In his newest column, Charkin applies the principle that when a metric becomes a target, it ceases to be a good measure to today’s publishing industry.

 

By Richard Charkin | @RCharkin

The Frankfurt Book Fair was this year, as ever, a whirl of faces, deals, missed appointments, sausages, outrageous hotel prices and the eternal and unanswerable question: ‘How’s your Fair going?’ The only honest response is a smile and a ‘comme ci comme ça’ shrug of the shoulders? It is impossible to encapsulate everything that has happened or will happen in one word or one sentence. It all depends on what you measure and how.

These thoughts led me to revisit Goodhart’s Law; ‘When a measure becomes a target, it ceases to be a good measure.’ Originally applied to monetary policy, this principle has profound implications across industries, including publishing. When organizations fixate on hitting specific metrics, they often inadvertently undermine the very outcomes those metrics were designed to track.

Here are a few examples of the Law in publishing practice.

Gross profit is an important measure of the success or otherwise of a pricing decision. Publishing management frequently demands that individual books achieve a certain level to support an acquisition or a pricing decision – this might be a 55 or 60% target. At an acquisition meeting the sponsoring editor will be asked to produce numbers to support the logic of commissioning a title. Of course, the more a book sells the more likely is to reach or exceed percentage. It is thus no surprise that nearly all acquisition calculations over-estimate sales.

When a book is primed for publication the retail price needs to be agreed. Clearly increasing the initial print run will reduce unit costs and enhance gross profit. This, of course, leads to the temptation to over-print in turn generating stock provisions, wasting, and remaindering in later years. A perfect example of a legitimate measure becoming counterproductive once it becomes a target.

Another measure of the resilience of a publishing company is the diversity and spread of its customer base – the broader the better in order to reduce dependency on a single client. One such measure would be to set targets to reduce the percentage of total sales generated by the single largest retailer. There are two ways of achieving this – increasing the sales of all other customers or doing less well with the leading one. The latter is much more easily achieved than the former but does nothing for the health of the business.

In some areas of publishing, notably open-access journals and scholarly monographs, editors are targeted (and often bonused) on the number of titles or articles commissioned. The inevitable consequence has been a decline in overall quality of what is being published.

Or the legitimate desire to have a more diverse workforce and to audit progress by categorizing staff by ethnicity, social background, gender, or sexual orientation, setting targets and publishing the results. There are many such audits published in our trade press and much debate about the success or failure to achieve targets. While transparency and accountability matter, rigid numerical targets can incentivize box-ticking over genuine cultural change. Hiring decisions may prioritize meeting quotas rather than building truly inclusive environments where diverse talent thrives. The numbers improve while meaningful progress stalls.

Corporate (or indeed national governmental) set targets for growth which may lead to irrational acquisitions and value depletion. The pressure to hit growth numbers can lead to ill-conceived acquisitions that destroy shareholder value, unsustainable expansion that strains resources, or short-term thinking that sacrifices long-term health. The growth target is met; the organization weakens.

I could go on. There are so many more examples. The thing is that human ingenuity is so powerful that it can find ways to achieve any target while at the same time damaging other equally important measures. The solution isn’t to abandon measurement, but to embrace complexity and context.

Rather than isolated KPIs, use balanced scorecards that capture multiple aspects of organizational health simultaneously. A gross profit target paired with inventory turnover requirements, for instance, prevents the overprinting trap.

Not everything that matters can be counted. Author loyalty, editorial reputation, and organizational culture resist quantification but remain crucial to publishing success.

Sometimes old-fashioned measures—profit, cash generation, author retention—prove more robust precisely because they’re harder to game without genuinely improving performance. In short, let’s get back to the basics of sound economics and genuinely good publishing judgment.

For past columns in Publishing Perspectives, click here. Richard Charkin’s opinions are his own and not necessarily reflective of those of Publishing Perspectives.