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Jeff Bezos: Be Skeptical of Proxies. They Will Kill Your Company.

By Jeff Bezos · Leadership · 1 min read

Someone invented a metric 10 years ago. They had a reason. Five years later, the world shifted. But the metric stayed. Now you're managing to a proxy that no longer reflects reality. Bezos says this is a very common and very big problem.

Key Points

Metrics are proxies for truth — not truth itself. A customer happiness metric is not customer happiness.
The person who invented the metric understood the connection. Five years later, the organization forgets why.
Managing to metrics you don't understand is a way to slip into 'day two' thinking.

You're not really sure why they were invented in the first place. And you're not sure they're still as relevant as they used to be.

The Proxy Problem

Bezos: One of the things that happens when something is underway for a number of years — you develop certain things you're managing to. A metric. But that metric isn't the real underlying thing.

Maybe it's customer returns per unit sold. An important metric. But it's a proxy. The proxy for customer happiness. It's not actually customer happiness.

That metric is a proxy for customer happiness. It's not actually customer happiness.

The Person Who Invented It Understood. You Don't.

Bezos: The person who invented that metric understood the connection. Fast forward five years — a kind of inertia sets in. You forget the truth behind why you were watching that metric in the first place.

And the world shifts a little. Now that proxy isn't as viable as it used to be. Or it's missing something. You have to be on alert for that.

The person who invented the metric understood the connection. Five years later, you've forgotten why.

Day Two Thinking

Bezos: This is a nuanced problem. It's very common, especially in large companies — they are managing to metrics they don't really understand. They don't know why they exist. The world may have shifted out from under them. The metrics are no longer as relevant as when somebody invented them 10 years earlier.

You do need metrics. You can't ignore them. But you have to be constantly on guard. A way to slip into day two thinking is to manage your business to metrics you don't really understand and you're not sure they're still as relevant as they used to be.

Managing to metrics you don't understand is a way to slip into day two thinking.