First Principles First

Why measuring effort instead of impact guarantees incentive misalignment

The earlier you measure in the chain from effort to impact, the easier it becomes to game the metric. Lines of code, pull requests, or hours worked are observable and easy to count—but also trivially manipulable. Impact and profitability are harder to attribute and distort, but require waiting longer to observe. Choose your measurement point deliberately: superficial analysis often reveals flaws without requiring systems thinking.

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Questions this essay answers

  • Why do metrics like lines of code or hours worked incentivize destructive behavior?
  • How do I choose what to measure to align incentives with actual value delivery?
  • When is simple analysis enough instead of full systems thinking?
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