It would be an understatement to suggest that Amazon is a unique company. The business has grown its innovative culture, defying all business norms in the process.
Understanding Amazon’s lengthy, rigorous, and clever working culture
A strong culture is at the heart of any successful company. And that is precisely the situation with Amazon: its backward-thinking culture has aided in rapidly scaling innovation and growth while strictly adhering to Jeff Bezos’ core leadership beliefs.
Bezos will continue to mold Amazon’s culture even if he just stepped down as CEO. His customer devotion and “start with the customer and work backward” mindset have maintained the 25-year-old “company” in excellent form – and will do so in the years ahead.
No company is perfect, but the Amazonian culture is far from ideal.
The company’s success has sparked controversy such as:
- Bezos’ enormous fortune
- A challenging work environment that has taken a physical toll on workers
- Amazon’s long-term failure to pay income taxes
Attacks are being led by dissatisfied workers and business experts who feel Amazon’s economic model is unsustainable.
Amazon has repeatedly proven the skeptics wrong.
In contrast to the chaos and cynicism that characterize the times, Amazon is the personification of competence, the uncommon institution that habitually works.
In this post, we’ll go over all of the essential components of Amazon’s working backward culture, as well as why codifying your business culture is vital.
To comprehend Amazon’s culture, you must first recognize the company’s distinct business strategy and philosophy.
Working Backwards at Amazon: Scaling Innovation
While most companies strive to remain focused, Amazon has effectively diversified its company in all directions. Instead of relying on industry knowledge, Amazon puts innovation and operational excellence to work in every market it enters.
“Apart from a Nasdaq listing, what is Amazon?” That is a perplexing question. The company is inspired by the world’s largest river, with tributaries that flow in all directions.
Since it’s also a movie studio, an artificial intelligence developer, a gadget maker, and a web-services supplier, the term “retailer” scarcely does the corporation justice. However, calling it a conglomerate isn’t wholly accurate, considering how many of its companies are or will be intimately interwoven.
When I asked Amazonians about it, I got the impression that they saw the business as a paradigm—a unique way of making choices, a set of principles, and Jeff Bezos’ worldview extending to 600,000 people.” – The Atlantic’s Franklin Foer.
Amazon’s yearly revenue of 221.6 billion dollars resulted from more than simply a vision, but also a mentality.
Bezos is a big fan of the term “relentless,” he uses it a lot in his yearly shareholder letters. He looked passionate about defeating any opponent. His emphasis, however, was not on other enterprises but people.
Its unwavering commitment to its customers aided Amazon’s success.
Most multinational companies, including the CIA, depend on Amazon’s servers when it comes to data. Amazon has a 54 % of product searches, with over 600 million goods for sale and over 3 million suppliers offering them. To put it another way, Amazon, not Google, is the most widely used e-commerce search engine on the planet.
According to Ben Thompson, the founder of Stratechery, a website that dissects Silicon Valley companies, Amazon’s primary objective is to supply logistics “for nearly everyone and everything.” From premium cable channels to better search results, every purchase would be subject to a “tax.”
Amazon became the second corporation after Apple to reach a trillion-dollar value, but Jeff Bezos maintained the same attitude as when he began in a garage in Seattle.
There’s a significant difference between “thinking like a startup” and “doing like one.” Amazon has a “Day 1” attitude, culture, and operational style that places the customer at the center of everything as if it were the first day of business.
Day 1 is all about being interested, agile, and trying new things. It entails having the courage to fail. You can better amaze and satisfy clients in the future by using a trial-and-error methodology.
Jeff Bezos stated that we need to sow many seeds since we have no idea which one will develop into a gigantic oak.
In contrast, a “Day 2” attitude is when a company emphasizes operational excellence as it expands. The emphasis changes from outward customer-centric innovation to internal difficulties. As a result, not only do decision-making and speed diminish as it scales, but innovation and agility also suffer.
“Grow Big Fast” has always been Jeff Bezos’ motto regarding Amazon. Amazon never ceased inventing and disrupting its own company, from deploying drones to using artificial intelligence for inventory management.
Maintaining an entrepreneurial mindset takes a toll on the company. A former human resources director called Amazon’s high-performance and demanding culture “purposeful Darwinism.”
“You can work hard, long, or smart at Amazon.com, but you can’t select two out of three,” stated Jeff Bezos.
This aggressive mindset has permeated all elements of Amazon’s culture, from goal-setting to performance management, unsurprisingly.
Being an Amazonian isn’t for everyone.
“The amazing thing about Amazon’s culture is that it is unpleasant. On the other hand, it’s powerful enough to keep out those who don’t belong.” – author Marcus Buckingham told Fox Business.
Amazon has a strategy for getting the best out of its employees that only works for sure.
Jeff Bezos has repeatedly refuted all of the allegations. He generally keeps his mouth shut regarding Amazon’s harsh working atmosphere. The entrepreneur refuses to accept that the company’s success has come at a cost.
“When Bezos establishes the parameters for his company or society, he’s no more capable of dispassion than anybody else,” Franklin Foer wrote. To live in the world he created is to live in a world shaped by his preconceptions and preferences.”
Let’s take a look at Amazon’s Culture Design Canvas to see what the significant concepts and behaviors are that define what it means to be an “Amazonian.”
Amazon Culture Design Framework
Using the Culture Design Framework to map your company’s culture is a learning and discovery process.
“You can write down your corporate culture, but make sure you’re finding it, revealing it – not inventing it,” Jeff Bezos said.
To map Amazon’s culture, Robin Andrulevich was assigned. She had expected a two-month job to turn into a nine-month undertaking.
It’s challenging to capture the spirit of culture as complicated as Amazon’s. So Robin needed to collect many opinions and components to codify Amazon’s culture.
Working Backwards was used to generate Amazon’s significant advances since 2004. Colin Bryar and Bill Carr titled their book after it since it is crucial to its success.
Working Backwards is a method for vetting ideas and developing new goods that follows a systematic approach. It all begins with defining the end-to-end customer experience, then iteratively working backward from there until the team has a clear idea of what to construct.
It’s a backward version of Design Thinking. It all begins with the customer benefit that the solution will have.
The Mission Statement of Amazon
Amazon doesn’t have a specific goal. Instead, it has a mission that’s more focused on the inside than the outside.
“Our goal is to be the most customer-focused company on the planet.” Our objective is to consistently improve the customer experience by using the internet and technology to assist customers in finding, discovering, and purchasing whatever they want, as well as empowering companies and content producers to achieve their full potential.”
Even though the final section mentions how it benefits others (“maximize their success”), it’s still self-serving rather than highlighting why the company exists. The influence has on others (employees, society, community, etc.)
The Core Values of Amazon
The Leadership Principles are a comprehensive collection of Amazon’s core values.
This list of core values describes what the organization expects of each employee — they are all expected to lead.
Amazon used to have ten Leadership Principles that characterized its style of thinking and doing. Some were modified over time, and others were added. These ideals are discussed at employment interviews, taught during orientations, and evaluated during performance evaluations.
Amazon now has 14 leadership principles in place:
1. Obsession with the customer. Although leaders pay attention to competitors, they obsess over customers. Leaders begin with the consumer and work their way back.
2. Possession. Owners are leaders. They don’t trade long-term worth for short-term success. “That’s not my job,” they never say.
3. Come up with new ideas and make things easier. Leaders want and expect their staff to be innovative. They constantly find ways to simplify things. Leaders are aware of their surroundings; they are not constrained by the phrase “not created here.”
4. Most of the time is correct. Leaders have strong intuition and sound judgment. They seek out other points of view and strive to disprove their arguments.
5. Be interested and learn new things. Leaders are always learning. They are intrigued by new possibilities and take steps to investigate them.
6. Hire the finest and develop them. Leaders raise the performance bar to acknowledge extraordinary talent with every appointment and advancement. Leaders cultivate and value their ability to coach others.
7. Be a stickler for the highest standards. Leaders have unyieldingly high standards, which others may find excessive. They are constantly pushing the bar to provide high-quality goods, services, and processes. Leaders guarantee that errors be corrected rather than passed down the line.
8. Consider the larger picture. It’s a self-fulfilling prophesy to think tiny. Leaders convey a strong vision that motivates others to follow suit. They think outside the box and seek out novel ways to serve customers.
9. A bias in favor of action. It’s essential to move quickly. Many judgments may be reversed and do not need considerable research. Leaders place a premium on measured risk-taking.
10. Frugality. Get more accomplishment with less. Constraints encourage resourcefulness, independence, and innovation. However, there are no bonus points awarded for raising budgets or expenditures.
11. Earn people’s trust. Leaders pay attention to what others are saying, communicate openly, and treat people respectfully. Even when it hurts, they are critical of themselves. Leaders don’t feel their or their team’s body odor is perfume-scented.
12. Take a deep dive. Leaders work at all levels, keep in touch with the details, audit often, and be cautious when stats and anecdotes conflict.
13. Have a strong backbone. Disagree and commit. Leaders are tenacious and have strong convictions. They do not make compromises for the sake of social cohesiveness. When leaders disagree with choices, they must politely challenge them.
14. Produce results. Leaders concentrate on their company’s critical inputs and ensure that they are delivered in a timely and high-quality manner.
The Cultural Priorities of Amazon
Amazon’s culture emphasizes the broad picture: the corporation evaluates its performance in terms of systemic impact rather than short-term or individual outcomes.
“When we win a Golden Globe, it helps us sell more shoes,” Bezos joked of Amazon’s investment in Hollywood.
Here are the top three priorities of Amazon, even before making a statement:
- Even though short-term outcomes (a year is short-term in Amazon’s playbook) are essential, long-term wealth generation is more important.
- Even perfection takes a back seat to speed.
- High performance, even if it means sacrificing harmony.
Amazon Rewards and Punishes Certain Behaviors
Consistency is one of Bezos’ most notable characteristics. He recognizes that actions define the culture and are regularly rewarded or punished.
As a continual reminder to himself and all stakeholders, Bezos appended the 1997 shareholder letter to every letter he sent after that. Amazon’s success relies on a constant emphasis on consumers, the creation of long-term value above short-term corporate profit, and the taking of several risky bets.
“This is Day 1 for the Internet, and, if we execute well, for Amazon.com,” Bezos said in the inaugural shareholder letter.
Behaviors that Amazon punishes:
- Letting go
- Day 2 mindset
Behaviors that Amazon rewards:
- The overall performance of the company (not individual or team-specific results)
- The merits of wandering or autonomy: Bezos remarked, “Wandering is a vital counterweight to efficiency.” Intellectual freedom supports creativity and development after the aim has been established.
- Constraints: Limitations are seen as a source of innovation at Amazon. “One of the few ways out of a tight box is to innovate your way out,” says a top executive.
- Courage: Employees at Amazon Inc. are encouraged to take risks by exploring new business opportunities.
Amazon’s Emotional Workplace Culture
How does Amazon foster mental well-being? Amazon isn’t recognized for being a friendly and compassionate corporation. Instead, it has an aggressive, competitive, and harsh work environment. Cold facts and complicated procedures dominate everything.
The company promotes individuals to be frank, speak out, and resolve conflicts in the open. This strategy can work for extroverts with more prominent voices, but it will be difficult for introverts, women, and minorities.
The Norm Is Openness and Honesty
Politics is not tolerated, and individuals are unable to hide behind others. Knowledge and faults are openly shared. The core of the day-to-day business is candid talks. However, many Amazon workers believe there is a lack of psychological safety to express themselves freely.
“Tell me even more openly,” reads Bezos’ workplace nameplate.
Avoid Thinking in Groups
Amazon’s founder enjoys putting people to the test – and being put to the test by his peers. Bezos pushes individuals to challenge conventional thinking and combat uniformity; he prefers constructive disagreement to peace. But on the other hand, criticism and debates should be backed up by evidence.
Bezos thinks that truth emerges when opposing ideas and points of view meet, often violently.
Challenge People With Respect
Leaders are “obligated to respectfully criticize choices when they disagree, even if doing so is difficult or taxing,” according to one of Amazon’s Leadership Principles.
Employees are aware of their responsibilities. “Employees have learned that disagreeing with top executives is good to their careers at Amazon,” John Rossman stated in The Amazon Way.
Amazon Is Unconcerned About Staff Morale
Instead, the company, like Netflix, draws top personnel and fosters a culture of freedom and accountability.
Experimentation Is Encouraged
A trial-and-error technique is encouraged by Amazon. “Failure and creation are inseparable twins,” stated Jeff Bezos. It’s impossible to learn without making errors.
The created Amazon Web Services platform has internal requirements in mind. However, the notion “what if we transform it into a revenue-generating service?” was spurred by an unexpected visit from a pair of engineers.
AWS has become one of Amazon’s most successful services.
Amazon’s Leadership Principles are divided by a narrow line, and leaders are expected to “always be correct.” However, intellectual humility is valued. Leaders never stop learning; they seek other viewpoints to question their assumptions.
“At most companies, CEOs prefer to demonstrate how much they know,” says James Thomson, an Amazon Marketplace manager. Instead, the emphasis at Amazon is on asking the correct question. “Leadership is taught to find flaws in data.”
Diversity Seems To Be an Issue
When Amazon’s top executives hear the word diversity, they think it means “lowering standards.” Of course, Amazon is a data-driven meritocracy, but who chooses what gets counted?
The company’s demanding and aggressive approach to dealing with open disagreement may not suit everyone. Rigidity may also hinder prospects for advancement in the workplace. For example, how many parents can cope with all VP meetings starting at 7 AM?
The meritocracy mentality at Amazon might be a barrier to diversity. Unfortunately, Jeff Bezos disregarded the criticism when asked about the lack of diversity within Amazon’s S-Team (executive team). Ironically, the team’s recent acquisition was yet another white man.
GLAmazon, an official employee affinity club for gay and lesbian workers, Black Employees Network, and Women in Technology are just a few of Amazon’s numerous employee resource organizations.
However, the ERGs have little potential to promote genuine change without structural reforms.
The Feedback Culture of Amazon
The way Amazon handles customer feedback has sparked a lot of debate. Many employees say that the company’s contentious culture has turned input into a kind of punishment rather than a gift.
Employees may praise or criticize their peers using this application, which tracks their performance against defined KPIs. The management is aware of who delivered the communication, but the recipient of the compliment or criticism is unaware.
According to a study in The New York Times, this tool encourages healthy or unhealthful rivalry among workers. According to some Amazon personnel, the technology causes colleagues to band together against people to bury them.
Several Amazon spokespersons have repeatedly refuted the allegations.
Review at the Organizational Level
Amazon management discusses their workers’ evaluations once a year to determine who should be dismissed. This approach is analogous to Netflix’s Keeper Test, in which underperforming employees are given a severance payout in exchange for being replaced with a star employee.
Stack ranking – or “rank-and-yank” – is a performance review process used by Amazon, in which workers are rated, and the worst-performing ones are dismissed. Unfortunately, this method has been connected to toxic working environments, such as at Microsoft before Satya Nadella’s arrival.
Every leader is supposed to purify their team. But, according to reports, some Amazon bosses put a “sacrificial lamb” under the bus to protect more key team members.
Performance Improvement Plan
Amazon employs a Performance Improvement Plan (PIP), which lasts three months and requires failing workers to improve and meet business requirements. Those who do not improve will be terminated.
In most businesses, this is a self-fulfilling promise. As a result, people will be dismissed in most circumstances, irrespective of whether or not their performance advances.
Amazon considers that everyone should be allowed to defend their point of view, which is consistent with their conflict management philosophy. But on the other hand, insiders claim that the excessively toxic atmosphere makes it difficult to turn around unfavorable conditions.
Program of Connections
Internal climate survey assesses employee happiness and engagement. Unfortunately, there seems to be a gap between what management sees and what individuals perceive once again.
Recently, Jeff Bezos brags about the findings of an employee survey: 95% of employees would refer a friend to work there. Many workers assume that the results are phony. Amazon employees, on the other hand, questioned the story.
Many Amazon workers told Recode that they don’t answer connections questions honestly because they’re afraid of repercussions if they do. However, others said their bosses forced them to answer queries positively.
The Rituals of Amazon
It’s no wonder that Amazon doesn’t have many team rituals because of its aggressive attitude. Nevertheless, here’s a list of some of the most common practices.
Recruits must go through grueling multi-month immersion training to learn how to become an Amazonian. Meetings, decision-making, and feedback methods become second nature over time.
Before launching anything, Jeff Bezos needs Amazon’s executives to conduct this profound ritual. So six months before the new firm was established, John Rossman was asked to prepare a press release for Amazon Marketplace.
The press release’s purpose is to show, inspire, and align his inside staff, not to inform the general public.
In Think Like Amazon, Rossman noted, “Writing ideas and proposals in entire narratives lead to better ideas, greater clarity on the ideas, and better discourse around the ideas.”
According to Rossman, every future press release should follow four guidelines:
- Schedule the release at a later date
- Begin with the client
- State strong and specific objectives
- Describe the challenges you’ve experienced
The Empty Chair
“Your brand is what other people say about you when you’re not in the room,” says Amazon CEO Jeff Bezos.
To remind executives that the consumer always has a place at the Amazon table, Bezos employs the metaphor of an empty chair. Customers want to know that their opinions are taken into consideration. This custom serves as a constant reminder of Amazon’s devotion to customers.
Employees are asked to identify their “superpower” during performance reports at Amazon. It serves as a beautiful reminder of how vital each teammate is.
The Functional Side of Amazon’s Culture Design Framework
How Amazon’s decision-making processes can be defined? First, Bezos divides all of his choices into two kinds to attain high velocity:
Type 1 actions have far-reaching consequences and are virtually irrevocable. “One-way doors are Type 1 judgments. You can’t go back to where you were before if you pass through and don’t like what you see on the other side,” Bezos stated in a shareholder letter in 2016.
Type 1 judgments should be made deliberately and systematically to produce a high-quality choice, with plenty of thought and consultation.
Type 2 judgments are reversible or modifiable — they’re two-way doors. As Bezos stated, “You can reopen the door and walk through.” you don’t have to live with the implications for very long if you’ve made a poor choice.
Individuals with great judgment or small groups may make these judgments fast—Amazon managers to their subordinates delegate type 2 choices.
In today’s environment, speed is a competitive advantage.
Jeff Bezos outlines how Amazon handles this difficulty in one of his shareholder letters: “Our leadership management is dedicated to maintaining our decision-making velocity high.” Speed is essential in business, and a fast-paced decision-making atmosphere is also more enjoyable.”
The founder of Amazon admits that his team does not have all of the solutions. The business culture is predicated on the assumption that decision-making is intrinsically inaccurate. Making successful judgments does not imply avoiding all risks; rather, it entails making the best option possible given poor knowledge.
Most choices, according to Bezos, should be made with about 70% of the knowledge you wish you had. Waiting for 90% is simply going to slow you down. Acting swiftly also necessitates detecting problems and reversing course to avoid a poor choice becoming a disastrous one.
Disagree and Make a Commitment
It’s OK to accept that a choice may not be popular with everyone. However, it’s not acceptable to abandon a decision after it’s been made.
Amazon employs a “disagree and commit” strategy.
Disagreement is beneficial, but will others bet with you on it at some point? Will they agree to disagree and then commit? No one can be certain of the consequence of a choice. When everyone commits, though, the chances are in your favor.
Despite his initial skepticism, leaders should be willing to personally put this notion into effect, as Bezos did when he approved Amazon Studios’ original program.
Hiring Procedure for a Bar Raiser
Amazon realizes that managers cannot depend only on the interviewer’s gut instinct when recruiting new employees. Instead, every new employee should raise the bar, which is the name of both a process and a group of people that engage in it.
There is special training provided to Amazon Bar Raisers. Bar Raisers have complete control over any hire, including the ability to overrule the recruiting manager. They aren’t recruiting managers or recruiters but experienced workers who can provide a different viewpoint.
Raising the bar takes priority over filling a post in this procedure.
An in-house interview loop is set up after the recruiting manager has chosen a candidate. A group of five to seven Bar Raisers is decided to conduct detailed and systematic interviews. When the committee meets to make a final recommendation, careful notes are made, including verbatim, shared.
The Meetings Culture at Amazon
The Rule of Two Pizzas
A simple rule limits the number of people who may attend meetings at Amazon. Jeff Bezos considers ideal sessions to be ones in which two pizzas serve to feed all attendees.
According to Bezos, it becomes a productivity killer when a meeting has too many people in it. The bigger the group, the more difficult it is to acquire information and act quickly.
PowerPoint Presentations Are Not Permitted
The issue isn’t with the presentations themselves; most presenters and decks are dull. They are not intended for involvement but rather for the exchange of information.
Amazon CEO Jeff Bezos notably banned PowerPoint presentations in company meetings. He explained why and, most significantly, why the memo is a better option for participants in his yearly letter.
This paper has a more engaging “story framework” than PowerPoint bullet points. It gives readers a complete picture, including background information and all the data they need to make an informed choice. The memo is six pages long and contains simple phrases, verbs, and nouns.
Writing requires more linear logic and thought. “If you can’t write it down, you’re not ready to defend it,” John Rossman writes on Think Like Amazon.
Executives, according to Bezos, are adept at interrupting. Meetings in silence create a “study hall” vibe. Executives read the 6-page memo quietly for the first 15 to 20 minutes. Then, before participating in a discussion, they take notes, compose questions, and reflect on the content.
In addition, most CEOs do not read documents before a meeting. This method allows for contemplation while ensuring that everyone is on the same page.
The Crucial Norms and Rules of Amazon
Jeff Bezos founded Amazon to be an anti-bureaucracy firm. The approach results in fewer, more specific regulations that foster autonomy and define the Amazon way of doing things without restricting individuals.
It is the rule of all rules at Amazon’s core philosophy.
“Good intentions don’t work. Mechanisms do”
Instead of relying on motivational slogans such as “try harder,” Amazon believes that repeating errors are a system problem, not a human one.
The company is laser-focused on addressing the fundamental issues that led to the problem in the first place. Following the “Amazon approach” leads to improved performance.
Press Release (PR) and Frequently Asked Questions (FAQs) Process
Before every team begins work on a new project, they must first write a press release and a list of frequently asked questions. The goal is to keep a laser-like concentration on the customer:
Why will this new product be appealing enough to entice buyers to acquire it?
“So what?” is a popular question posed by CEOs. It’s not worth constructing if the PR doesn’t depict a superior product (faster, simpler, or cheaper) than what presently exists.
The reader is provided with the customer experience details in the press release. In addition, the FAQs cover all critical aspects of the client experience and the cost and difficulty of developing the product or service.
The PR/FAQs process provides a foundation for iterating quickly. It’s not uncommon for an Amazon team to create ten revisions of anything.
CIO Rick Dalzell devised a model to outline how Amazon’s effective and agile teams should work. Self-contained groups are tiny (less than ten individuals), do not need to collaborate with other teams, are monitored in real-time, are self-funded, and operate like company owners.
Amazon developed a new way after the initial team model failed. It is called the single-threaded leader (STL) team.
When innovation is one of a team’s many responsibilities, it gets crammed into their work schedule – frequently with disastrous effects. “The easiest way to fail at creating anything is to make it someone’s part-time job,” remarked Dave Limp, Amazon’s SVP of devices.
A single-threaded leader can run a small team or oversee a large project like Amazon Echo. They can analyze possibilities, prioritize activities, define roles and duties, and fill unfilled jobs with the flexibility and authority they need.
Self-contained teams must have a clear objective and be authorized by the S-Team ahead of time.
Horrible Amazon Warehouse Restrictions
The unwritten norm seems to be more widespread than Amazon officials would want to acknowledge. Several private investigations and journalistic press have highlighted the absurd limits that warehouse employees and drivers must adhere to.
Employees are required to work long shifts with little or no break. They can only take two 30-minute breaks a day, including restroom breaks. Worse, employees are expected to work odd hours, particularly during the holidays.
Both admirers and skeptics have applauded Amazon’s “Working Backwards” company style. For others, what seems to be an aggressive, high-performance culture is labeled “purposeful Darwinism.”
Overbearing, aggressive cultures are often seen to be obsolete. Both Amazon and Netflix, on the other hand, disprove this theory.
When you talk to your customers or workshop participants about various forms of culture – how to describe the present and desired – one question usually comes up: Is there a suitable culture? How much is excessive?
Both Amazon and Netflix take high performance to the limit. The point of revealing Amazon’s culture isn’t to inspire you to fight it or imitate it.
Rather than trying to replicate Amazon (or not), concentrate on the lessons applied to your company.