When it comes to systems the goals we choose greatly affect the outcomes that are obtained. This is particularly true when it comes to the goals of feedback processes those used for correcting or reinforcing behaviors. When these goals are ill defined, the system will faithfully continue to produce a result, however, it may not be the one intended or wanted.
Donella H. Meadows, in her book "Thinking in Systems" provides an illustrative example:
The Goal of Sailboat Design
Once upon a time, people raced sailboats not for millions of dollars or for national glory, but just for the fun of it.
They raced the boats they already had for normal purposes, boats that were designed for fishing, or transporting goods, or sailing around on weekends.
It quickly was observed that races are more interesting if the competitors are roughly equal in speed and maneuverability. So rules evolved, that defined various classes of boat by length, and sail area and other parameters, and that restricted races to competitors of the same class.
Soon boats were designed not for normal sailing, but for winning races within the categories defined by the rules. They squeezed the last possible burst of speed out of a square inch of sail, or the lightest possible load out of a standard-sized rudder. These boats were strange-looking and strange-handling, not at all the sort of boat you would want to take out fishing or for a Sunday sail. As the races became more serious, the rules became stricter and the boat designs more bizarre.
Now racing sailboats were extremely fast, highly responsive, and nearly unseaworthy. They need athletic and expert crews to manage them. No one would think of using an America's Cup yacht for any purpose other than racing within the rules. The boats are so optimized around the present rules that they have lost all resilience. Any change in the rules would render them useless.
Meadows suggests a way out of the trap of seeking the wrong goal:
"Specify indicators and goals that reflect the real welfare of the system. Be careful not to confuse effort with result or you will end up with a system that is producing effort, not result."
These principles are not new, although they are easily forgotten and something we must always be reminded of.
This can be seen by the number of companies that define their indicators and goals mostly by counting the things they are doing (i.e. measures of effort) without evaluating the effects of these efforts (i.e. measures of effectiveness). Many companies have created policies to optimize the production of numbers which when it comes to compliance looks something like this:
The number of compliance issues open
The number of hours of training per employee
The number of internal audits completed on-time
The percentage of outstanding post-audit issues
The number of complaints
And so on.
As a result, companies have become experts (or now require hiring them) to support the business of auditing rather than the business of meeting obligations. They have created the equivalent of an America's Cup yacht optimized for one purpose - winning the audit game within the rules they have created.
The compliance function is now so optimized around passing audits that it is unable to adapt to changes in regulations from prescriptive to performance and outcome-based designs. Compliance has created a high-performing yacht to win a race, but not the race that now matters.