Signals

Which signals matter?

How do you know if you’re doing a good job?

At work, in the gym, with your finances, with your new year’s resolutions?

The most robust way is to depend on measurements and data: these are signals from the world to tell you if you’re moving towards your goal, or away from it.

Signals have different strengths: some can be very precise (like your weight on the scales) - strong signals. Others are imprecise (like your appearance in photos) - weak signals.

But signals also have different usefulness. Some signals predict the future, others tell you about the past. These are often called leading and lagging indicators.

Leading indicators are easy to measure today, can be improved in the short-term, and predict how you are performing against your ultimate goal. Lagging indicators are harder to measure and even harder to change, but give you a true indicator of where you’re at today. So, if you’re learning to play the guitar, the leading indicator might be the number of chords you know. The lagging indicator is the level of fluency with which you can play a song.

And finally, there are input signals and output signals. You can measure what you put into an objective, like the number of times you go to the gym in a week. That’s within your control. Output signals are the results you get from that input - your body fat percentage, or size of your biceps. You can’t control it, you can only measure it.

The challenge is that input signals might not correlate with output signals. This comes up a lot in personal finances - people will put £10 a week into a savings account (an input signal), yet still end the month broke (an output signal). Why? Because the input signal isn’t actually affecting the output. Unless you actually reduce your weekly spending, moving the money into a savings account does not help you save money.

Where am I going with this?

Stop the boats, start the growth, halve inflation, heal the nation (etc)

Rishi Sunak did something bold as PM: he set out 5 quantifiable promises that he would hold himself accountable to.

He said he would:

• Halve inflation

• Grow the economy

• Reduce debt

• Cut NHS waiting lists

• Stop the boats

These are credible, quantifiable signals of success (regardless of whether you agree with the ambition for the country they represent).

You can’t hide behind rhetoric or PR wizardry to claim you cut NHS waiting lists, for example, if you don’t.

They are strong signals, lagging indicators and output-based metrics. He’s not promising to hire more doctors (input), or beef up the borders (weak), or create more jobs (leading). These are proper signals.

It’s pretty rare that a Prime Minister puts forward pledges like this.

It’s like a maths test against an arts test. In maths, there is only one right answer - in art, more or less anything goes. Most PMs prefer the latter: when it comes time to mark the homework, they can say that’s what they meant to do all along.

But for Rishi, who after all we know loves maths, if his numbers ain’t right, there’s no escaping a red X.

And that was his fate: he didn’t stop the boats, he didn’t grow the economy, he didn’t reduce debt, he didn’t cut waiting lists. And he was reminded of it, again and again, through the campaign.

So why would he back himself into a corner with promises like that?

Rishi is not used to performing for the public. He’s used to performing for money men and tech bros, who care a lot more about these number-based, hit or miss targets that leave nowhere to hide.

And he didn’t just back himself into a corner. Starmer had to respond with promises of his own.

The missions, pledges, pillars, foundations and steps

Starmer’s campaign style is best described as “lob at the wall and see what sticks”. It’s not great for clarity, but you can’t deny it has something for everyone.

Before the election, Labour set out five ‘missions’. Later, they introduced three ‘foundations’ that they would prioritise if they entered government. During the election campaign, they announced their six ‘steps’. And finally, on entering government, they announced their six ‘milestones’.

Some of these pledges leave no room to hide - they are output, lagging, strong signals:

• Halving serious violent crime

• The fastest growth in the G7

Others are input, leading indicators - but still strong signals:

• Recruit 6,500 new teachers

• 40,000 more [medical] appointments each week

• 1.5 million homes

Some are weak input signals - there’s no clear sense they will actually drive change:

• Launch a new Border Security Command

• Set up Great British Energy

And then some are just BS - impossible to measure, and can be waved away with some clever PR or new way of dicing the data:

• Crack down on antisocial behaviour

• Deliver economic stability

• Secure, home-grown energy

With so many missions, pledges and pillars, Starmer has not just a lot to do - but a lot to remember.

And those output-based, lagging indicators are the most dangerous. We learned that from Sunak, and we are seeing it again this week from Rachel Reeves: the economy’s growth prospects have been cut. No amount of input from the government

Politics has always been about finding the numbers to support the argument, and making promises that are wishy-washy enough to squirm your way into showing you hit them come reelection time. But there’s been a change that seems to have come since Rishi Sunak. PMs are more accountable than ever to real, meaningful metrics.

It means a harder time for them - but perhaps it’s better for voters to go into the polling station with their eyes open.

Meanwhile, Signal in the US

Trump has not quite reached the sophistication of measuring leading and lagging indicators of national growth. He should be focused, right now, on just one signal: don’t cause a national security breach by adding randoms to your group chats about military operations.