Today's Reading

INTRODUCTION

To say that Amazon is an unconventional company is an understatement. Its most significant initiatives have often been criticized and even derided as folly. One business pundit dubbed it "Amazon. toast."1 Time and again, Amazon has proved the doubters wrong. Established competitors and aspiring newcomers have studied the company from the outside, hoping to uncover the secrets of its success and build upon them. Though many have adopted one or more of its famous principles and practices, even Amazon's most fervent believers haven't managed to duplicate the culture of innovation that continues to drive the company further into the lead.

Of course, the company has also come under scrutiny, even under fire, for some of its business methods. Some take issue with its impact on the business world and even on our society as a whole.*

* In his shareholder letter of April 16, 2020, shortly after the outbreak of the coronavirus pandemic, Jeff Bezos did address Amazon's impact on multiple fronts. He described the company's efforts to answer the increased demand on Amazon's services by people in lockdown. He described safety measures at fulfillment centers, an accelerated Amazon program to ramp up testing, and the partnership of Amazon Web Services with the WHO and other health organizations. He announced a two-dollar increase in Amazon's minimum wage, and the doubling of its overtime pay. The letter also outlined the company's Climate Pledge—to move to 80 percent renewable energy by 2024 and to achieve net zero carbon by 2040.

These issues are obviously important, both because they affect the lives of people and communities and because, increasingly, failure to address them can have a serious reputational and financial impact on a company. But they are beyond the scope of what we can cover in-depth in this book, which is primarily about showing you some of the unique principles and processes at Amazon with enough detail that you will be able to implement them if you choose to.

We spent a combined total of 27 years at Amazon, and we were there for some of the most pivotal moments of its development and growth. Any time either of us mentions that we worked at the company, we are immediately asked some version of a question that tries to get at the essential causes of its singular success. Analysts, competitors, and even customers have tried to sum it up in terms of the Amazon business model or corporate culture, but the simplest and best distillation is still that of founder Jeff Bezos (hereafter referred to as Jeff): "We have an unshakeable conviction that the long-term interests of shareowners are perfectly aligned with the interests of customers."2 In other words, while it's true that shareholder value stems from growth in profit, Amazon believes that long-term growth is best produced by putting the customer first.

If you held this conviction, what kind of company would you build? 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."

That description has held true since Amazon's earliest days. In its first shareholder letter back in 1997, Amazon's first year as a public company, you'll find the phrases "Obsess Over Customers," "It's All About the Long Term," and "We will continue to learn from both our successes and our failures." One year later the term "Operational Excellence" entered the discussion, completing the four-faceted description of Amazon's corporate culture that endures today. Over the ensuing years, the wording has been tweaked to reflect lessons learned and scars earned, but Amazon has never wavered in its commitment to these four core principles. And they are in large part the reason that in 2015 Amazon became the company that reached $100 billion in annual sales faster than any other in the world. Remarkably, that same year Amazon Web Services (AWS) was reaching $10 billion in annual sales—at an even faster pace than the one Amazon had set.

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.

Many of the business problems that Amazon faces are no different from those faced by every other company, small or large. The difference is how Amazon keeps coming up with uniquely Amazonian solutions to those problems. Taken together, these elements combine to form a way of thinking, managing, and working that we refer to as being Amazonian, a term that we coined for the purposes of this book. Both of us, Colin and Bill, were "in the room," and—along with other senior leaders—we shaped and refined what it means to be Amazonian. We both worked extensively with Jeff and were actively involved in creating a number of Amazon's most enduring successes (not to mention some of its notable flops) in what was the most invigorating professional experience of our lives.
...

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Today's Reading

INTRODUCTION

To say that Amazon is an unconventional company is an understatement. Its most significant initiatives have often been criticized and even derided as folly. One business pundit dubbed it "Amazon. toast."1 Time and again, Amazon has proved the doubters wrong. Established competitors and aspiring newcomers have studied the company from the outside, hoping to uncover the secrets of its success and build upon them. Though many have adopted one or more of its famous principles and practices, even Amazon's most fervent believers haven't managed to duplicate the culture of innovation that continues to drive the company further into the lead.

Of course, the company has also come under scrutiny, even under fire, for some of its business methods. Some take issue with its impact on the business world and even on our society as a whole.*

* In his shareholder letter of April 16, 2020, shortly after the outbreak of the coronavirus pandemic, Jeff Bezos did address Amazon's impact on multiple fronts. He described the company's efforts to answer the increased demand on Amazon's services by people in lockdown. He described safety measures at fulfillment centers, an accelerated Amazon program to ramp up testing, and the partnership of Amazon Web Services with the WHO and other health organizations. He announced a two-dollar increase in Amazon's minimum wage, and the doubling of its overtime pay. The letter also outlined the company's Climate Pledge—to move to 80 percent renewable energy by 2024 and to achieve net zero carbon by 2040.

These issues are obviously important, both because they affect the lives of people and communities and because, increasingly, failure to address them can have a serious reputational and financial impact on a company. But they are beyond the scope of what we can cover in-depth in this book, which is primarily about showing you some of the unique principles and processes at Amazon with enough detail that you will be able to implement them if you choose to.

We spent a combined total of 27 years at Amazon, and we were there for some of the most pivotal moments of its development and growth. Any time either of us mentions that we worked at the company, we are immediately asked some version of a question that tries to get at the essential causes of its singular success. Analysts, competitors, and even customers have tried to sum it up in terms of the Amazon business model or corporate culture, but the simplest and best distillation is still that of founder Jeff Bezos (hereafter referred to as Jeff): "We have an unshakeable conviction that the long-term interests of shareowners are perfectly aligned with the interests of customers."2 In other words, while it's true that shareholder value stems from growth in profit, Amazon believes that long-term growth is best produced by putting the customer first.

If you held this conviction, what kind of company would you build? 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."

That description has held true since Amazon's earliest days. In its first shareholder letter back in 1997, Amazon's first year as a public company, you'll find the phrases "Obsess Over Customers," "It's All About the Long Term," and "We will continue to learn from both our successes and our failures." One year later the term "Operational Excellence" entered the discussion, completing the four-faceted description of Amazon's corporate culture that endures today. Over the ensuing years, the wording has been tweaked to reflect lessons learned and scars earned, but Amazon has never wavered in its commitment to these four core principles. And they are in large part the reason that in 2015 Amazon became the company that reached $100 billion in annual sales faster than any other in the world. Remarkably, that same year Amazon Web Services (AWS) was reaching $10 billion in annual sales—at an even faster pace than the one Amazon had set.

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.

Many of the business problems that Amazon faces are no different from those faced by every other company, small or large. The difference is how Amazon keeps coming up with uniquely Amazonian solutions to those problems. Taken together, these elements combine to form a way of thinking, managing, and working that we refer to as being Amazonian, a term that we coined for the purposes of this book. Both of us, Colin and Bill, were "in the room," and—along with other senior leaders—we shaped and refined what it means to be Amazonian. We both worked extensively with Jeff and were actively involved in creating a number of Amazon's most enduring successes (not to mention some of its notable flops) in what was the most invigorating professional experience of our lives.
...

Join the Library's Online Book Clubs and start receiving chapters from popular books in your daily email. Every day, Monday through Friday, we'll send you a portion of a book that takes only five minutes to read. Each Monday we begin a new book and by Friday you will have the chance to read 2 or 3 chapters, enough to know if it's a book you want to finish. You can read a wide variety of books including fiction, nonfiction, romance, business, teen and mystery books. Just give us your email address and five minutes a day, and we'll give you an exciting world of reading.

What our readers think...