Amazon’s Path to Sustaining Innovation
Amazon CEO Andy Jassy emphasizes the importance of operating like the world’s largest startup to maintain a culture of innovation. In his latest annual letter to shareholders, Jassy outlines seven key strategies that enable Amazon to continue delivering for its customers.
1. Customer-Centric Approach
The first principle is to focus on solving real customer problems or significantly improving customer experiences. Jassy warns that companies can lose track by prioritizing technology over customer needs. Great startups, including Amazon, are driven by a mission to change what’s possible for customers.
2. Embracing Inventors
Amazon looks for ‘builders’ – inventors who constantly analyze customer experiences and seek improvements. These individuals are characterized by their dissatisfaction with the status quo and their drive to make things better.
3. Ownership Culture
The company fosters an ownership culture by hiring smart, motivated, and inventive people who act as if they own the company. This means asking themselves what they would do if it were their own money or if they were the majority owner. This culture promotes accountability and deep care for the quality and effectiveness of their work.
4. Speed Matters
Jassy emphasizes that speed is crucial for every business. He argues that it’s a false dichotomy to say you can either move fast or deliver high standards. Amazon has demonstrated that it’s possible to be both fast and maintain high quality. Leadership commitment and a culture that embraces speed are essential.
5. Eliminating Bureaucracy
To gain speed, Amazon is working to eliminate unnecessary bureaucracy. Jassy distinguishes between necessary processes and bureaucracy, noting that the latter slows down progress and frustrates employees. The company has already made over 375 changes based on employee feedback to reduce bureaucracy.
6. Being Scrappy
Amazon aims to maintain a ‘scrappy’ approach, remembering how things started. Jassy cites examples like Amazon S3 and EC2, which were built with small teams. The best leaders achieve more with fewer resources, priding themselves on being lean.
7. Taking Risks and Focusing on Results
The final two principles are about being willing to take risks and focusing on delivering compelling results for customers. Jassy notes that achieving something extraordinary requires taking risks and not playing it safe. The ultimate measure of success is what gets done for customers, not personal charisma or management skills.
By following these seven principles, Amazon continues to operate like a startup, driving innovation and customer satisfaction. For more details, readers can refer to Jassy’s full letter to shareholders.
