Working Backwards: Insights, Stories, and Secrets from Inside Amazon

by Colin Bryar

Amazon believes that long-term growth is best produced by putting the customer first.

“Our culture is four things: customer obsession instead of competitor obsession; willingness to think long term, with a longer investment horizon than most of our peers; eagerness to invent, which of course goes hand in hand with failure; and then, finally, taking professional pride in operational excellence.”

the Bar Raiser hiring process that ensures that the company continues to acquire top talent; a bias for separable teams run by leaders with a singular focus that optimizes for speed of delivery and innovation; the use of written narratives instead of slide decks to ensure that deep understanding of complex issues drives well-informed decisions; a relentless focus on input metrics to ensure that teams work on activities that propel the business. And finally there is the product development process that gives this book its name: working backwards from the desired customer experience.

He truly embodies the Amazon motto, “Work hard, have fun, make history.”

“The world, thankfully, is full of many high-performing, highly distinctive corporate cultures. We never claim that our approach is the right one—just that it’s ours

Our emphasis is on what we call controllable input metrics, rather than output metrics. Controllable input metrics (e.g., reducing internal costs so you can affordably lower product prices, adding new items for sale on the website, or reducing standard delivery time) measure the set of activities that, if done well, will yield the desired results, or output metrics (such as monthly revenue and stock price). We detail these metrics as well as how to discover and track them in chapter six.

“You can write down your corporate culture, but when you do so, you’re discovering it, uncovering it—not creating it.

Leaders raise the performance bar with every hire and promotion. They recognize exceptional talent, and willingly move them throughout the organization. Leaders develop leaders and take seriously their role in coaching others.

Speed matters in business. Many decisions and actions are reversible and do not need extensive study. We value calculated risk-taking.

Accomplish more with less. Constraints breed resourcefulness, self-sufficiency, and invention. There are no extra points for growing headcount, budget size, or fixed expense.

Leaders focus on the key inputs for their business and deliver them with the right quality and in a timely fashion. Despite setbacks, they rise to the occasion and never settle.

“Good intentions don’t work. Mechanisms do.” No company can rely on good intentions like “We must try harder!” or “Next time remember to…” to improve a process, solve a problem, or fix a mistake. That’s because people already had good intentions when the problems cropped up in the first place. Amazon realized early on that if you don’t change the underlying condition that created a problem, you should expect the problem to recur.

Amazon’s planning for the calendar year begins in the summer. It’s a painstaking process that requires four to eight weeks of intensive work for the managers and many staff members of every team in the company. This intensity is deliberate, because a poorly defined plan—or worse, no plan at all—can incur a much greater downstream cost.

The main components of an OP1 narrative are: Assessment of past performance, including goals achieved, goals missed, and lessons learned Key initiatives for the following year A detailed income statement Requests (and justifications) for resources, which may include things like new hires, marketing spend, equipment, and other fixed assets

Sometimes a team may be asked to rework its plan and re-present it until there’s agreement between the top-down goals and bottom-up plan.

The OP1 process runs through the fall and is completed before the fourth-quarter holiday rush begins. In January, after the holiday season ends, OP1 is adjusted as necessary to reflect the fourth-quarter results, as well as to update the trajectory of the business. This shorter process is called OP2, and it generates the plan of record for the calendar year.

OP2 aligns each group with the goals of the company. Everybody knows their overall objectives, including targets for revenue, cost, and performance. The metrics are agreed upon and will be supplied as part of every team’s deliverables. OP2 makes it crystal clear what each group has committed to do, how they ...

During OP1, as the S-Team reads and reviews the various operating plans, they select the initiatives and goals from each team that they consider to be the most important to achieve. These selected goals are called, unsurprisingly, S-Team goals. In other words, my (Bill’s) team working on Amazon Music might have had 23 goals and initiatives in our 2012 operating plan. After reviewing our plan with us, the S-Team might have chosen six of the 23 to become S-Team goals. The music team would still have worked to achieve all 23 goals, but it would be sure to make resource allocation decisions throughout the year to prioritize the six S-Team goals ahead of the remaining 17.

S-Team goals are mainly input-focused metrics that measure the specific activities teams need to perform during the year that, if achieved, will yield the desired business results.

“Leaders operate at all levels, stay connected to the details, audit frequently, and are skeptical when metrics and anecdotes differ. No task is beneath them.”

the compensation of Amazon S-Team members and all senior leaders is heavily weighted toward equity earned over a period of several years. The maximum salary itself is set well below that of industry peers in the United States. When we were there, the maximum base salary for any employee was $160,000 (indications are that this remains true). Some new executive hires may receive a signing bonus, but the bulk of their compensation—and the potentially enormous upside—is the long-term value of the company.

In seeking short-term targets to maximize compensation, some may intentionally push revenue from one time period to the next, cannibalizing future results and obscuring current challenges.

Long-term stock-based compensation incentives, by comparison, eliminate such selfish and costly decisions by making them nonsensical.

Many companies set entirely independent goals for key players at every level. All too often this gives rise to infighting, information withholding, and hoarding of resources, as each leader is incentivized to undermine the other.

Sometimes it is okay to lose people who have a short-term focus while retaining those who are in it for the long term.

“Organizational culture comes about in one of two ways. It’s either decisively defined, nurtured and protected from the inception of the organization; or—more typically—it comes about haphazardly as a collective sum of the beliefs, experiences and behaviors of those on the team. Either way, you will have a culture. For better or

The Amazon Bar Raiser program has the goal of creating a scalable, repeatable, formal process for consistently making appropriate and successful hiring decisions.

It is true that an excellent interviewer will have a keen instinct for who might make a great hire, as well as the ability to ignore biases that arise during the interview process. The problem with relying on a few gifted interviewers is that it doesn’t scale and it’s hard to teach.

Many would ask if exceptions could be made. But of course, this was part of the problem—hiring almost always felt urgent. We know of no instances where managers were allowed to take shortcuts. Successful managers would quickly realize that they had to devote a considerable amount of their time to the process and would redouble their efforts to source, recruit, and hire candidates who were Amazonian.

There are eight steps in the Bar Raiser hiring process: Job Description Résumé Review Phone Screen In-House Interview Written Feedback Debrief/Hiring Meeting Reference Check Offer Through Onboarding

Sometimes the hiring manager isn’t sure about a candidate but still invites them to go through the interview loop, hoping that this will assist in the hiring decision. This is a mistake. In most cases, the questionable candidate will not get the job, and a lot of time will have been wasted in the process.

There are many variables (the role, the hiring manager, the volume and quality of candidate résumés screened) that affect the rate at which candidates pass the phone screen and are brought in for the in-house interview, but one in four is a reasonable average.

Amazon tracks and reports on the volume and rate at which candidates pass through the entire recruiting funnel and uses these data to make process changes as well as to coach and train recruiters and hiring managers. This is the hallmark of a well-run recruiting process.

Typically, the most effective loops consist of five to seven interviewers. The company has found that the returns on having more people than that involved tend to diminish, and that when there are fewer people involved, there are often gaps in knowledge about the candidate. Whatever the exact number of participants, the loop always includes the hiring manager, the recruiter, and a Bar Raiser.

After training, the interviewer is required to pair up with an experienced senior interviewer to jointly conduct at least one real interview before they do one on their own.

There are two distinctive features in an Amazon in-house interview loop: behavioral interviewing and Bar Raiser.

Managers and interviewers soon learned that the basic information about the candidate—the details of education and employment—are less reliable predictors of the candidate’s ability to work in accord with the Amazon principles.

we adopted a technique called Behavioral Interviewing. This involves assigning one or more of the 14 Leadership Principles to each member of the interview panel, who in turn poses questions that map to their assigned leadership principle, seeking to elicit two kinds of data. First, the interviewer wants the candidate to provide detailed examples of what they personally contributed to solving hard problems or how they performed in work situations like the ones they will experience at Amazon. Second, the interviewer wants to learn how the candidate accomplished their goals and whether their methods align with the Amazon Leadership Principles.

“Can you give me an example of a time when your team proposed to launch a new product or initiative and you pushed back on their plan because you didn’t think it was good enough?”

The method that Amazon interviewers use for drilling down goes by the acronym STAR (Situation, Task, Action, Result): “What was the situation?” “What were you tasked with?” “What actions did you take?” “What was the result?”

Other questions that can reveal this information include “If you were assigned to work on a different project instead of Project X, what would have changed about Project X?” and “What was the toughest call on Project X, and who made it?”

written feedback is essential to an effective hiring process, and this means that every interviewer must take detailed notes—as close to a verbatim record as possible. Some interviewers create a document with the questions, which they use to record notes.

The notes are the record of the data you gather in the interview, and you will use these notes to develop the written feedback you’ll give to your fellow interviewers. If you do not take complete and detailed notes, expect a visit from your Bar Raiser.

The meeting begins with everyone reading all the interview feedback. Afterward, the Bar Raiser may kick off the meeting by asking the group, “Now that everyone has had a chance to read all the feedback, would anyone like to change their vote?”

an effective Bar Raiser shares the right examples from the interview transcripts and asks the right probing questions of the interview panel and hiring manager to help them see why a candidate doesn’t meet or raise the bar.

The hiring manager, not the recruiter, then calls the references to further explore and confirm the candidate’s skills and past performance. One question that often gets a telling response is, “If given the chance, would you hire this person again?” Another is, “Of the people you have managed or worked with, in what percentile would you place this candidate?”

At many companies, the hiring manager has the recruiter make the offer. This is another mistake. The hiring manager should personally make the offer and sell him/her on the role and company. You may have chosen the candidate, but that doesn’t mean the candidate has chosen you.

the Amazon hiring process has a flywheel effect—it pays greater and greater dividends the longer it is used.

Ideally, the bar continues to be set higher, so much that, eventually, employees should be able to say to themselves, “I’m glad I joined when I did. If I interviewed for a job today, I’m not sure I’d be hired!”

“The best way to fail at inventing something is by making it somebody’s part-time