The Local Optimisation Problem in Large Organisations
The inherent complexity in large organisations resigns the individuals in it to optimise for local metrics in absence of visibility and/or influence towards the global metrics
One of the most insidious problems in large organizations is what I call the "local optimization trap." This happens when teams and individuals, unable to see or influence the bigger picture, focus intensely on optimizing their small piece of the puzzle - often to the detriment of the organization's actual goals.
I first noticed this pattern while observing how different teams operated within big tech companies. A classic example is how say privacy and safety teams sometimes evolve in social media companies. These teams start with the crucial mission of keeping platforms safe and trustworthy. But without careful alignment to broader company goals, they can spiral into building increasingly complex safety systems that deliver diminishing returns while consuming enormous resources. Years later when someone zooms out to ask how many millions/billions of dollars got spent on this, and did it actually help larger business outcomes like drive ad revenue, engage users for longer in the app etc, people don't like the answer.
This isn't because these teams are incompetent or malicious. Quite the opposite - they're often staffed with brilliant, dedicated people. The problem is structural. When you're deep in the trenches of a specific domain, it's natural to keep finding more things to optimize. Each incremental improvement seems logical from ground level, but from orbit, you might be polishing a doorknob while the house is on fire.
The phenomenon isn't unique to tech. In academia, you'll find researchers who've drilled so deep into their sub-sub-specialty that they've lost sight of whether their work matters to the field at large. In government, you'll find departments that have developed byzantine processes that make perfect sense internally but create friction for the broader organization.
Why does this happen? Several factors contribute:
Distance from impact: As organizations grow, many roles become increasingly removed from customer impact or revenue generation. This makes it harder to naturally calibrate effort versus value.
Measurement problems: It's often easier to measure local metrics than global impact. A safety team can count blocked violations, but measuring the opportunity cost of false positives is much harder.
Career incentives: People are typically rewarded for showing impact within their scope of control, not for questioning whether their scope matters.
Complexity shield: Large organizations become so complex that few people can confidently challenge whether a specialized team's efforts are worthwhile.
The most dangerous aspect is that local optimization can look like success. Teams can show impressive metrics, launch new features, and demonstrate continuous improvement - all while potentially making the organization less effective overall.
Consider a hypothetical example: An ads quality team might build sophisticated systems to eliminate every last spam ad, while inadvertently making the ad submission process so complex that legitimate small businesses give up. The team's metrics look great (spam down 99.9%!), but the company is losing valuable revenue and market share.
The solution isn't to eliminate specialized teams or stop local optimization entirely. Rather, organizations need to build better mechanisms for maintaining global alignment:
Regular zooming out: Teams should periodically step back and reassess their work against top-level company goals.
Cross-functional reality checks: Create forums where teams must justify their efforts to peers from other domains.
Resource tension: Maintain healthy competition for resources so teams must demonstrate real impact to grow.
Rotation programs: Help people develop broader perspective by moving between different parts of the organization.
Clear north stars: Establish and communicate simple, compelling metrics that matter for the entire organization.
Some of the most successful companies maintain their effectiveness by ruthlessly pruning activities that don't serve the core mission. Amazon's famous "Day 1" philosophy and Apple's ability to say "no" to good ideas that don't serve the bigger picture are examples of this discipline.
The local optimization trap is particularly relevant today as organizations grow increasingly complex and specialized. As artificial intelligence and other technologies enable even more sophisticated optimization, the risk of teams disappearing down optimization rabbit holes only increases.
The best defense is awareness. Once you understand the pattern, you start seeing it everywhere - and can catch yourself when you're falling into the trap. The next time you're deep in an optimization effort, take a moment to ask: Am I polishing a doorknob while the house is on fire?
The most valuable work often isn't about optimizing what's in front of you, but stepping back to ensure you're working on the right things in the first place.