Then again, the two taxa or OTUs with the smallest distances are clustered together. This process continues until all OTUs have been clustered together. This method obviously assumes that the taxa are all extant and that all rates of change are equal. While this is an explicit assumption of the method, it has been demonstrated that empirically these algorithms will work quite well even if exact constancy of rates does not hold. All that is required is that there is sufficient regularity in rates to permit phenetic methods to work.
Some data come naturally in the form of a distance between species.
For other forms of data, the distances are calculated from sequences of characters. The reduction of this data from sequences to a single number obviously leads to a loss of information. But you can gain a great deal from the speed and simplicity of these distance methods. This is generally not a valid assumption. Hence corrections for distances and accurate measures of the distance become very important.