Judgement and Excellence

Ed Fowkes
Jun 11
5 min read

We’ve been looking at how we can read and surf the curves of growth, the push and pull of efficiency and complexity, and how activity, value and effort are rarely distributed in a fair and even manner.

Beneath much of business, economics and technology sit recurring, structural patterns. Curves, distributions and constraints that appear again and again across nature, physics, networks and human behaviour. Difficult to ignore, like much of science and its laws, the maths behind these patterns is hard to break or to work against.

While last week we focussed on uneven and unfair distribution, we are, if we are focussed, able to leverage the shape of reality in our favour. And so, this week I shall look at Judgement and Excellence and how we can make one lead to the other.

Welcome to Part 4 of our series: Misreading the Shape of Reality, which increasingly resembles a Douglas Adams trilogy, examining the hidden structures shaping business, growth and human systems.

Judgement

At this point, a natural question emerges. If value is concentrated and effort eventually dilutes it, how do I decide where to focus? This is where measurement enters and with it, a new layer of distortion.

Charles Goodhart observed that when a measure becomes a target, it ceases to be a good measure.

Now before I continue, I’ll just say “Data is golden.” However…

Metrics serve as useful proxies. They help us navigate complexity, track progress and make decisions with a degree of objectivity, at first. Then, over time, something shifts. We can begin to optimise for the metric itself, rather than the underlying outcome it should represent.

Consider a simple social media pathway. Impressions lead to connections, which lead to conversations, which lead to revenue. At first, tracking impressions provides a useful sense of activity at the top of the funnel. Over time, however, the temptation is to increase impressions as a direct route to growth. More content = more reach = more visibility.

Impressions in isolation do not create any value. They are a few steps removed from the outcome and if focus shifts towards maximising them, the quality of connections may well decline, the relevance of conversations can weaken, and the relationship to revenue becomes less reliable.

But impressions are up!

The metric has improved. The system has not.

In more extreme cases, the distortion becomes structural. All over, we come across incentives that are aligned to activity rather than outcome.

Take the classic letting agent model where the system rewards volume over quality. The agent is paid commission for every contractor call out. Work that doesn’t solve the maintenance issue for their client is in their interest, while working against their client’s.

An investment case is adjusted in a decision made to satisfy the measurement rather than the objective, to “make it work.” The team has focused on hitting targets that, while technically achieved, do little to advance the business and may well break it.

These are obvious when viewed from a distance. Less so when embedded within your own operation. And this is precisely why they endure.

Our Case Study

Returning once more to our founder, the issue begins to clarify.

The garden design business had not failed to generate activity. Quite the opposite. But activity had become diffuse and effort was spread across too many options, too many conversations, too many directions. The system was busy, but it was no longer effective.

Sales conversations used to be informal but they were highly relational and filled with trust. As the company grew, however, the process became broader and less guided. Customers were presented with increasing numbers of choices and expected to navigate them, largely alone. The pathway to decision became slower, heavier and less certain. The small number of actions that actually drove outcomes had been diluted by a larger set that did not. It all took a lot of effort. And value was not being realised.

The founder told me they wanted to understand how their role needed to change. So we started with data. The data was there.

For the garden design and build outfit, across 27 flooring choices, just 5 represented more than 80% of actual selections. Plus, other than 2, each of the 5 served a rather different purpose. So I asked “Why is the customer being presented all 27 equally?”

Across almost every category a similar pattern emerged. I never decided whether Price or Pareto was responsible, but one or the other was waving their magic wand. How to make customer choices easier became a fairly simple exercise. They settled on a few palettes, with a slider variation chooser, making the whole process very smooth, pleasant and fast for the customer. The eventual solution was not removing choice entirely, but structuring it intentionally.

While our case study deals with customer choices, it presents the uncomfortable truth - that most of what you do does not matter as much as you think it does. A small number of actions, decisions and people drive the majority of outcomes. The rest, while not irrelevant, contribute far less than their presence suggests. There are a hundred mineral waters. Fun to guess which ones are safe to drink. Until this imbalance is recognised, the natural response is just to do more. To improve everything. To optimise across the board. And in doing so, to miss the very leverage that would have made the difference.

Excellence

A different approach begins with a different question. Not “how do I improve everything?” But “where is the leverage?”. Where are the few points in the system where effort translates most directly into outcome? Where does a small improvement create a disproportionate effect? You can't get what you want till you know what you want.

In systems governed by these uneven distributions, progress can be made disproportionately once the evidence starts to flow. We don’t do it through uniform improvement. We do it through focused amplification.

There is a temptation to resist this idea. Especially when it comes to our staff. It challenges notions of fairness, balance and even effort itself. It suggests that some work matters more, some people contribute more, some decisions carry more weight.

This is not a moral statement. It is a structural one. Nature does not distribute evenly. It concentrates. And in business, as in nature, the goal is not to make everything better. It is to recognise what matters… and make that exceptional.

Part 5 - The Game and Its Networks, was inadvertently emailed to you a couple of weeks back. So you can access it here. In it, we step beyond the business itself. Because even with an understanding of curves and concentration, one final layer remains.

No system operates alone. Value, growth and limitation are all shaped by something larger. The network you sit within… and the constraints you cannot escape no matter how hard you might try to.