5 key leadership principles that catapulted Amazon to success

Amazon has evolved into a global conglomerate that dominates the retail sector since its humble 1995 launch. The tech giant has also emerged as a major player in the cloud computing scene, with over 90% of businesses now using some type of Amazon cloud computing service. 

Given the company’s stratospheric success, it is easy to see why other organizations would look to emulate its secrets to success. Now two former Amazon insiders have teamed up on the new book “Working Backwards: Insights, Stories, and Secrets from Inside Amazon,” which describes 5 of Amazon’s key leadership principles for success.

Authors Colin Bryar and Bill Carr, former vice president/chief of staff and former vice president of digital media, respectively, supported Jeff Bezos as the company grew from a startup into a global innovation powerhouse.

Bryar and Carr co-authored the new book “Working Backwards: Insights, Stories, and Secrets from Inside Amazon,” which describes five of Amazon’s key leadership principles for success that can be extrapolated to any other business and are outlined below.

The invention machine:

Jeff Bezos likens Amazon to an invention machine, powered by a set of 14 leadership tenets that offer a new way to approach creativity at work. Each of these principles are strengthened by the following five scalable and repeatable processes: hiring, meetings and decision-making, product development, team organization, and how the company leverages metrics to achieve business excellence.

Every business can make its own invention machine:

Amazon’s principles and processes can be replicated by entrepreneurs to establish a successful business. By adopting the Amazon way of thinking, businesses that started from scratch are now being run by thousands of employees and clocking billions in revenue. Irrespective of the industry and domain you function in, the processes are applicable to all kind of businesses.

Discover, document and communicate your company’s principles:

Amazon has developed 14 leadership principles with teeth that can be applied retroactively to its previous actions. Leadership is about knocking down obstacles in your team’s way, in the company’s view, so when they push through something difficult, they become more powerful.

Note that every company is different, so you can’t just pick one of the 14 Amazon principles and randomly apply it to your own. But you can take the time to understand what it takes to be a great leader at your company. Analyze the skills and aptitude required to achieve your company’s vision. List and describe these in the form of principles that you can apply to your business processes.

Amazon’s five repeatable and scalable processes:

• The bar raiser process: 

Amazon interviews are conducted in a very systematic manner. The company asks every interviewer to assess each candidate solely on the basis of a particular requirement, and then divvy that up among the various interviewers. They also assign a subject matter expert known as a “bar raiser” to assist in the coaching of interviewers and the facilitation of debriefing meetings. This person has the power to veto a recruit, ensuring that the hiring manager is still raising the bar.

• How to conduct meetings:

   

PowerPoint was deemed inefficient by Amazon as a method of conducting meetings. Word documents or narratives are used instead. Since reading knowledge travels 70 times faster than listening to it, but creating a Word document is much more difficult than creating one in PowerPoint, the presenting team is forced to distill the data and get the audience up to speed as quickly as possible. The initial 20 minutes of meetings are spent perusing the written report, followed by 40 minutes of dialogue.

• Working backwards PR/FAQ: 

This is the process used by Amazon to create new products. Staff begin by writing a press release that focuses on the importance of the product to consumers. Then they go into FAQs that address the problems, conditions and challenges required to bring the product to life.

• The single-threaded leader model: 

This rule refers to how Amazon’s teams are organized. The company forms small, agile teams with each member focusing on a single field, product, technology or solution. When the company comes up with a new product concept, they form a new team that is independent and autonomous from the rest of the company. This helps them to concentrate solely on the launch of the new product or service.

• Input metrics versus output metrics: 

Revenue, free cash flow, gross profit and other financial metrics are examples of output metrics. Input metrics are factors that a company can actually manage, such as the number of goods available, how competitive their prices are, and how easy their goods are to find. Amazon is hyper-focused on these input factors, such as how do we lower prices and how do we add more products, operating under the assumption that when you focus on the inputs, the process improves, which in turn results in the right outputs.

It’s easy to get started

This may seem simplistic. Amazon is a large company, and you may question the ability of doing things the way they do. There are a few things you can do to get started, the book’s authors write. The first step is to go out and find, record and communicate the company’s leadership principles, then incorporate them into everything you do. The second is to abandon PowerPoint as a tool for making decisions and conducting business. Instead opt for Word documents. And the third thing is to use the Working Backwards PR/FAQ process while you’re starting a new product development process, they write.