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Jeff wrote, “When I interview people I tell them, ‘You can work long, hard, or smart, but at Amazon.com
you can’t choose two out of three.’”
he could be present for decisions big and small; and he could formulate and apply principles like customer obsession, innovation, frugality, personal ownership, bias for action, and high standards. But new employees—who in the beginning had each been hired personally
If, for example, a person spoke up at a meeting and suggested an idea that was obviously geared toward short-term considerations and ignored significant longer-term ones, or proposed something that was competitor- rather than customer-centric, there would be an uncomfortable pause before someone pointed out what was on everyone else’s mind. While this practice may not be unique to Amazon, it is a defining element of its success.
CEO of Amazon’s Worldwide Consumer business, insisted on data-driven decision-making and frequent auditing from everyone he worked with, and this became the basis of the leadership principle Dive Deep.
In fact, if a company’s principles must be memorized, it’s a warning sign that they aren’t sufficiently woven into the fabric of that company. We know and remember Amazon’s principles because they are the basic framework used for making decisions and taking action.
Review huddled values
Amazon’s Leadership Principles6
Bias for Action. Speed matters in business. Many decisions and actions are reversible and do not need extensive study. We value calculated risk-taking.
There’s a saying often heard at Amazon: “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.
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
Bryan spend for next 6m
The Frugality leadership principle makes the reason very plain: “There are no extra points for headcount, budget size, or expense.” One clear downside to this approach is that other companies with deep pockets can try to hire away your best employees with big cash offers. It’s true, some employees leave for a short-term jump in their cash compensation. But on the positive side, Amazon’s approach reinforces the kind of culture it seeks to develop. Sometimes it is okay to lose people who have a short-term focus while retaining those who are in it for the long term.
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.
Define this process and what it means for hudled
The name was intended to signal to everyone involved in the hiring process that every new hire should “raise the bar,” that is, be better in one important way (or more) than the other members of the team they join. The theory held that by raising the bar with each new hire, the team would get progressively stronger and produce increasingly powerful results. The Bar Raiser could not be the hiring manager or a recruiter. The Bar Raiser
upset if they are excluded from the process, but it is a mistake for direct reports to interview a prospective boss. It’s uncomfortable for the candidate during the interview, and the direct report will learn about the candidate’s weaknesses, and other employees’ views of those weaknesses, during the debrief—which could lead to problems for the future functioning of the team.
anyone like to change their vote?” The reason for this is that each interviewer submitted their vote based on only the data that they gathered in their interview. In a five-person interview loop, this means that the initial vote is given while in possession of one-fifth of the data.
“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?”
A small group would screen all the NPI submissions. A project could be cut in the first round if it wasn’t thoroughly explained, didn’t address a core company goal, didn’t represent an acceptable cost/benefit ratio, or obviously wouldn’t make the cut.
Be monitored in real time. A team’s real-time score on its fitness function would be displayed on a dashboard next to all the other two-pizza teams’ scores.
Be self-funding. The team’s work will pay for itself.
Jeff suggested that “most decisions should probably be made with somewhere around 70% of the information you wish you had. If you wait for 90%, in most cases, you’re probably being slow. Plus, either way, you need to be good at quickly recognizing and correcting bad decisions. If you’re good at course correcting, being wrong may be less costly than you think,
commitment to thinking deeply and correctly about our opportunities. The old essay-writing adage “State, support, conclude” forms the basis for putting a convincing argument forward. Successful narratives will connect the dots for the reader and thus create a persuasive argument, rather than presenting a disconnected stream of bullet points and graphics that leave the audience to do all the work.
key tenets that our proposal relies upon—a foundational element of the reasoning that led us to make this recommendation. Tenets give the reader an anchor point from which to evaluate the rest.
An Amazon quarterly business review, for instance, might be broken down like this instead: Introduction Tenets Accomplishments Misses Proposals for Next Period Headcount P&L FAQ Appendices (includes things like supporting data in
Suppose your research into Melinda leads you to conclude that to realize the largest possible TAM, you need to offer the product at no more than $99. The bill of materials (BOM), however, comes to $250. Now you have two choices to suggest. First, alter the specs, strip out features, or take other actions that will reduce the BOM to below $99. Second, construct a financial plan that shows heavy losses in the early days of release, but also shows that the losses can eventually be mitigated with BOM reductions as the product achieves scale or can be enhanced with some additional source of revenue
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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
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the percentage of detail page views where the products were in stock (you don’t get credit if you add items but can’t keep them in stock), which was ultimately finalized as the percentage of detail page views where the products were in stock and immediately ready for two-day shipping, which ended up being called Fast Track In Stock.
In other words, his first action was not a “what” decision, it was a “who” and “how” decision. This is an incredibly important difference. Jeff did not jump straight to focusing on what product to build, which seems like the straightest line from A to
