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Amazon's culture in the Leadership Principles
Amazon's Leadership Principles define the values that create the company culture. Let's see what they are and why you should learn about them.
9 min read
Recently, I have been learning more about Amazon's Leadership Principles. At first glance, these 16 principles seem to be distinct and a lot to memorize, but after a while, there seem to be certain relationships between them. If you recognize the flow, then it all makes sense. This article is my interpretation of 16 Amazon's Leadership Principles. Writing everything down can help organize my thought flow when going over the topic, and hopefully, these notes are useful to you in some ways too. As always, correction to any of the errors is welcome!
What are Amazon's Leadership Principles, and why should you learn them?
To answer this, we might need to know a bit more about Amazon's history. The company was founded in 1994 and went public in 1997. Going public has never been an easy feat by any means, so how did Amazon achieve this? This is because Amazonians have followed a fundamental mindset, which is known as Leadership Principles today.
Amazon's Leadership Principles are fundamental pieces to building a solution to any problems, business decisions, and growth. Although the principles have been pillars since 1994, their first public mention was in Jeff Bezos's letter to the shareholders in 1997, and they were formally written down by Amazon's senior leadership team (S Team) in 2002. There were only 10 principles back then but many have changed and we have 16 principles as of August 2022.
The principles are not a definitively defined step-by-step operational guide. In fact, with more than 1 million employees in the organization, Amazon consists of multiple smaller teams that can have considerably different cultures and workflows. However, the fundamental, which adheres to Amazon's Leadership Principles, exists as a glue to connect these teams,
In the big picture, I think the principles are applicable across many industries. Even some big players publicly adopt these principles. Certainly, companies have their north star, but they are more or less different interpretations and extensions of the same foundational concepts. In short, they overlap one way or another. By learning Amazon's Leadership Principles, you can have a great sense of what the companies are looking for.
Are Leadership Principles applicable to only the leaders (managers)?
In short, no, but this is what I find interesting about Amazon's Leadership Principles. The term leader is rather figurative here. Leaders are those who make the right decision to achieve a certain goal and the best possible outcome in the long run. Hence, every person at Amazon is a leader, not that type of literal management position, but more a leader of the internal self, the surroundings, and pieces of Amazon itself.
I suppose this makes little sense as of now, but it should be more clarified as we go through the Leadership Principles. In this first part of the series, let's go over Customer Obsession, Ownership, Invent and Simplify, and Are Right, A Lot.
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.
Customer Obsession is arguably the most important principle at Amazon, and here, we have 3 main ideas:
- Have a goal? Start from the customer's viewpoint (the end goal), then work backwards
- Always earn and keep customer trust along the line
- Try to be competitive in the market, but in a way that is reasonable and valuable to the customer
Who are the customers then? To many people, this is all about perspective. If you are a freelancer, then you might say your customers are those who order your services. If you are a shop owner, then customers are those who buy your product. To Amazonians, customers consist of everyone who is affected by their decision, both internally (managers, colleagues) and externally (end users of ecommerce, cloud computing, entertainment, and other platforms). That said, to my understanding, Customer Obsession is more about the end users.
Amazon is a data-driven company, so many people expect the company to be built upon a humongous amount of data and algorithms. However, when Amazonians make decisions, they prioritize the experience of end users. One decision may be statistically reasonable, be it on the revenue increment, competitive analysis or so, but if that decision fails the expectations of their daily end users based on anecdotal evidence and inherently lose user trust, it is not acceptable.
Everything originates from customers, other Amazon's Leadership Principles in one way or another connect to Customer Obsession. For example, Earn Trust is already the second point of this principle, and in certain contexts, let's say you need to satisfy both customer groups with conflict requirements, you need to Think Big there. As a side note, I believe it is better to understand the nature of principles, then figure out what kinds of real-world dilemmas are associated with the principle than do the opposite approach.
- Customer Obsession => You need to satisfy the customers (principle) => How can you satisfy all of the customer bases? (dilemma) - Better thought flow
- How can you satisfy all of the customer bases? (dilemma) => Which principle should I apply here? => Customer Obsession - Worse thought flow
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."
I suppose this carries the core explanation of why Amazonians are leaders in the first place. Working at Amazon means you are required to make an impactful contribution to a company, in your own way. Ownership is pretty much summed up in two points:
- Think long term
- Never say "that's not my job"
Let's say you are given 5 tasks to complete in a day, no problem, and you finish them. There are also many ways to complete the tasks, and here comes the trade-off between long-term and short-term results. Ask yourself, does the approach create too much overhead in the long run? Is your algorithm suboptimal that the program effectively freezes when there are 10x more users?
That aside, completing tasks is your responsibility, or should I say, a designated responsibility. What if something else comes up and is not in the scope of your task? With your designated responsibility, you are not required to work on the matter. However, by yourself and in your capability, you can always help your colleagues resolve the issue, even if that is outside of your domain. If you look from a business owner's perspective, you hire people to delegate specific jobs, but in the end, you still need to join in the loop when something out-of-control happens. Leaders, like owners, care about the whole organization, beyond just their designated responsibilities.
Be easier said than done, how can you determine which approach benefits customers in the long run? How can you know when to help others? Because of that, these dilemmas connect the Ownership principle to all the rest of the Leadership Principles, Are Right, A Lot, Bias for Action, and Frugality for example.
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.
This principle is relatively self-explanatory. By the name only, we know that it embeds Learn and Be Curious. Never say never is the first point of the Invent and Simplify principle. As products grow to a global scale, and into different industries, I suppose there are whole new categories of edge cases that no one has ever thought of. In that case, Amazonians have to invent new solutions themselves. On the other hand, if someone solved the problems before, then Amazonians need to find out those hidden gems. This leads to the second point: Keep it simple, stupid (KISS). If the solution is not maintainable and potentially troublesome in the long run, then they are back to the table. Inherently, these two points lead to the final idea of Invent and Simplify.
As we do new things, we accept that we may be misunderstood for long periods of time.
I suppose there is nothing to explain here, but this makes me wonder, how can you safely say the current approach is "misunderstood"? Perhaps, this is the link to decision-making-related principles like Are Right, A Lot, and Have Backbone; Disagree and Commit.
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.
I must say this principle is rather tricky to understand. At first glance, it sounds somewhat arrogant to me, like: "My decision is always right, and you just need to follow me", but the second statement of this principle suggests otherwise.
- Seek diverse perspective
- Work to disconfirm their belief
Are Right, A Lot is not Are Right, and Always Right. This principle is not about asserting your knowledge or seniority to prove you are right, instead, it encourages people to gather diverse opinions from multiple parties before making a final decision. If so, why says "leaders are right"? If you take a look from another perspective, then it is about being right in choosing the final decision for the sake of customer experience and trust.
You don't have to be faultless. It is fine to have people criticize your approaches. It is fine to have your original ideas crumble (disconfirm your belief). If your colleague's suggestion is better, then use theirs (strong judgment and good instincts). The path from whiteboard to customers has many obstacles, but leaders should be able to overcome them eventually (are right). Not just one time, but a lot.
We have gone over Customer Obsession, Ownership, and Invent and Simplify. Each of them, in one way or another, has a dilemma of decision making. However, with the help of Are Right, A Lot, I think we can generalize the framework for solutions using the following steps.
- Listen to other perspectives
- Use your instinct (fairly ambiguous, but I believe it mostly originates from experience)
- Use data points
- Use anecdotal evidence
- Trial and errors (testing)
However, as always, there are always dilemmas associated with the principle. What if you don't have enough (or diversified enough) data points and anecdotal evidence? There are 100 opinions, how do you narrow down the top candidates? The other 12 principles can provide supplemental ideas to navigate these issues.
My interpretation of the first four of Amazon's Leadership Principles has been discussed in this article, there are still twelve more to go and I will cover them in my next articles. To recap, there are two main points that I want to emphasize:
- Understand the nature of principles then figure out associated problems, not vice versa
- Always try to connect the principles, and utilize their overlap to create a flow
With 10 minutes of content, hopefully, this is just right so both you and I do not lose attention when reviewing. Last but not least, do feel free to correct any of my mistakes and let me know what you think about Amazon's Leadership Principles down below!
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