Performance = Potential − Interference
Two levers only: raise the team's ceiling, or remove the weight sitting on top of it.
- Difficulty
- Moderate
- Time to result
- ~ongoing to results
- Steps
- 5
- Confidence
- 95%
A leadership formula Katie Dill picked up at Airbnb and has used ever since as her operating model for team building. Team performance is a function of the team's potential (talent, growth, development) minus the interferences that suppress it (misalignment, wasted work, broken processes, bad seating, unclear goals). Most leaders obsess over the first term and neglect the second — but the best people in the world will atrophy under interference like a muscle under a cast.
Origin
Katie Dill credits learning this formula during her time at Airbnb. It is a descendant of Timothy Gallwey's 'Inner Game' formula (Performance = Potential − Interference) from The Inner Game of Tennis, applied here to organizational leadership rather than individual sport.
Core principles
- 01Hiring great people is only half the equation — the other half is subtractive.
- 02Interference compounds as headcount grows; processes that worked at 30 people put you in a faulty state at 100.
- 03Running slightly hot is acceptable — it reveals how people actually want to work before you redesign the process.
- 04Designing a team is never done; it is continuous design work like any product.
How to run it
- 1
Audit the potential side
Assess hiring quality and talent development. Are you hiring for the bar you claim to hold? Are people growing such that their own ceiling rises over time?
Pro tip Potential is not just raw talent — it includes the development you invest in after they join.
- 2
Hunt for interference explicitly
Ask constantly: what is holding this team back from doing great work? Look for wasted work, misalignment between functions, decisions being made in rooms the makers aren't in, slow iteration cycles, and processes the team has outgrown.
Pro tip Wasted work and rework are the loudest interference signal — if a team's output regularly turns out to be misaligned with the goal, the interference is structural, not individual.
Watch out Interference does not present as a complaint. It presents as burnout, low engagement scores, and quietly disappointing output.
- 3
Let processes run hot before redesigning them
Deliberately allow the team to outgrow its processes rather than pre-building bureaucracy. When it strains, you learn how people actually want to work, and the redesign is informed and sought-after rather than imposed.
Pro tip Changes made at the moment of strain are welcomed; changes made pre-emptively are resented.
Watch out This only works if you actually fix it when it breaks — running hot indefinitely is just interference.
- 4
Remove the interference with the team, not at them
Make the structural change (reorg, seating, process, alignment ritual) collaboratively, with the affected functions bought in, so the fix does not itself become a new interference.
Pro tip Pair this with the 'come in listening' approach — a change that erodes trust costs more than the interference it removed.
- 5
Repeat as the company grows
Re-run the potential/interference audit continuously. Every wave of new people puts your existing processes into a faulty state again.
In the wild
At Lyft, the design team sat in a beautifully designed, wall-to-wall-whiteboard room separated from engineering and product by a locked door. It was a genuine creative sanctuary — but PMs and engineers were making decisions in one room while designers worked in another, so work was regularly misaligned, slow, and thrown away. Dill diagnosed this as interference, spent time listening to design, engineering, and product first, then reorganized: designers embedded with the engineers and PMs on driver, rider, and safety teams — while explicitly keeping a protected creative space for crits, working sessions, and non-embedded functions.
→ Faster iteration cycles, better clarity on the work, less wasted effort — with the creative space preserved rather than sacrificed.
After the design team's intervention exposed that Dill had not earned their trust, she shifted from inflicting change to building it with them — removing the trust interference rather than pushing harder on the change agenda.
→ Within a couple of months the design team had the best engagement scores in the company.
Common mistakes
Solving performance problems only by hiring
Adding more talent to a system full of interference just gives you more people to frustrate. You can hire the best people in the world and still get weak performance if a cast is sitting on the muscle.
Treating team design as a one-time event
A reorg is not a fix, it is a snapshot. Every growth wave invalidates the processes that were working, and interference silently rebuilds.
Is it for you?
Best for
Design, product, or engineering leaders scaling a team through hypergrowth who are seeing burnout, wasted work, or flat output despite strong hires.
Not ideal for
Situations where the real problem is a talent bar issue — no amount of interference removal fixes a team that genuinely lacks the skill.
From the transcript
“so performance equals potential minus interference”
“as to like how can I increase potential how can I decrease interferences”
“you can hire the best people in the world but like a muscle atrophying underneath a cast”
“we broke down the wall and you know brought you the teams physically together”
“we still kept the creative space for you know this is where we'll do crit”
From the episode
Building beautiful products with Stripe’s Head of Design
Katie Dill (Stripe, Airbnb, Lyft)