Resist proxies
How attempts to decipher, distill, or demystify feedback unintentionally mislead
As a product gets traction, capital is raised, money starts coming in, and the team size expands, doing it all with the small founding team becomes impossible. It's necessary to divide and conquer. Generalist builders give way to specialists in marketing, sales, design, engineering, operations, and admin. The founder builds out an executive team and additional layers of directors to delegate responsibilities.
When done skillfully, based on real need (when you actually need that head of sales, vs. feeling like you should have one), the right people with the right management processes and communications channels can be transformational. When you time it right, that new head of marketing can be evolutionary for a business.
But the complexity of additional process adds overhead and coordination cost. More noise. Even communicating alone has significant cost. As the org chart stretches vertically, the CEO is abstracted away from the ground-level details.
Some of this abstraction is necessary to unhitch the company from requiring the direct, microscopic attention from its founder to succeed. With no layers of delegation, the org is shackled by the need for CEO attention on every bit of minutiae.
But growth in the wrong areas, at the wrong time, or at the wrong pace inserts its own constraints. With too many layers in between the work and the decision making, there's risk that vital feedback doesn't reach the upper levels where decisions get made. In the process of communicating up, each management layer makes its own edits, attempting to pull out noise and isolate signal. But like a game of telephone, the signal-to-noise ratio gets warped with too many (or the wrong) intermediaries. Every edit made on the way up is subject to biases.
Business processes, too, become things slavishly followed rather than systems for repeatability. Sometimes "trust the process" is right. And sometimes a process becomes a thing you're serving, and not the other way around.
Org hierarchy and process are both proxies: mechanisms meant to add efficiency and enable growth. But they can have negative consequences taken too far.
In his letter to shareholders in 2016, Jeff Bezos wrote about this idea — proxies dilute the signal required for effective leadership:
Resist Proxies
As companies get larger and more complex, there’s a tendency to manage to proxies. This comes in many shapes and sizes, and it’s dangerous, subtle, and very Day 2.
A common example is process as proxy. Good process serves you so you can serve customers. But if you’re not watchful, the process can become the thing. This can happen very easily in large organizations. The process becomes the proxy for the result you want. You stop looking at outcomes and just make sure you’re doing the process right. Gulp. It’s not that rare to hear a junior leader defend a bad outcome with something like, “Well, we followed the process.” A more experienced leader will use it as an opportunity to investigate and improve the process. The process is not the thing. It’s always worth asking, do we own the process or does the process own us? In a Day 2 company, you might find it’s the second.
Another example: market research and customer surveys can become proxies for customers – something that’s especially dangerous when you’re inventing and designing products. “Fifty-five percent of beta testers report being satisfied with this feature. That is up from 47% in the first survey.” That’s hard to interpret and could unintentionally mislead.
Good inventors and designers deeply understand their customer. They spend tremendous energy developing that intuition. They study and understand many anecdotes rather than only the averages you’ll find on surveys. They live with the design.
I’m not against beta testing or surveys. But you, the product or service owner, must understand the customer, have a vision, and love the offering. Then, beta testing and research can help you find your blind spots. A remarkable customer experience starts with heart, intuition, curiosity, play, guts, taste. You won’t find any of it in a survey.
In a noble-intentioned effort to push more intel upstream to make decisions, proxies can inadvertently gum up the system and confuse people.
There's an anecdote from Bezos on this where there was a weekly business review at Amazon on the topic of delays in customer service. The customer complaints said one number, the data in the reports said another. So to resolve to something concrete, he called customer service and sat in silence in the middle of the executive team meeting:
One shouldn't take away that a single event represents the mean. But when you can't separate the fact from fiction in a dispute about the data, remove the proxies and go straight to the source.
When Elon Musk walks the production floor at Tesla (with detailed knowledge of its processes), or spends the night at the X offices, one of the primary reasons is to directly connect to what's happening.
Of course Elon's an extreme case. We don't need to pull all-nighters every week with the staff as a CEO of a 1,000 person business.
But it's a helpful principle to think in terms of getting as close as possible to the true source of information, especially when you've got conflicting signals.