Amazon Culture Decoded

10 Big Ideas from Amazon Culture Every Entrepreneur Must Leverage for Success | Amazon’s Secret Sauce

What is it that makes Amazon Culture so successful? Well, I am glad you asked. 😊 I have distilled learnings from my experience as an Amazon leader (during my last stint), and am sharing these 10 amazing secrets behind Amazon’s success, which you can take inspiration from in your own businesses or career.

Jeff Bezos has given a lot of impetus to Amazon Culture to drive sustainable business success and undoubtedly his vision has yielded the desired results for him. And over the next few minutes, you will have access to the key building blocks of that culture (from my lens) which you can leverage to multiply your success.

Additionally, I have also put out some of my favorite quotes from Jeff Bezos in this article which will hopefully motivate you further in your journey.

So, let’s get started and decode the building blocks behind Amazon's Culture.

1. Amazon’s Day 1 Culture

Every day is Day 1 at Amazon. Period. 

This is one of the very core elements of Amazon Culture. As an ex Amazon Leader, when I look back at my experience, this was something which was deeply ingrained in every team. Once in a conversation, Jeff Bezos was asked about the Day 1 Culture at Amazon, and he had an awe-inspiring answer to that, which continues to be so relevant for any business.

“I’ve been reminding people that it’s Day 1 for a couple of decades…Day 2 is stasis. Followed by Irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it’s always Day 1.”

Jeff Bezos

Interestingly, this was also covered in the letter Jeff once sent to the shareholders. You must checkout these shareholder letters sent by Jeff Bezos every year since the launch. 

Here are some more of Jeff Bezos’s motivational quotes related to Amazon’s Culture for you:

“Day 2 companies make high-quality decisions, but they make high-quality decisions slowly. To keep the energy and dynamism of Day 1, you have to somehow make high-quality, high-velocity decisions.”

“Staying in Day 1 requires you to experiment patiently, accept failures, plant seeds, protect saplings, and double down when you see customer delight.”

“All businesses need to be young forever. If your customer base ages with you, you’re Woolworth’s.”

Some Learning Questions from Amazon’s Culture which Leaders should ask themselves:

  • How can I inspire my team to always remain in the “Learning zone”?
  • How can I always remain an organization which challenges the status quo and continues to innovate like a Day 1 company?
 

2. Customer Obsession (A Cornerstone of Amazon's Culture)

Jeff Bezos once said, “The No.1 thing that has made us successful by far is obsessive compulsive focus on the customer.” And I couldn’t agree more with this statement. I felt this since my Day 1 as an Amazon Leader. Every conversation had a seat for customer (figuratively), to ensure that the discussions, decisions and actions were truly customer centric. 

Jeff wants Amazon to be the most customer-centric company in the world, so they are determined that the best way to strategize is to consider what the customer wants and work backwards from there.

“We see our customers as invited guests to a party, and we are the hosts. It’s our job every day to make every important aspect of the customer experience a little bit better.”

Jeff Bezos

Customer obsession is one of the most important aspects of Amazon Culture, which Business Leaders and Entrepreneurs can draw so much learning from!

Some Learning Questions from Amazon’s Culture which Leaders should ask themselves:

  • What is my USP (Unique Value Proposition) for the customer?
  • How can I further create a delightful product/experience the customer?
  • Well, I will let you reflect on this for a moment, and let’s move to next powerful learning from Amazon.
 
 

3. Leadership Principles at Amazon

Every Amazon employee is expected to demonstrate the Leadership Principles, Every day! Whether it is in terms of behavior, decision making or problem solving – these principles are a way of life at Amazon. In fact, Customer Obsession was so important, that it is even defined as one of the key Leadership Principles!

"We've had three big ideas at Amazon that we've stuck with for 18 years, and they're the reason we're successful: Put the customer first. Invent. And be patient."

Jeff Bezos

Amazon recently introduced 2 new Leadership Principles – “Strive to be Earth’s Best Employer” and “ Success and Scale Bring Broad Responsibility”, making it total of 16 Leadership Principles, which I have listed below:

Amazon Leadership Principles
*Source – Amazon

These Amazon leadership principles are proven to be super powerful and you can benefit from taking an inspiration from them.

Here are some more Jeff Bezo’s motivational quotes related to Leadership Principles:

“We use our Leadership Principles every day, whether we’re discussing ideas for new projects or deciding on the best approach to solving a problem. It is just one of the things that makes Amazon peculiar.”

“If I have three good decisions a day, that’s enough.” “They should just be as high quality as I can make them.”

Some Learning Questions from Amazon’s Culture which Leaders should ask themselves:

  • What are the Core Values which I want my employees to live and breathe?
  • What are the Tenets our team can set, which can help us win (at speed) collectively?

Once you are able to pen these down and articulate it clearly within your organization, they will help you create a virtuous cycle, and set in motion a culture which will further propel your team everyday!

 

4. Decision Making – Two-way doors

This is a very effective way for Amazon to continue to remain agile, despite it’s mammoth size! I simply love this quote from Jeff Bezos.

“If you walk through and don't like what you see on the other side, you can't get back to where you were before. We can call these Type 1 decisions. But most decisions aren't like that -- they are changeable, reversible -- they're two-way doors.”

Jeff Bezos

As our teams and organization grows, lot of slowness can come in decision making, because of the dependencies and lower risk appetite. This leadership principle makes sure that teams make decisions fast, and it’s okay to fail and learn. Many times, teams can also get into analysis paralysis – This is a good reminder for the teams to move ahead fast and not get stuck with being 100% complete with data (which can take forever).

Check out these quotes from Jeff Bezos related to Decision Making:

“There are two ways to extend a business. Take inventory of what you are good at and extend out from your skills. Or determine what your customers need and work backwards, even if it requires learning new skills.”

“Most decisions should probably be made with somewhere around 70% of the information you wish you had. If you wait for 90%, in most cases, you’re probably being slow.”

“We are stubborn on vision. We are flexible on details.”

Some Learning Questions from Amazon’s Culture which Leaders should ask themselves:

  • What’s at stake if this doesn’t go as planned?
  • What impact can this create on my customers and business, if am not moving ahead (and also if I do move ahead)?
 
 

5. Amazon Flywheel

This is one of my favorite aspects of Amazon culture. Let me share an interesting backstory I heard about – Legend says, “Amazon’s founder Jeff bezos, had created this Flywheel on a Tissue Paper in one conversation, and it continues to remain true and core part of Amazon’s strategy even today!” What strikes me the most about this Flywheel is its simplicity and the virtuous cycle or network effects this creates for Amazon.

"If you're long-term oriented, customer interests and shareholder interests are aligned."

Jeff Bezos
Amazon Flywheel

Now let’s understand the flywheel. Simply put, more sellers lead to more selection, which leads to better customer experience, which in turn drives greater customer footfalls (virtually) or traffic to Amazon. Also as the base grows it leads to lower cost structure for the company leading to lower prices, which in turn enhances the customer experience and hence again powers the flywheel further, making Amazon grow and scale faster and faster! The Amazon Flywheel is responsible for Amazon’s fast growth.

“We are comfortable planting seeds and waiting for them to grow into trees.”

Network effects is another very powerful concept, which I will share more about in my upcoming articles. Do subscribe to my blog to stay updated.

In brief, network effects can be direct or indirect. While Amazon Flywheel represents a two-sided network effect, even one-sided network effects can be very powerful. Think about Facebook or Whatsapp – More customers lead to more engagement, which leads to increased customers (with social influence) and the cycle goes on. These are some best examples of one-sided network effects.

Some Learning Questions from Amazon’s Culture which Leaders should ask themselves:

  • What kind of Network Effects are in play for my business, which I can leverage?
  • How can I create a virtuous cycle for my business?
 
 

6. Writing the Amazon Way

While many of the working professionals use PowerPoint Presentations regularly in their work, you would be amazed to know that the world of Powerpoint doesn’t really exist in Amazon, and they have a very peculiar culture in which “writing” is encouraged, with very high attention to detail and powerful storytelling.

"You can have the best technology, you can have the best business model, but if the storytelling isn't amazing, it won't matter. Nobody will watch."

Jeff Bezos


Some Learning Questions from Amazon’s Culture which Leaders should ask themselves:

  • How can I bring greater attention to detail when planning and reviewing?
  • How can my team step back and think about the story (The classic Insights vs Data Conundrum)?
 
 

7. Take Bold Risks and Innovate

One of the other things I learned from Amazon culture was how we can continue to take bold bets, challenge the status quo, and strive to raise the bar at every moment to Innovate for the customers!

“Failure and invention are inseparable twins. To invent you have to experiment, and if you know in advance that it's going to work, it's not an experiment.”

Jeff Bezos

This also means that leaders need to lead with instinct and be accountable for results while mobilizing our teams with inspiring vision.

Check out these Jeff Bezos Quotes related to Taking Bold Risks and Innovation, for some more inspiration:

“All of my best decisions in business and in life have been made with heart, intuition, guts… not analysis.”

“To get something new done you have to be stubborn and focused, to the point that others might find unreasonable.”

“I think frugality drives innovation, just like other constraints do. One of the only ways to get out of a tight box is to invent your way out.”

“You have to be willing to be misunderstood if you’re going to innovate.”

“We all know that if you swing for the fences, you’re going to strike out a lot, but you’re also going to hit some home runs.”

Some Learning Questions from Amazon’s Culture which Leaders should ask themselves:

  • Am I or my team being complacent when making decisions? 
  • Are we operating in Comfort zone, or challenging ourselves to always remain in Learning zone?
 
Okay, let’s keep moving.
 
 

8. Resist Proxies

This kind of goes hand in hand with the customer obsession. One of the other things I learnt as a leader from Amazon culture was that we should deeply understand our customer. 

“I’m not against beta testing or surveys. But you, the product or service owner, must understand the customer, have a vision, and love the offering. Then, beta testing and research can help you find your blind spots. A remarkable customer experience starts with heart, intuition, curiosity, play, guts, taste. You won’t find any of it in a survey.”

Jeff Bezos

Henry ford once quoted “If I had asked people what they wanted, they would have said faster horses.” This is so relevant to Amazon Culture as well. While research and data points would help in understanding the patterns etc., there is nothing as powerful as connecting with the customer in real life.

Checkout these inspirational quotes from Jeff Bezos related to resisting proxies and getting close to customers.

“Market research doesn’t help. If you had gone to a customer in 2013 and said, ‘Would you like a black, always-on cylinder in your kitchen about the size of a Pringles can that you can talk to and ask questions, that also turns on your lights and plays music?’ I guarantee you they’d have looked at you strangely and said, ‘No, thank you.'”

“Good inventors and designers deeply understand their customer. They spend tremendous energy developing that intuition. They study and understand many anecdotes rather than only the averages you’ll find on surveys. They live with the design.”

Some Learning Questions from Amazon’s Culture which Leaders should ask themselves:

  • Do we truly understand our customer and their needs?
  • What are the latent needs of my customer which can provoke an “aha” reaction?
  • Am I being over-reliant on research to tell me what my customer thinks?
 
 

9. Getting Best Talent

Talent is one of the key building blocks of Amazon Culture. There is very high rigor in making sure that only the best talent gets hired. As a leader in Amazon, one of the things which gotten etched in my hiring decisions is that when hiring new talent, I think about this critical decision making factor – “Is this person going to be better than at least 50% of the team which they are joining?” This makes us continuously raise the bar for our team.

“I’d rather interview 50 people and not hire anyone than hire the wrong person.”

Jeff Bezos

When talking about hiring in Amazon, its also important to understand this very interesting concept of Bar Raiser.

The Bar Raiser – Amazon is focused on hiring well, rather than hiring quickly. The Bar Raiser Program is just one example of why their hiring process is unique. A Bar Raiser is an interviewer at Amazon who is brought into the hiring process to be an objective third party and is able to evaluate the candidates on the leadership principles with a very unbiased lens. By bringing in somebody who’s not associated with the team, Amazon culture strives to make the best long-term decisions.

I love this quote from Jeff Bezos related to hiring best talent:

“During our hiring meetings, we ask people to consider three questions before making a decision…Will you admire this person?…Will this person raise the average level of effectiveness of the group they’re entering?….Along what dimension might this person be a superstar?”

Some Learning Questions from Amazon’s Culture which Leaders should ask themselves:

  • Am I raising the bar, with every new person I hire in the team?
  • Am I able to attract the best talent for my organization?
  • How can I bring more objectivity to my hiring process, to hire the best talent, every time?
 
Voila! This brings us to the last powerful element of Amazon Culture, which I am covering in this article.


10. Experimental Culture at Amazon

One of the other things I was always inspired by, as a leader in Amazon was the appetite to take risks and to experiment to continue to innovate for the customer. 

Teams do so many AB tests and continue to learn from them on a BAU (business as usual) basis. This Entrepreneurial culture at amazon really drives great stickiness for experimentation.

“To invent you have to experiment, and if you know in advance that it’s going to work, it’s not an experiment.”

Jeff Bezos

Here are some more quotes from Jeff Bezos, where he talks about the importance of experimentation.

“If you only do things where you know the answer in advance, your company goes away.”

“If you decide that you’re going to do only the things you know are going to work, you’re going to leave a lot of opportunity on the table.”

“People who are right a lot listen a lot, and they change their mind a lot. People who are right a lot change their mind without a lot of new data. They wake up and reanalyze things and change their mind. If you don’t change your mind frequently, you’re going to be wrong a lot. People who are right a lot want to disconfirm their fundamental biases.“

“If you double the number of experiments you do per year you’re going to double your inventiveness.”

“There’ll always be serendipity involved in discovery.”

“In the end, we are our choices. Build yourself a great story.”

Bonus: Well, I have a surprise in store for you! I am sharing one more very important element of Amazon Culture, which makes it such a successful organization, which continues to scale so rapidly.

Harnessing The Power Of Mechanisms

We see in small organizations, that as they continue to scale, a lot of chaos and ambiguity kicks in because they don’t have structured processes in place. One of the other things I learnt as a leader at Amazon was to create sustainable and self-powering mechanisms or processes, which reduce defects and automate/standardize the processes, so the teams can operate at scale with great consistency.

One of the examples which comes to mind is the mechanism of Andon cord.

What is Andon cord? The Andon Cord a concept that empowers operators to detect abnormal conditions and immediately stop work. Andon cord was introduced by Toyota and is one of the most well-known examples of the concept at work.

Well, coming back to mechanisms, Amazon has a system of Andon cord, where if the relevant team spots a defect in the item, they can “pull the cord” and take out the item from site (and then resolve the issue), to protect the customer experience.

Some Learning Questions from Amazon’s Culture which Leaders should ask themselves:

  • What processes do I have in place to create a flawless customer experience?
  • For recurring processes or work items, how can I create a standardized or automated mechanism?
 
There is so much to pick from Amazon’s Culture for Entrepreneurs and Leaders, that this one article may not suffice. I will continue to share more of my learnings and leadership experience on this blog, so do subscribe so you can stay tuned with the latest updates.
 

I hope you found value in this learning I shared by decoding the important aspects of Amazon Culture.

* Sources
https://www.indigo9digital.com/blog/14-inspiring-quotes-from-successful-retailers-about-life-and-business

https://www.aboutamazon.com

 

About the Author: Anurag Jain is an Ex-Amazon Category Lead and has 15+ years of leadership experience across International markets in Consumer and Tech businesses. You can follow Anurag Jain on Linkedin here and get interesting updates on Leadership & Coaching, Digital Marketing, Tech, Career Success Tips and much more.

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