Innovation, the Amazon Way

On May 20th, Jonathan Cornell, Solutions Architect and Senior Partner for Amazon Web Services, joined the FW SIM Chapter via Zoom and delivered a presentation focused on how Amazon views and leverages technology as a utility to increase the pace of innovation across their organization. Jonathan works closely with organizations to help them accelerate their business processes through the adoption of AWS.

Harkening back to its launch in the mid 90’s, Jeff Bezos’ company has been hailed as a bastion of innovation. Since its humble beginnings as the "world's largest bookstore," Amazon has not only innovated across e-commerce and other adjacent segments, it has also introduced entirely new and unrelated businesses to the organization (Emmy award winning original streaming content, anyone?).

Mr. Cornell gave an inspiring, idea-packed presentation that offered so many ideas for how companies can develop and execute within a culture of innovation. One easily could write a small book about these concepts and constructs, but we’ll limit it to a variety of selected takeaways (Amazon has also been very forthcoming about these practices and more can easily be learned about them online by simple searching using phrases like “Amazon innovation”).

We’ll explore Jonathan’s presentation using the four cornerstones that he explained were fundamental to how Amazon organizes for innovation: Culture, Mechanisms, Architecture, and Organization. But first a few notes about Amazon’s mission and customer focus. Cornell explained that Amazon has a very methodical process for innovation, centered around the customer. Amazon’s mission is, “To be Earth’s most customer-centric company”. No matter what type of product or service is being envisioned, they consistently start with the customer and work backwards, focusing on what is going to “Wow!” them and make them smile. There is “always a customer in the room” whenever they make a decision and they work hard to see things from this invisible customer’s perspective.

 

CULTURE: Customer obsession, hire builders, let them build, support them with a belief system

Jeff Bezos stated in a 2016 letter to shareholders that, “customers are always beautifully and wonderfully dissatisfied.” This presents a tremendous opportunity. Amazon has a culture of Customer Obsession. This is one of their 14 leadership principles (see them all online here: https://www.amazon.jobs/en/principles).

All of these leadership principles are worthy of exploration, but let’s take a quick look at two in particular. First, we have “INVENT & SIMPLIFY: As we do new things we accept that we may be misunderstood for long periods.” Amazon is very willing to take risks. They strive to get product to market ASAP and then work to improve them based on customer feedback. Think of how different that is from the “analysis paralysis” that many of us see too often in organizations that seek near perfection before they are willing to bring a product or service to market.

This leads us to another vital principle: “BIAS FOR ACTION: Speed matters in business. Many decisions and actions are reversible and do not need extensive study. We value calculated risk taking.” Amazon teaches leaders to look at 70% of the data and make a decision make a decision. If leaders wait to examine 90% of the data, they are going to lose time and advantage, and very likely overthink things that they could learn more about from going to market and iterating.

Before moving on to the next cornerstone, Cornell offered another important idea: Is a decision a “One-way Door” or a “Two-way Door”? If there is an easy way to reverse the decision, then it is a two-way door, and you shouldn’t get too hung up on these types of decisions.

 

MECHANISMS: Encodable behaviors that facilitate innovative thinking

Jonathan spoke in depth about the mechanisms that Amazon uses to work backwards when designing a product.

They start by being very specific about the customer and their context and needs. Who is it that you want to delight? Amazon has a set of “working backwards questions” that they print on a card that workers often carry with them:

  • Who is the customer?
  • What is the customer product or opportunity?
  • Is the most important customer benefit clear?
  • How do you know what customers need or want?
  • What does the customer experience look like?

When an Amazon employee has an idea for a new product, they start their exploration of it by writing a “press release” based on answering those 5 questions. Imagine a customer testimonial, what would customers say about the product? By starting with the press release concept, Amazon helps to avoid much of the potential confusion that can exist as a new product makes its way through the more traditional process and lands in marketing at the end (with marketing often not really understanding the product and customer use case). They work it backwards from the end.

Once the press release has been refined by sharing it and seeking feedback from Amazon colleagues, the next step is to flesh the idea out further by writing the FAQs for the product. Cornell shared a list of sample FAQs that can be used to help facilitate this part of the process. Finally, visuals are created to explain and show what the product might look like in a rough form.

Once these three elements (Press Release, FAQs, visuals) have been drafted, they “revise, revise, revise”. It is important to note that any employee in the organization is welcomed and encouraged to use this process to suggest new products. How cool is that? Talk about a culture of innovation! Anyone can use the PR and FAQ processes to assess ideas and submit them for review and funding once they have been fine-tuned.

 

ARCHITECTURE: Structure that supports rapid growth and change

In this portion of the talk, Cornell focused on a shift to “microservices” – breaking things down into small pieces that allow for quicker success or failure determination (i.e. “fail fast”). By using self-service platforms without gatekeepers you enable builders to use the right tool for the right job. This sort of compartmentalization can deliver significant efficiencies when working to iterate solutions.

 

ORGANIZATION: Small empowered teams that own what they create

Amazon’s approach to hiring is, “Hire builders and let them build.” They also strive to keep teams small, sticking to what they amusingly refer to as, “Two-pizza teams” (teams small enough to be fed by two pizzas) – fast and agile teams, fostering ownership and autonomy. These small, decentralized and nimble teams of 4 to no more than 8 or 10, can truly own and run what they build.

These teams are encouraged to experiment early and frequently, and failure is not only welcomed but encouraged. They also employ ideas like “Game Day” (https://aws.amazon.com/gameday/) and a hackathon mentality.

 

Your Homework

Cornell wrapped this fascinating and highly informative presentation with a quote from Jeff Bezos, and a homework assignment!

“Invention comes in many forms and at many scales. The most radical and transformative inventions are often those that empower others to unleash their creativityto pursue their dreams.– Jeff Bezos

Our homework: Try working backwards from your next project goal and find a place to experiment with a one/two-way door decision.

This wonderful presentation left me excited to apply these ideas in my IT team and discuss them with the C-suite in my organization. I am also really looking forward to the next FW SIM presentation and being exposed to more powerful ideas like these!

Written by Kelly Walsh