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

┌─────────────────────────────────────────────────────┐ │ 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

                ┌─────────────────┐
                │  Better Customer│
                │   Experience    │
                └────────┬────────┘
                         ↓

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

How To Apply

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