It’s not cash flow, not ROI, not COGS.
It’s actually the length and depth of the human capacity to absorb details.
Why do our documents have executive summaries? Why do we need to present the “50,000” foot view? Why do managers always strive to get out of the “weeds”?
It’s because attention spans are finite and humans can only keep so much information in their heads at once.
Let’s take a real world example involving trash pickup. (Our town recently implemented some changes to our garbage pickup, which were top of mind this weekend).
When the proposal to modify trash pickup was presented to our town government, I bet it looked something like this (sliced at each level of granularity).
Objective: Save money on the town budget
Strategy: Lower cost of labor and reduce injuries (lowering cost of injury leave) for trash pickup workers
Implementation: Give every house in the neighborhood a new rolling trashcan that can be picked up by a mechanical arm attached to the trash truck. Attach a mechanical arm to the trash truck that automatically lifts and dumps the trash into the trucks. Reduce trash pickup to 1x per week.
Implementation details: Drag the carts to the curb and hook them up to the arm on the end of the truck, press the lever. Drive to the next house. Works best if you give the can one last shake before letting it down.
The objective was set by the town Mayor – the highest level stakeholder who oversees many departments at once. The Mayor only has the mental capacity to know a little bit about each department, but he does know that he needs to save money on the town budget. If you were to talk to the Mayor about the implementation details of this particular cost cutting measure – it would be completely lost on him. He doesn’t have the time or attention to learn about anything but the highest level objective and strategy.
Next is the General Foreman who is responsible for the department of public works in our town. He picks up where the Mayor left off. He understands the strategy and proposes an implantation (tactics) that support the strategy.
Then is the head of garbage pickup who understands the implementation and develops the implementation details to train the team of garbage workers.
It’s all one beautiful waterfall where everyone knows exactly what they are suppose to be doing and no one has to keep more information in their heads than they can handle.
Human mental capacity – what an incredibly powerful variable to master.