The Controllable Inputs Framework

"If we served customers well... things like sales, revenue... and share price... would follow. We took it as an article of faith." — Bill Carr

What It Is

A management focus on "Input Metrics" (controllable activities like selection, price, speed) rather than "Output Metrics" (lagging indicators like revenue, stock price), often conceptualized as a Flywheel.

When To Use

•When defining OKRs
•Conducting weekly business reviews (WBR)
•When growth stalls and you need to diagnose
•Avoiding short-term reactive decision making

Inputs vs. Outputs

code

┌─────────────────────────────────────────────────────┐
│  OUTPUT METRICS (Lagging)                           │
│  ❌ Revenue                                         │
│  ❌ Stock price                                     │
│  ❌ Active users                                    │
│  → Results of past actions                          │
│  → Not directly controllable                        │
├─────────────────────────────────────────────────────┤
│  INPUT METRICS (Leading)                            │
│  ✅ Selection (# of products)                       │
│  ✅ Price (% below competition)                     │
│  ✅ Speed (delivery time)                           │
│  → Actions you take today                           │
│  → Directly controllable                            │
└─────────────────────────────────────────────────────┘

The Amazon Flywheel

code

                    ┌─────────────────┐
                    │  Better Customer│
                    │   Experience    │
                    └────────┬────────┘
                             ↓
┌─────────────────┐    ┌─────────────────┐
│  Lower Prices   │←───│  More Traffic   │
└────────┬────────┘    └─────────────────┘
         ↓                     ↑
┌─────────────────┐    ┌─────────────────┐
│  Lower Cost     │    │  More Sellers   │
│  Structure      │───→│  More Selection │
└─────────────────┘    └─────────────────┘

How To Apply

code

STEP 1: Identify Your Flywheel
└── What inputs drive customer experience?
└── How do they compound?

STEP 2: Define Input Metrics
└── Each must be controllable
└── Each must have causal link to outputs

STEP 3: Measure Continuously
└── Weekly Business Reviews (WBRs)
└── Real-time dashboards

STEP 4: Resist Output Obsession
└── When output dips, diagnose inputs
└── Don't panic-optimize the output directly

Common Mistakes

❌ Confusing outputs (active users, revenue) with inputs

❌ Creating "compound metrics" that obscure root cause

❌ Reacting to output dips with short-term hacks

Real-World Example

Amazon focused on "Selection" (number of detail pages) and "Lower Prices" as inputs, believing they would drive the output of "Free Cash Flow" via the Flywheel effect.

Source: Bill Carr, Co-author of "Working Backwards", Lenny's Podcast