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Two Pizzas
In the early 2000s, Amazon was growing fast while quietly slowing down.
Meetings were getting bigger. Decisions took longer.
Teams spent more time coordinating than building.
The company that once moved with startup speed was starting to lag under its own weight.
That’s when Jeff Bezos introduced a deceptively simple rule:
If a team can’t be fed with two pizzas, it’s too big.
It sounded quirky but it wasn’t about food.
It was about feedback.
Smaller teams made decisions faster.
They shipped sooner.
They saw customer reactions immediately.
Large teams debated.
They had to align with other bigger teams.
Decisions stalled.
Amazon didn’t adopt two-pizza teams to move faster for the sake of speed.
They did it to shorten the distance between data, decisions and actions.
Bezos understood something most leaders learn too late:
Businesses don’t stall because they lack ideas or resources.
They stall because feedback loops get too long.
And when learning slows, everything else follows.
Feedback Loops
Whether you’re an online retailer, manufacturing cars, shipping software or providing services, all businesses run on feedback loops.
The basic feedback loop driving every part of a business consists of:
Gathering Data
Making a Decision
Taking Action
The key insight is these steps are part of a loop so every point can be a beginning.
The goal is to shorten the gaps between each step in the loop regardless where you are in the loop.
Source: The Leap
Some loops are naturally longer than others but the longer the loop the higher the risk of:
Acting on outdated or incomplete information
Discovering problems only after they compound
Missed opportunities
Wasted resources
Poor decision making
When I reflect on where things have gone well or poorly in my own businesses as well as my clients’ it often comes back to the effectiveness of internal feedback loops.
The Three Gaps
Data-To-Decision
We’ve all said or thought, “If only I had more information, I could make a better decision.”
“Analysis paralysis” is one of the greatest business clichés for a reason.
There are times when more information gathering is warranted.
Often, however, we’re delaying making a decision for other reasons that are needlessly preventing progress.
How to mind the data-to-decision gap:
Pre-Define Metrics
Before you begin gathering data, define what the decision criteria will be. You can add other metrics if your research uncovers other factors to consider. However, I often notice teams getting lost in information when they begin gathering data without pre-defining what matters in the first place. Pre-defining what matters also limits bias.
Signal vs Noise
Once you pre-define metrics, deciding on what’s most important will help effectively make decisions. So much of what we think is valuable is ultimately noise.
Take action
The post below from Brian Armstrong, founder and CEO of Coinbase, highlights one of the most effective strategies to closing the data-to-decision gap. Taking action for the purposes of gathering information accelerates you around the feedback loop.
Decision-To-Action
Most of us get caught in analysis paralysis but often after we make decisions we hesitate or our teams don’t carry out the order with the urgency we expected.
How to mind the decision-to-action gap:
Unclear Direction
Decisions that lack specificity rarely lead to action. If people leave a meeting unsure what changed or what is now expected, the decision hasn’t actually landed. Clear decisions translate intent into concrete next steps.
Lack of Ownership
When everyone is responsible, no one is. Every decision needs a single owner who is accountable for turning it into action. Ownership is the cord that connects intent to execution.
No Deadlines
Without a time constraint, action drifts. Deadlines force prioritization and surface hidden constraints. Even an imperfect deadline shortens the loop and accelerates learning.
Action-To-Data
We’ve gathered the relevant information, decided and taken action.
Now what?
Are we succeeding? Should we stay the course or pivot? Once we take action how will we know?
How to mind the action-to-data gap:
Undefined Metrics
If success isn’t defined before action is taken, results become subjective. Clear metrics turn outcomes into data instead of opinions and prevent retroactive justification.
Lagging Indicators
Business success often means sales but what about all the steps leading up to the sale including your contact funnel, the number of phone calls or demos performed by the sales team?
How many hits or conversions are happening on your website?
Leading indicators surface problems sooner rather than later, before revenue, morale, momentum or quality are materially affected.
The most important indicators such as revenue or sales are often lagging indicators.
Where can you get earlier signals of success or failure in your business?
Learning Checkpoints
Action without reflection closes nothing. Explicit checkpoints whether they’re weekly, bi-weekly, or milestone-based, force teams to ask:
What did we expect?
What happened?
What changes now?
Learning must be scheduled or it won’t happen.
The Next Step
Your business has many feedback loops across every area or department.
Examples include:
Sales cycles
Hiring and employee assessments
Product development
Customer service
Marketing funnels
Where within these loops are critical gaps hindering your growth?
Pick one of the above areas (or others) and analyze where loops are breaking down.
Improving feedback loops will dramatically improve your business.
Bonus tip - You’ll likely find patterns. I often see companies have issues at the same gap within all of their feedback loops.
This is because cultural patterns often repeat throughout the business.
My goal with The Leap is to provide you each Saturday with the knowledge, tools and lessons learned to help you get started and keep going toward building your future.
Whether you are making the leap to startups, solo-entrepreneurship, freelancing, side hustles or other creative ventures, the tools and strategies to succeed in each are similar.