you going to manage this constraint? Eventually, people get trained, but what are you going to do until then, and how will you manage expectations with executive leadership?