The Amazon Way

/0 Comments/in , , /by

John Rossman, a former Amazon executive, weaved his own war story at Amazon around their 14 leadership principles. He colorfully brought them to life using personal and insightful commentaries. The Amazon Way reveals the leadership ‘secrets’ behind one of the most disruptive companies in the world. While these stories are no secret, Rossman effectively aligns them with Amazon’s guiding principles that can be applied to all decision making processes, both business and everyday life, and can be used every day by every employee.

The Amazon 14 Leadership Principles:

  1. Obsess over the customer
  2. Take ownership of results
  3. Invent and simplify  
  4. Leaders are right – A lot
  5. Hire and develop the best
  6. Insist on the highest standards
  7. Think Big
  8. Have a bias for action
  9. Practice frugality
  10. Be vocally self-critical
  11. Earn the trust of others
  12. Dive deep
  13. Have backbone – Disagree & commit
  14. Deliver results

 

  1. Obsess Over the Customer

Put yourself in the customer’s shoes and deduce even their unwanted needs. Most times, we only listen to what our customers want and fail to go deeper into what they really need or what they could need in the future. Nothing replaces a “nothing but awesome, beyond this universe” customer satisfaction. Being obsessed over the customer is the central dogma in every aspect of Amazon From the website login page, the actual site, the display of products and services, to how they managing complaints. In a nutshell, yes the customer is not always right, but Amazon makes sure that your process and experience does not make you, the customer, realize that.    

  1. Take Ownership of Results

Every employee at Amazon acts as an owner. From the leader to the guy helping loading trucks, no one says, “that’s not my job.” They always work on behalf of the entire company. If there’s a more effective way to clean the toilet, they will test and implement. Amazon believes that Senior employees should also relate with customers, answer queries, go out for interviews or make a couple of sales calls. These strategies will help get first-hand feedback and truly understand the user/customer and instead of a filter version. Regardless of your role in the organization, everyone is responsible for taking ownership of delivering the best customer experience possible and the small details that it involves.  Amazon’s compensation plan rewards long-term thinking – in as much as employees typically get stock options rather than lavish salaries or excessive perks. Take absolute responsibility for everything under your purview, even that which is done by some other team. Have a fall back for them so you can own the result and not blame it on someone else.

  1. Invent and Simplify  

Amazon has built-in systems that identify less than perfect customer experiences and then provides refunds, then works to perfect the customer experience. Amazon innovates at scale. Employees are expected to design and build innovations which will make things better for millions of customers and tens of thousands of partners.

Determine what your customers need and walk backward, even if it means learning a new skill.  Simple sells much more than complex, so think big. The most radical innovations are those that help others unleash their creativity.

  1. Leaders are Right – A lot

Develop robust frameworks for decision making. Great leaders use it all the time and articulate to the team for effective decision making. Embed real-time metrics right from the start of an initiative.  Avoid minimization framework. Sometimes, we have to ask ourselves the question of “will I regret having done this/not having done this when I am 80?” This helps give a good perspective of things that might seem confusing now and helps to separate the short term from the long term. It is easier to stop things from happening then it is to make things happen. Leaders at Amazon understand details and metrics two to three level deeper than leaders at most other companies. Flourishing companies are filled with bright people who have the authority to achieve but also the confidence that if they fail, somebody will pick them up, dust them off and give them another chance.

  1. Hire and Develop the Best

Here is a question that you will hear every day, at every meeting or informal conversation among Amazonians. How are we raising the bar here? And this is even more important when hiring new staff members.  As part of the hiring process, Amazon has a team of Bar Raisers. It is the responsibility of the Bar Raiser to assess if the candidate is bringing to Amazon a set of values and skills that is making Amazon better. Every new hire should not just match Amazon values, but bring extra value that will raise the bar of Amazon as a whole. Amazon’s hiring process is famous for its rigor. It is not unusual for potential new hires to go through twenty or more interviews over a five- or six-week period before a decision is made.

  1. Insist on the Highest Standards

Amazon leadership expects nothing less than every employee thinks and act like a leader or, at a minimum, a leader in training. This approach forces every  Amazonian to step us their game and keep raising the bar for themselves and for the team.

  1. Think Big

One of the most impactful leadership principles for me is this one, mainly because of the point of view of the Amazonians, in the thinking big process. For someone to continually think big, they have to destroy the previous paradigm. The must move away from the way they were thinking yesterday. For this reason, for every Amazonian, every day is DAY ONE. To keep up with Bezos and his leadership, you have to come prepared to “go big in your thinking or go home.” As a reminder, a building in Amazon’s headquarters is labeled DAY ONE. It is a reminder of the mindset under which you should be every day.

  1. Have a Bias for Action

The status quo is not a status. It is mostly an insult for Amazonians.  Amazon’s leaders err on the side of taking action. To promote action, every quarter, the company holds an all-hands meeting where awards aligned with Amazon’s values are given. By far, one of the most prestigious awards is named the “Just Do It” award, which encourages leadership to try new things all the time rather than suffering from analysis paralysis. This is another reminder of the high tolerance for initial failure that the organization promotes.

  1. Practice Frugality

Amazonians don’t spend resources on things that would not be of importance to customers. All resources (money, time, energy) are managed with a frugal mindset. This breeds resourcefulness, self-sufficiency and innovation. The bottom line is that it doesn’t take a genius to throw money and complexity at a problem. Amazonians are expected to know better.

  1. Be Vocally Self-critical

“Open your Kimono”. In Amazonian-lingo, this means that you are expected to be open to criticism and to speak up when things are not going as planned.  Doing that is more comfortable than covering things and hoping for the best. Open your Kimono or go home.

  1. Earn the Trust of Others

Jeff Bezos’ expectations of his leadership is to operate in the same way he works with them. Everyone should contribute to an atmosphere of trust at Amazon. The key is to encourage everyone to embrace and live the 14 principles and when in doubt, or conflict, Amazonians should contrast the conflict or doubts versus the principles.  

  1. Dive Deep

For Amazonians, there is no doubt in what ownership means. Ownership equals accountability. Therefore, Amazonian leaders understand the expectations of getting involved in the details of every project they are responsible for.

  1. Have a Backbone – Disagree & Commit

Often Jeff Bezos describes Amazon’s culture as being an intense-friendly environment. No PBS (Political Bull Shit) is allowed and everyone expects people to challenge each other. This includes Bezos and his ideas and he demands robust conversations.

  1. Deliver Results

These principles are designed with one goal in mind: delivering the most amazing customer experience, beyond the level of quality expected, on time and as a team.

In conclusion, Amazon’s leadership principles are tactical in nature however they drive everyday decisions and actions. If we take into consideration that Jeff Bezos holds the record as the wealthiest person in modern history and Amazon, the most disruptive organization of our time, any leader should pay close attention and use the 14 principles as prescriptions for their teams.

THE BIG THREE – KEY POINTS

Keypoint 1: The very best kind of customer service is no service at all – everything just works.

Keypoint 2: The first step to fixing a problem is acknowledging that it exists.

Keypoint 3: Minimize time and energy spent on routine interactions and instead spend time on innovation.

One Last Thing

“If you’re competitor-focused, you have to wait until there is a competitor to do something. Being customer-focused allows you to be more pioneering.” – Jeff Bezos