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

by Colin Bryar

In a talk at the 2018 Air, Space and Cyber Conference, Jeff described Amazon this way: “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.”

Of course, these four cultural touchstones don’t quite get at the “how,” that is, how people can work, individually and collectively, to ensure that they are maintained. And so Jeff and his leadership team crafted a set of 14 Leadership Principles, as well as a broad set of explicit, practical methodologies, that constantly reinforce its cultural goals. These include: 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.

We became friends through my wife, Lynn, and Colin’s wife, Sarah, who became close friends when they both landed on the Amazon Toys category team in 2000 after earning their MBAs. Our friendship grew through our mutual love of golf and regular trips to play Bandon Dunes. We decided to write this book in 2018, when we observed two trends. The first was that Amazon’s popularity had exploded, having become omnipresent in the media. People clearly craved to learn more about Amazon. The second was that Amazon was consistently misunderstood, which we experienced during our years on the inside. Wall Street analysts couldn’t comprehend why Amazon didn’t make a profit, as the company reinvested its cash in new products to drive future growth. And the press was often baffled by and critical of each new Amazon product, including Kindle, Prime, and Amazon Web Services.

After reading this book, we hope you’ll see that being Amazonian is not a mystical leadership cult but a flexible mindset. You can take the elements that you need as you need them, then tweak and customize them as conditions warrant. The concept also has a wonderful fractal quality, meaning it can add benefit at any scale. We have witnessed the successful adoption of these elements across companies ranging from a ten-person startup to a global enterprise with hundreds of thousands of employees.

In the first half of this book, we will lay out in detail some of the crucial principles and processes that define being Amazonian. These ways of working—patiently honed over the years—have enabled Amazon’s remarkable efficiency and its record-breaking growth. They have made Amazon’s culture one in which invention thrives and delighting customers is highly prioritized. We will tell some of the origin stories of these principles and processes to demonstrate that they were solutions to problems that were impeding our ability to invent freely and satisfy our customers consistently.

Leadership Principles and Mechanisms The development of the 14 Amazon Leadership Principles. How they’re infused into everyday work. Checks and balances (mechanisms) reinforce them. Why they confer a significant competitive advantage. How they can be applied in your company.

Another of Jeff’s frequent exhortations to his small staff was that Amazon should always underpromise and overdeliver, to ensure that customer expectations were exceeded. One example of this principle was that the website clearly described standard shipping as U.S. Postal Service First-Class Mail. In actuality, all these shipments were sent by Priority Mail—a far more expensive option that guaranteed delivery within two to three business days anywhere in the United States. This was called out as a complimentary upgrade in the shipment-confirmation email. Thank-you emails for the upgrade included one that read, “You guys R going to make a billion dollars.” When Jeff saw it he roared with laughter, then printed a copy to take back to his office.

In the 2015 shareholder letter, Jeff wrote, “You can write down your corporate culture, but when you do so, you’re discovering it, uncovering it—not creating it.”4

Another important Amazonian phrase often appears alongside the Amazon Leadership Principles and key tenets: “Unless you know better ones.” This reminds people to always seek to improve the status quo.

Amazon’s Leadership Principles6 Customer Obsession. Leaders start with the customer and work backwards. They work vigorously to earn and keep customer trust. Although leaders pay attention to competitors, they obsess over customers. Ownership. Leaders are owners. They think long term and don’t sacrifice long-term value for short-term results. They act on behalf of the entire company, beyond just their own team. They never say, “that’s not my job.” Invent and Simplify. Leaders expect and require innovation and invention from their teams and always find ways to simplify. They are externally aware, look for new ideas from everywhere, and are not limited by “not invented here.” As we do new things, we accept that we may be misunderstood for long periods of time. Are Right, A Lot. Leaders are right a lot. They have strong judgment and good instincts. They seek diverse perspectives and work to disconfirm their beliefs. Learn and Be Curious. Leaders are never done learning and always seek to improve themselves. They are curious about new possibilities and act to explore them. Hire and Develop the Best. 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. We work on behalf of our people to invent mechanisms for development like Career Choice. Insist on the Highest Standards. Leaders have relentlessly high stan...

Amazon’s Unique Bar Raiser Process The importance of hiring and the steep cost of slapdash hiring processes. The failings of conventional approaches, shown in a fictional example at the “Green Corp.” The development of the Bar Raiser process and how it consistently improves the level of skill and talent throughout the company. How the Bar Raiser process can be adapted to your company.

Read the description of the "Bar Raiser" process in this chapter and then compare it with Lazslo Bock's description of how the process at Google developed in Work Rules

Amazon. Jeff often said in those days, “We want missionaries, not mercenaries.”

We will make this point again and again: Amazon has faced many of the same problems all companies face. The difference is that Amazon has come up with novel solutions that deliver a significant competitive advantage, and this is true of its approach to hiring. The Bar Raiser process was one of Amazon’s first and most successful scalable, repeatable, and teachable operational practices.

Working without the framework of a formally defined interview and hiring process, managers will often be driven by urgency, biases, and convenience rather than purpose, data, and analysis.

Brent Gleeson, a leadership coach and Navy SEAL combat veteran, writes, “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 worse.”2

Rick, Joel, and John Vlastelica, who then headed up technical recruiting for the company, set out to codify a process for hiring high-level talent that matched Amazon’s culture. From the start, they fixated on the core problem of maintaining a consistent hiring standard as the company grew. Thus, contrary to common lore, the Bar Raiser program, as it later came to be known, wasn’t a top-down initiative from Jeff but rather a response to a specific problem that needed to be addressed. Even in these early days of the company, we can see the Leadership Principles beginning to develop. Rick, Joel, and John identified a problem and devised a scalable solution,

The Amazon Bar Raiser program has the goal of creating a scalable, repeatable, formal process for consistently making appropriate and successful hiring decisions. Like all good processes, it’s simple to understand, can be easily taught to new people, does not depend on scarce resources (such as a single individual), and has a feedback loop to ensure continual improvement. The Bar Raiser hiring process became one of the earliest and most successful components of the being Amazonian toolkit.

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

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?”

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. Some enter the notes in their computer, while others write them longhand on paper or on the back of the candidate’s résumé. (At the start of the meeting, you may want to explain to the candidate that you will be taking notes and why.) 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.

Written feedback is expected to be specific, detailed, and filled with examples from the interview to address the Leadership Principles assigned to the interviewer.

In another case, a simple tweak to the Bar Raiser process generated surprisingly positive results. One director wanted to increase the gender diversity of the team. Over the ensuing quarters, the efforts were so successful that they were noticeable outside the department. When asked how they did it, the team revealed their very simple solution: every résumé received from a female applicant automatically led to a phone screen. It’s important to say that this solution did not lower the hiring bar, nor did it favor unqualified candidates on the basis of gender. If the candidate did not pass the phone screen, they would not move forward to the next step in the process. This technique made it clear that when a candidate’s name implied the gender as female, an unconscious bias had been affecting the résumé screening. The result was that well-qualified female candidates were apparently being rejected too early in the process. This director’s insightful solution provides a great example of how simple enhancements to the hiring process can improve outcomes without damaging the core principles that it was designed to protect. It’s also a good reminder to always be on the lookout for those places where bias can go undetected and undermine your results.

Separable, Single-Threaded Leadership Why coordination increases and productivity decreases as organizations grow. How Amazon combated this tendency by shifting to “separable teams with single-threaded leadership.” Why creating an organization of such teams can take time, especially in a large enterprise. How to untangle dependencies so teams can work independently.

But I noticed that in the areas where we controlled our own destiny—that is, the reporting, accounting, and payment changes, as well as our marketing plan—we were able to move fast. And in the areas where we had to make very minor changes to Obidos and acb, we moved painfully slowly. Why was that? Dependencies.

In my tenure at Amazon I heard him say many times that if we wanted Amazon to be a place where builders can build, we needed to eliminate communication, not encourage it. When you view effective communication across groups as a “defect,” the solutions to your problems start to look quite different from traditional ones.

The NPI process was deflating for morale. But figuring out how to “boost morale” is not Amazonian. Other companies have morale-boosting projects and groups with names like “Fun Club” and “Culture Committee.” They view morale as a problem to be solved by company-sponsored entertainment and social interaction. Amazon’s approach to morale was to attract world-class talent and create an environment in which they had maximum latitude to invent and build things to delight customers—and you can’t do that if every quarter some faceless process like NPI smites your best ideas. In chapter six, we discuss Amazon’s belief that focusing on controllable input metrics instead of output metrics drives meaningful growth. Morale is, in a sense, an output metric, whereas freedom to invent and build is an input metric. If you clear the impediment to building, morale takes care of itself.

Amazon ultimately invented its way around the problem by cutting off dependencies at the source.

With hundreds of these two-pizza teams eventually in place, Rick believed that we would innovate at a dazzling pace. The experiment would begin in the product development organization and, if it worked, would spread throughout the rest of the company. He laid out the defining characteristics, workflow, and management as follows.

We weren’t sure how far to take the two-pizza team concept, and at the beginning it was planned solely as a reorganization of product development. Seeing its early success in speeding up innovation, we wondered whether it might also work in retail, legal, HR, and other areas. The answer turned out to be no, because those areas did not suffer from the tangled dependencies that had hampered Amazon product development. Therefore, implementing two-pizza teams in those orgs would not increase speed.

This is great. I've read several articles about two pizza teams and how they work. But I never came across anything about where they work well or the situations where they don't work at all.

We found instead that two-pizza teams could also operate successfully in a matrix organization model, where each team member would have a solid-line reporting relationship to a functional manager who matched their job description—for example, director of software development or director of product management—and a dotted-line reporting relationship to their two-pizza manager. This meant that individual two-pizza team managers could lead successfully even without expertise in every single discipline required on their team. This functional matrix ultimately became the most common structure, though each two-pizza team still devised its own strategies for choosing and prioritizing its projects.

of another phrase you’ll hear at Amazon: be stubborn on the vision but flexible on the details.

Communicating Narratives and the Six-Pager The eerie silence at the beginning of Amazon meetings. The ban on PowerPoint and the shift to narratives. How narratives produce clear thinking and stimulate valuable discussion. How to write an effective six-pager. The payoff: the “narrative information multiplier.”

Amazon relies far more on the written word to develop and communicate ideas than most companies, and this difference makes for a huge competitive advantage.

Amazon uses two main forms of narrative. The first is known as the “six-pager.” It is used to describe, review, or propose just about any type of idea, process, or business. The second narrative form is the PR/FAQ. This one is specifically linked to the Working Backwards process for new product development. In this chapter, we’ll focus on the six-pager and in the following chapter we’ll look at the PR/FAQ.

we read and discussed an essay called “The Cognitive Style of PowerPoint: Pitching Out Corrupts Within,” by Edward Tufte, a Yale professor who is an authority on the visualization of information.1 Tufte identified in one sentence the problem we’d been experiencing: “As analysis becomes more causal, multivariate, comparative, evidence based, and resolution-intense,” he writes, “the more damaging the bullet list becomes.”

In his essay, Tufte proposed a solution. “For serious presentations,” he wrote, “it will be useful to replace PowerPoint slides with paper handouts showing words, numbers, data graphics, images together. High-resolution handouts allow viewers to contextualize, compare, narrate, and recast evidence. In contrast, data-thin, forgetful displays tend to make audiences ignorant and passive, and also to diminish the credibility of the presenter.”

and Jeff offered a short explanation of the reason behind the change. The reason writing a good 4 page memo is harder than “writing” a 20 page powerpoint is because the narrative structure of a good memo forces better thought and better understanding of what’s more important than what, and how things are related. Powerpoint-style presentations somehow give permission to gloss over ideas, flatten out any sense of relative importance, and ignore the interconnectedness of ideas.3

Edward Tufte sums up the benefits of narratives over PP with his own blunt clarity: “PowerPoint becomes ugly and inaccurate because our thoughts are foolish, but the slovenliness of PowerPoint makes it easier for us to have foolish thoughts.”

It takes practice to master the discipline of writing these narratives. First-time writers will do well to review and learn from successful examples.

Jeff has an uncanny ability to read a narrative and consistently arrive at insights that no one else did, even though we were all reading the same narrative. After one meeting, I asked him how he was able to do that. He responded with a simple and useful tip that I have not forgotten: he assumes each sentence he reads is wrong until he can prove otherwise. He’s challenging the content of the sentence, not the motive of the writer. Jeff, by the way, was usually among the last to finish reading.

Final Thoughts About Narratives

Working Backwards Start with the Desired Customer Experience Start with the customer and work backwards—harder than it sounds, but a clear path to innovating and delighting customers. A useful Working Backwards tool: writing the press release and FAQ before you build the product.

Working Backwards is a systematic way to vet ideas and create new products. Its key tenet is to start by defining the customer experience, then iteratively work backwards from that point until the team achieves clarity of thought around what to build. Its principal tool is a second form of written narrative called the PR/FAQ, short for press release/frequently asked questions.

In the end, what turned out to work best was relying on the core Amazon principle of customer obsession and a simple yet flexible way of writing narrative documents. These two elements form the Working Backwards process—starting from the customer experience and working backwards from that by writing a press release that literally announces the product as if it were ready to launch and an FAQ anticipating the tough questions. While this next section describes the evolution of Working Backwards as seen through the experience of the digital team, a handful of other teams went through a similar process. Bringing together the experience of these teams enabled us to hone and refine Working Backwards into its final form.

The great revelation of this process was not any one of the product ideas. As we’ve described in chapter four, the breakthrough was the document itself. We had freed ourselves of the quantitative demands of Excel, the visual seduction of PowerPoint, and the distracting effect of personal performance. The idea had to be in the writing.

The Features and Benefits of the PR/FAQ

Metrics Manage Your Inputs, Not Your Outputs Why metrics become more important as a company grows. The metrics life cycle. The difference between input metrics and output metrics. Making sure your metrics are unbiased. Using metrics at business reviews. The key pitfalls of the review meeting.

Shortly after that holiday season we held a postmortem, out of which was born the Weekly Business Review (WBR). The purpose of the WBR was to provide a more comprehensive lens through which to see the business. The WBR has proved very useful over the years and is widely adopted throughout the company. We’ll show how the WBR is constructed and implemented so the company can improve each and every week. It has a fractal nature that allows us to easily adapt to different situations, from small groups to billion-dollar businesses. Small teams, business category lines, and the entire online retail business all have their own WBRs. In addition to our discussion of the benefits of the WBR, we’ll point out some common mistakes in their design and execution, including a few big ones we made ourselves. Though we focus on the WBR in this chapter, the same principles and techniques can be applied wherever you need to look at data to help make informed decisions.

When the retail, operations, and finance teams began to construct the initial Amazon WBR, they turned to a well-known Six Sigma process improvement method called DMAIC, an acronym for Define-Measure-Analyze-Improve-Control.1 Should you decide to implement a Weekly Business Review for your business, we recommend following the DMAIC steps as well. The order of the steps matters. Progressing through this metrics life cycle in this order can prevent a lot of frustration and rework, allowing you to achieve your goals faster.

Since it’s a cycle, you can start at any input. The metrics for Customer Experience, for example, could include speed of shipping, breadth of selection, richness of product information, ease of use, and so forth. Watch what happens when we improve customer experience: Better customer experience leads to more traffic. More traffic attracts more sellers seeking those buyers. More sellers lead to wider selection. Wider selection enhances customer experience, completing the circle. The cycle drives growth, which in turn lowers cost structure. Lower costs lead to lower prices, improving customer experience, and the flywheel spins faster. The Amazon flywheel captures the major aspect of what makes Amazon’s retail business successful. Therefore, it should be no surprise that almost all the metrics discussed in the WBR can be categorized into one of the flywheel elements. In fact, the first page of the WBR deck has a picture of the very same flywheel above.