As companies grow, too many of them show deference to inertia
At Clipboard, a few mental models guide how we approach our work. They provide shortcuts to “thinking about a situation”, and are often generally applicable.
One shortcut concerns complexity. Here’s an anecdote to illustrate what I mean:
I recently found myself discussing whether we should remove a fee from the standard contract we enter with healthcare facilities.
When we provide a facility with a short-term nurse, there’s a small chance that the facility will like the nurse so much that it decides to hire them as a traditional, full-time employee.
We generally love it when that happens — if it’s something the nurse wants, then Clipboard was able to help someone get to the next point in their career.
Our contract stated that facilities would owe us a “Direct Hire Fee”, similar to how a traditional temp agency gets a small bonus when a temp becomes a permanent employee. (This example is just for context. The principle I’m working up to applies more broadly.)
Someone pointed out that the fee was hardly worth the trouble to us: it had never brought in much revenue, and we had some anecdotal evidence that some healthcare facilities weren’t signing up because they were worried that clause might have unpredictable downsides for them in the future.
More importantly, the fee added complexity to our whole process. Our contracts and code were both longer and harder to read because it was included.
The questions that emerged in the discussion were pretty straightforward and a bit predictable: Were we ever going to push direct hire fees harder in the future? Isn’t it possible we’d have unexpected trouble if we didn’t have something built into our system for this? Since all our data on this problem is anecdotal, is it possible it’s not a problem at all?
Those questions, while thoughtful, showed deference to inertia. Since we already had the feature, the natural reflex was to shift the burden of proof onto those who wanted to remove it. But that’s starting from the status quo. It’s assuming that the history of a feature or habit should influence how you think about it today. That we as a company cannot make a better decision now based on everything we have learned.
My mental model is “if we were starting CBH today from scratch, would I prioritize adding this?” In this case, we have a feature that adds complexity to our process and has never moved the needle in a positive way for us. If we were proposing adding that feature today, we wouldn’t add it — thus, we shouldn’t have it now. Making the feature justify its own existence today and ignoring sunk costs makes this a much easier decision. We are rehiring product features for the job that must be done, much as we are rehiring ourselves.
That’s how I want us to think about all changes. If we were starting CBH today, knowing what we now know, would we approach a particular task the same way? I’ve found it focuses the mind. And remember: our future competitors will be starting from a clean slate, after researching our strengths and weaknesses. If we don’t approach our decisions fresh, we give those competitors the advantage of learning from our mistakes at no cost to themselves.
We have to think this way or all the cruft and complexity we’ve built up along the way gets grandfathered into our future. That would leave us with a much worse, much heavier, and much slower product, and our future competitors will rightly out-compete us.
This is especially true when a decision is a two-way door, as this one was. That is, when we can revisit something, and undo it if we learn we were wrong. If we couldn’t revisit a decision that had wide-ranging potential consequences, it would be prudent to spend more time thinking about it from every possible angle.
But that’s slow. If you do that with every decision you make, eventually you don’t have time to do anything but debate every decision. Making product features re-justify themselves today not only keeps the product light but avoids this kind of debate-bound deceleration while keeping the organization light and quick.
I love how much everyone in this conversation cared. I didn’t quote every part of the discussion, but there were questions about the customer, about building a great marketplace long-term, questions that showed real engagement in a dozen other ways.
We will continue to ask great questions and point out issues, but also develop and apply mental models like these to help everyone put their minds at a better starting point as we engage in these discussions.
We should apply constant pressure to squeeze complexity out of our code and business processes. Complexity must justify and re-justify its own existence. We should lower the friction to remove complexity. We should remove complexity and maintain that early-stage startup speed, by default, so that in the future we can move quickly and effectively on complexity that justifies itself today.
This article first appeared as a post on Clipboard Health’s internal blog. If our way of thinking interests you, you can learn more about opportunities at CBH here.
We share our thoughts so people can learn who we are and how we do things at Clipboard Health. If our approach to our work appeals to you, you can learn more about joining us here.
Editor’s note: The one-way door concept is from the Amazon Shareholder Letter, where Jeff Bezos wrote:
Some decisions are consequential and irreversible or nearly irreversible -- one-way doors -- and these decisions must be made methodically, carefully, slowly, with great deliberation and consultation. If you walk through and don't like what you see on the other side, you can't get back to where you were before. We can call these Type 1 decisions.
But most decisions aren't like that -- they are changeable, reversible -- they're two-way doors. If you've made a suboptimal Type 2 decision, you don't have to live with the consequences for that long. You can reopen the door and go back through. Type 2 decisions can and should be made quickly by high judgment individuals or small groups.
As organizations get larger, there seems to be a tendency to use the heavy-weight Type 1 decision-making process on most decisions, including many Type 2 decisions. The end result of this is slowness, unthoughtful risk aversion, failure to experiment sufficiently, and consequently diminished invention. We'll have to figure out how to fight that tendency.