Michelle Obama once said, "When they go low, we go high." I disagree. Not in the "act upon your vengeance" sense, but when it comes to something far more tedious: getting your information.

You were taught the fragility of human communication when you played “telephone” as a kid. You were told one thing to pass on, so you did, but by the time it passed through just two other people, it was all distorted. That painfully simple children's game could never account for the complex information flows that Will Guidara faced, as he sought build the greatest fine-dining restaurant in the world.

Guidara had just fired an employee who had been making his coworkers’ lives miserable, but then, right after, corporate HQ called Guidara. They’d rehired him. Turns out, regulars loved him and his check averages were high. Yet they couldn’t see the destruction that Guidara saw on the ground.

The lesson was clear:

“The people at the top have all of the authority and none of the information, while the people on the front line have all the information but none of the authority.”

Too often, we struggle with deciphering the signal from the noise. Worse, we overlook the real nuggets of knowledge buried deep down in the trenches.

The quantitative metrics monitored by the restaurant company Guidara worked for were in direct conflict with something immeasurable but just as impactful: employee morale. They were suffering from an invisible disease - value capture.

Quoting Thi Nguyen, writer Trung Phan explains: “Value capture occurs when you get your values from some external source and let them rule you without adapting them. Value capture happens when a restaurant stops caring about making good food and starts caring about maximizing its Yelp rating. It happens when students stop caring about education and start caring about their GPA. It happens when scientists stop caring about finding truth and start caring about getting the biggest grants.”

Everyone’s favorite corporate overlord, Jeff Bezos, tells a personal story that captures the essence of this notion of value capture:

“I have a saying which is: When the data and the anecdotes disagree, the anecdotes are usually right.

It’s usually not that the data is being mis-collected. It’s usually that you’re not measuring the right thing.

If you have a bunch of customers complaining about something, and at the same time your metrics look like they shouldn’t be complaining, you should doubt the metrics.

An early example of this, we had metrics that showed our customers were waiting less than 60 seconds when they called a 1-800 number to get phone customer service. But we had a lot of complaints that it was longer than that. And anecdotally it seemed longer than that… I would call customer service myself.

One day we’re in a meeting and we get to this metric in the deck. And the guy who leads customer service is defending the metric. And I said, OK, let’s call. I picked up the phone and I dialed the 1-800 number… and we just waited in silence… It was really long. More than 10 minutes, I think.

It dramatically made the point that something was wrong with the data collection. We weren’t measuring the right thing. And that set off a chain of events where we started measuring it right.”

Bezos realized that they’d fallen into a sort of Venus flytrap - something that initially felt incredibly valuable but, because of their complacency, ended up constricting them.

Best-selling author Michael Lewis also stressed the importance of digging up accurate information when he coined the term “L6” in his book The Premonition. He explained in an interview how, in big systems “very often, the person who has the expertise to answer the problem, to deal with the problem… is buried way down in the organization, L6, six levels down.”

History is like a graveyard, littered with examples of fallen nation-states and companies that failed to find their L6.

What did history’s most infamous dictators — Hitler, Mussolini, Stalin, Mao — all have in common? They stuffed themselves into insular bubbles that kept them from gathering accurate information.

But weren’t these supposedly the most powerful figures in modern history? Correct! Which makes it all the more miraculous that they were able to wage war and conquer their enemies, at least temporarily.

Historian Sarah Paine explains: “If you’re in a dictatorship and the boss is always right, you don’t bring him bad news. You don’t tell him, ‘This isn’t working,’ because that’s dangerous for you. So the information going up is systematically filtered, and he ends up making decisions on the basis of very bad information…In a democracy, you can lose an election and go home. In a dictatorship, if you admit you were wrong, you might lose your job, your freedom, or your life. That makes it very hard for accurate information to reach the top.”

Gorbachev, the last leader of the Soviet Union, had decision-making built on information scaffolding that was rotten to the core. Paine explains:

“What’s going on? Everyone’s lying to each other. The data that Soviets are using is garbage. If you’re working for a subunit of an enterprise, you have to lie about the inventories you have, saying you have less than you do, and then you have to lie about what you need, saying you need more than you do… So everyone’s lying. They’re aggregating all the lies. The higher up the food chain you aggregate these things, the worse the data is, so that the Soviet government has no idea what the actual value of capital or labor are… and no one has any idea what consumer preferences are.”

Dictators and their faithless empires teach us: even if you manage to get information from the frontlines, who’s to say they’ll give you the right stuff?

Not everything that grows from the ground is roses.

Whether you're a democracy or dictatorship, sometimes it doesn’t matter. In some contexts, it's nearly impossible to even GET the right information, like in World War I.

Imagine you're an 18-year-old having to follow nonsensical orders passed down from the top — wrinkly old generals with huge mustaches (vogue), often leading you and thousands of others in circles through forests and marshland, as you went weeks without showering under the pains of dysentery. Distant decisions were being made over forces that were confused, often literally lost and, in Austro-Hungary's case, didn't even speak the same language as the ones next to them!! The information apparatus at the top was bleak. Mind you, this is before radio and phones, so, on top of rudderless leadership, it was nearly impossible to get timely, useful information from the frontlines.

Or take the Jimmy Carter administration of the 70s. As the events leading up to the 1979 Iranian Revolution were unfolding, the American embassy in Tehran, Iran’s capital, had no grasp on the size of the powder keg on which they sat — the common Iranian rushing to support the return of Ayatollah Khomeini, who would eventually usher in the country’s current regime, as the then-ruling Shah sat comfortably in his palace, blissfully unaware of his impending doom. In that moment, the ones on the “frontlines” were utterly useless to Washington. By the time the embassy in Tehran realized how popular Ayatollah Khomeini had become, it was too late.

As they say, history doesn’t repeat; it rhymes. China's Xi Jinping just committed another military purge, the largest in recent history. Why? Probably because he values loyalty over truth and accurate information.

Trump, despite having access to all the information on the ground in Minneapolis, chooses to double down on poor decisions. No wonder those closest to him, like Marco Rubio, hide away under a blanket to sleep on Air Force One, so as not to be judged as "weak."

The pattern is abundantly clear: you can have all the authority in the world, all the intelligence agencies, all the reports flowing upward, yet still be flying blind. The information can be right there, screaming at you, and you can choose not to hear it because it doesn't fit the narrative you've constructed.

This is why I find all most conspiracy theories to be comical. They fail to harmonize two irreconcilable truths: an institution’s supposed infallible competence despite its incredible blunders. The reality is a little simpler and sadder, like I’ve written before. Organizations often fail not because they're too good at keeping secrets and hoarding information, but because they’re so bad at facing the truth.

Thanks for taking the Pack,

Zach

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