Working Backwards Quotes

“Our third-quarter financial results released on October 21, 2004, showed that sales had grown by 29 percent year over year. Free cash flow had increased by 76 percent. Many corporations would look at such growth figures with envy, but a closer look at our financials at the time revealed a more concerning picture. Throughout 2004, Amazon sales had continued to grow, but the rate of growth decreased from the prior year, across all lines of business. The output metric of sales revenue was not growing as fast as we wanted.”
― Colin Bryar, Working Backwards: Insights, Stories, and Secrets from Inside Amazon

“The good news is that you don’t need a Jeff to make this type of decision. You only need to ruthlessly stick to the simple-to-understand (but sometimes hard-to-follow) principles and process that insist on customer obsession, encourage thinking long term, value innovation, and stay connected to the details. None of us, including Jeff, knew exactly what we would end up building; it’s more like we stuck with the process and surrendered to where it was taking us. Prime was a perfect example of the multicausal, nonlinear way in which business initiatives both major and minor got decided on and executed at Amazon. Correspondingly, we can’t tell a linear story of how we came up with Prime because there isn’t one. Instead, this chapter will reflect that there were a lot of little tributaries that emptied into the river of Prime.”
― Colin Bryar, Working Backwards: Insights, Stories, and Secrets from Inside Amazon

“Option one would be the skills-forward path—that is, using the existing skills and assets of the company to drive business opportunities. Leaders at most companies would likely be praised for choosing this path. The danger is that while they stand atop this local optimum, someone else will figure out how to scale a higher peak they couldn’t see at the time due to risk aversion.”
― Colin Bryar, Working Backwards: Insights, Stories, and Secrets from Inside Amazon

“Our core competencies did not extend to either end of the value chain. Steve did not let this get in the way. In one of our meetings, he said that a typical company that wanted to grow would take stock of its existing capabilities and ask, “What can we do next with our skill set?” He emphasized that Amazon’s approach was always to start from the customer and work backwards. We would figure out what the customers’ needs were and then ask ourselves, “Do we have the skills necessary to build something that meets those needs? If not, how can we build or acquire them?” Once we determined what was necessary to create value for our customers and to differentiate ourselves from our competitors, we didn’t let our lack of ability deter us from achieving this important end result—our own device.”
― Colin Bryar, Working Backwards: Insights, Stories, and Secrets from Inside Amazon

“He explained to Steve that there was an important difference in the digital media value chain as well. In physical retail, Amazon operated at the middle of the value chain. We added value by sourcing and aggregating a vast selection of goods, tens of millions of them, on a single website and delivering them quickly and cheaply to customers. To win in digital, because those physical retail value adds were not advantages, we needed to identify other parts of the value chain where we could differentiate and serve customers well. Jeff told Steve that this meant moving out of the middle and venturing to either end of the value chain. On one end was content, where the value creators were book authors, filmmakers, TV producers, publishers, musicians, record companies, and movie studios. On the other end was distribution and consumption of content. In digital, that meant focusing on applications and devices consumers used to read, watch, or listen to content, as Apple had already done with iTunes and the iPod. We all took note of what Apple had achieved in digital music in a short period of time and sought to apply those learnings to our long-term product vision.”
― Colin Bryar, Working Backwards: Insights, Stories, and Secrets from Inside Amazon

“By mid-2005, Steve had hired leaders of the appropriate level and expertise to run each element of our product and business vision and had modified the org structure to accommodate them. With each modification, the scope of each leader’s responsibilities would become narrower, but the intended scale of each role was greater. At most companies, reducing a leader’s scope would be considered a demotion, and in fact there were many VPs and directors who saw each of these changes in that way. At Amazon, it was not a demotion. It was a signal that we were thinking big and investing in digital for the long term.”
― Colin Bryar, Working Backwards: Insights, Stories, and Secrets from Inside Amazon

“The invention approach required the endurance to evaluate and discard many options and ideas. So, as we were considering which path to take—build or buy—we took countless meetings with different companies in the digital media business. In addition to enabling us to understand our options for potential acquisition, it was a productive way for us to get up to speed quickly on different aspects of the digital media business, as the founders and leaders of these companies shared their experience and insights from working on a variety of product challenges. In parallel, we were writing some of our first PR/FAQs for digital media products, which we would review and discuss with Jeff. The two processes reinforced one another, and by the end of 2004, our thinking and vision had become clearer. As”
― Colin Bryar, Working Backwards: Insights, Stories, and Secrets from Inside Amazon

“Jeff would reject what he saw as copycat thinking, emphasizing again and again that whatever music product we built, it had to offer a truly unique value proposition for the customer. He would frequently describe the two fundamental approaches that each company must choose between when developing new products and services. We could be a fast follower—that is, make a close copy of successful products that other companies had built—or we could invent a new product on behalf of our customers. He said that either approach is valid, but he wanted Amazon to be a company that invents.”
― Colin Bryar, Working Backwards: Insights, Stories, and Secrets from Inside Amazon

“At that time Amazon decidedly did not have billions to spend on digital media or anything else, so we would need to lean heavily on the Frugality principle to stay in the game with the bigger players.”
― Colin Bryar, Working Backwards: Insights, Stories, and Secrets from Inside Amazon

“While it is tempting to suggest the meeting impacted Jeff’s thinking, only Jeff can speak to that. What we can say is what Jeff did and did not do afterward. What he didn’t do (and what many companies would have done) is to kick off an all-hands-on-deck project to combat this competitive threat, issue a press release claiming how Amazon’s new service would win the day, and race to build a copycat digital music service. Instead, Jeff took time to process what he learned from the meeting and formed a plan. A few months later, he appointed a single-threaded leader—Steve Kessel—to run Digital, who would report directly to him so that they could work together to formulate a vision and a plan for digital media. In other words, his first action was not a “what” decision, it was a “who” and “how” decision.”
― Colin Bryar, Working Backwards: Insights, Stories, and Secrets from Inside Amazon

“Over our long march to building Amazon’s digital business, we proved a powerful lesson: it takes exceptionally patient and unwavering leadership to persevere through the prolonged process of building a new business and navigating through transformative times in an established industry with entrenched interests. The fact that we entered as total beginners and emerged as industry leaders is in no small part a result of our adherence to being Amazonian in our principles and our way of thinking, including thinking big, thinking long-term, being obsessed with customers, being willing to be misunderstood for long periods of time, and being frugal—principles that few companies are capable of maintaining in the face of quarterly reporting requirements and the daily gyrations of the stock market.”
― Colin Bryar, Working Backwards: Insights, Stories, and Secrets from Inside Amazon

“Big companies tend to develop a decision-making process that is designed to manage one-way door decisions, precisely because poor decisions can lead to big problems, even disaster. The process is typically slow, cumbersome, and riddled with risk aversion. This process tends to become the dominant one in large companies, and it is routinely, almost thoughtlessly, applied to two-way door decisions. The result is reduced speed, impaired idea generation, stifled innovation, and longer development cycles.”
― Colin Bryar, Working Backwards: Insights, Stories, and Secrets from Inside Amazon

“As a company grows larger, it can become more difficult to keep the invention machine humming, and one impediment is “one-size-fits-all” decision-making. In the same 2015 shareholder letter, Jeff wrote, “Some decisions are consequential and irreversible or nearly irreversible—one-way doors—and these decisions must be made methodically, carefully, slowly, with great deliberation and consultation. If you walk through and don’t like what you see on the other side, you can’t get back to where you were before. We can call these Type 1 decisions. But most decisions aren’t like that—they are changeable, reversible—they’re two-way doors. If you’ve made a suboptimal Type 2 decision, you don’t have to live with the consequences for that long. You can reopen the door and go back through. Type 2 decisions can and should be made quickly by high judgment individuals or small groups.” Prime was a two-way door decision. If Prime’s particular combination of subscription, free shipping, and quick delivery had not worked, we’d have kept tinkering with the formula until we got it right.”
― Colin Bryar, Working Backwards: Insights, Stories, and Secrets from Inside Amazon

“When we have invented, our long-term, patient approach—driven by customer need—has been fundamentally different from the more conventional “skills-forward” approach to invention, in which a company looks for new business opportunities that neatly fit with its existing skills and competencies. While this approach can be rewarding, there is a fundamental problem with it: the company will never be driven to master new skills and develop new competencies, hire new kinds of leaders, or create different types of organizations. Amazon’s Working Backwards process—starting with customer needs, not corporate needs or competencies—often demands that, in Jeff’s words, we “exercise new muscles, never mind how uncomfortable and awkward-feeling those first steps might be.”
― Colin Bryar, Working Backwards: Insights, Stories, and Secrets from Inside Amazon

“Invention is not the solution to every problem. For instance, when Amazon started, the company did not create its own computer hardware. On the flip side, when we were planning our e-book business, we decided to get into the hardware game with Kindle. The reason: invention works well where differentiation matters. In the company’s early days, the hardware that powered Amazon’s data centers was not the point of differentiation with the customer—creating a compelling book-buying online experience was. Whereas with Kindle, as we will describe in chapter seven, others were selling e-books, so there was real value in owning and controlling the creation of an outstanding device for our customers to read them on. Differentiation with customers is often one of the key reasons to invent.”
― Colin Bryar, Working Backwards: Insights, Stories, and Secrets from Inside Amazon

“The other key is frugality. You can’t afford to pursue inventions for very long if you spend your money on things that don’t lead to a better customer experience, like trade show booths, big teams, and splashy marketing campaigns. Amazon Music and Prime Video are examples of how we kept our investment manageable for many years by being frugal: keeping the team small, staying focused on improving the customer experience, limiting our marketing spend, and managing the P&L carefully. Once we had a clear product plan and vision for how these products could become billion-dollar businesses that would delight tens, even hundreds of millions of consumers, we invested big. Patience and carefully managed investment over many years can pay off greatly.”
― Colin Bryar, Working Backwards: Insights, Stories, and Secrets from Inside Amazon

“Amazon’s approach to metrics embodies the Customer Obsession leadership principle. The relevance of Customer Obsession becomes evident in the company’s focus on input versus output metrics. If you look at the input metrics for Amazon, they often describe things customers care about, such as low prices, lots of available products, fast shipping, few customer service contacts, and a speedy website or app. A lot of the output metrics, such as revenue and free cash flow, are what you’d typically see in a company’s financial report. Customers don’t care about those. But as we stated at the beginning of this book, Amazon has an unshakable conviction that the long-term interests of shareowners are perfectly aligned with the interests of customers. Controllable input metrics are a quantitative (diving deep with data) and qualitative (anecdotes) way of measuring how well the organization is satisfying these customer interests so that the output metrics trend the way the company desires.”
― Colin Bryar, Working Backwards: Insights, Stories, and Secrets from Inside Amazon

“The Earn Trust leadership principle exists in part to prevent this behavior from occurring. It states, “Leaders listen attentively, speak candidly, and treat others respectfully. They are vocally self-critical, even when doing so is awkward or embarrassing. Leaders do not believe their or their team’s body odor smells of perfume. They benchmark themselves and their teams against the best.” But these meetings, in the early days, clearly exemplified where we failed to live up to that principle. The original, well-intentioned meeting was set up to improve the software systems from one week to the next. But it gained a life of its own, and sometimes turned a roomful of smart people with probing questions into an angry mob, devouring those who could make a difference and robbing them of their very will to succeed.”
― Colin Bryar, Working Backwards: Insights, Stories, and Secrets from Inside Amazon

“Mistakes should be a learning experience for all. If people become afraid of pointing out their own mistakes because they will feel humiliated in front of their peers, it’s human nature for them to do whatever they can to hide those mistakes in future meetings. Variances that get glossed over are lost learning opportunities for everybody. To prevent this, mistakes should be acknowledged as a chance to take ownership, understand the root cause, and learn from the experience. Some tension is unavoidable and appropriate, but we think it’s better to establish a culture where it’s not just okay, it’s actually encouraged to openly discuss mistakes.”
― Colin Bryar, Working Backwards: Insights, Stories, and Secrets from Inside Amazon

“success demands an environment where people don’t feel intimidated when talking about something that went wrong in their area.”
― Colin Bryar, Working Backwards: Insights, Stories, and Secrets from Inside Amazon

“We keep operational and strategic discussions separate The WBR is a tactical operational meeting to analyze performance trends of the prior week. At Amazon, it was not the time to discuss new strategies, project updates, or upcoming product releases.”
― Colin Bryar, Working Backwards: Insights, Stories, and Secrets from Inside Amazon

“Sometimes even the well prepared are hit with a question to which the right answer isn’t immediately apparent. In that case, the owner is expected to say something like, “I don’t know. We are still analyzing the data and will get back to you.” This is preferable to guessing, or worse, making something up on the fly.”
― Colin Bryar, Working Backwards: Insights, Stories, and Secrets from Inside Amazon

“We focus on variances and don’t waste time on the expected People like talking about their area, especially when they’re delivering as expected, and even more so when they exceed expectations, but WBR time is precious. If things are operating normally, say “Nothing to see here” and move along. The goal of the meeting is to discuss exceptions and what is being done about them. The status quo needs no elaboration.”
― Colin Bryar, Working Backwards: Insights, Stories, and Secrets from Inside Amazon

“The WBR is an important embodiment of how metrics are put into action at Amazon, but it isn’t the only one. Metrics dashboards and reports are established by every engineering, operations, and business unit at the company. In many cases metrics are monitored in real time, and each critical technical and operational service receives an “alarm” to ensure that failures and outages are identified instantly. In other cases, teams rely on dashboards that are updated hourly or daily for their metrics.”
― Colin Bryar, Working Backwards: Insights, Stories, and Secrets from Inside Amazon

“It is worth noting here that, at Amazon, even the most senior executives review the full WBR deck of metrics, including all the inputs and outputs. Metrics—as well as anecdotes about the customer experience—are the area where the leadership principle Dive Deep is most clearly demonstrated by senior leaders. They carefully examine the trends and changes in the metrics; audit incidents, failures, and customer anecdotes; and consider whether the input metrics should be updated in some way to improve the outputs.”
― Colin Bryar, Working Backwards: Insights, Stories, and Secrets from Inside Amazon

“The deck is usually owned by someone in finance. Or more accurately, the data in the deck are certified as accurate by finance.”
― Colin Bryar, Working Backwards: Insights, Stories, and Secrets from Inside Amazon

“What happens inside the WBR is critical execution not normally visible outside the company. A well-run WBR meeting is defined by intense customer focus, deep dives into complex challenges, and insistence on high standards and operational excellence. One may wonder, at what level is it appropriate for executives to shift focus to output metrics? After all, companies and their senior executives are routinely judged by output metrics like revenue and profit. Jeff knows this well, in part based on his time spent working at a Wall Street investment firm. The simple answer is that the focus does not shift at any level of management. Yes, executives know their output metrics backward and forward. But if they don’t continue to focus on inputs, they lose control over and visibility into the tools that generate output results.”
― Colin Bryar, Working Backwards: Insights, Stories, and Secrets from Inside Amazon

“Graphs show two or more timelines, for example, trailing 6-week and trailing 12-month. Trend lines for the short term can magnify small but important issues that are hard to spot when averaged out over longer periods.”
― Colin Bryar, Working Backwards: Insights, Stories, and Secrets from Inside Amazon

“normally and performance is not degrading over time. As your fundamental understanding of what drives the business improves, it’s common for the WBR to become an exception-based meeting rather than a regular one for discussing each and every metric.”
― Colin Bryar, Working Backwards: Insights, Stories, and Secrets from Inside Amazon

“Perhaps the most widely used technique at Amazon for these situations is the Correction of Errors (COE) process, based upon the “Five Whys” method developed at Toyota and used by many companies worldwide. When you see an anomaly, ask why it happened and iterate with another “Why?” until you get to the underlying factor that was the real culprit. This COE process requires the team who had a significant error or problem to write a document describing the problem or error, and to drill down on what caused it by asking and answering “Why?” five times in order to get to the true root cause.”
― Colin Bryar, Working Backwards: Insights, Stories, and Secrets from Inside Amazon