Jeff Wilke may no longer be one of the most powerful executives at Amazon, but that doesn’t mean his standards for Amazon’s customer service have relaxed.
Wilke, who oversaw Amazon’s global consumer retail business and worked at the company for over 21 years, told Los Angeles tech and startups publication dot.LA in a recent interview that despite his departure from Amazon, he’s still paying close attention when, say, a package doesn’t arrive on time – and his former employees are going to hear about it.
“I mean, the team knows any time there’s a defect, I’m going to send an email and that’s not going to change,” Wilke said.
Wilke announced last August that he would be stepping down from his role as CEO of worldwide consumer in early 2021 in order to “explore personal interests that have taken a back seat for over two decades,” he wrote in a letter to employees. He’s recently been angel investing in a range of shipping, manufacturing, and biotech startups, according to dot.LA.
Dave Clark, Amazon’s former senior vice president of worldwide operations, replaced Wilke as Amazon’s consumer chief.
Since his departure, Bezos has also announced that he plans to step down from his role as CEO this year, with Jassy taking his place. Wilke told dot.LA that he had “never really thought about” whether he’d be picked as the next CEO of Amazon because he “always imagined Jeff doing it forever.”
When asked if he was surprised when Bezos announced his departure, Wilke responded, simply, “Yes.”
The Fast Company piece documented this little-known anecdote from the e-commerce behemoth’s beginning days as an online book seller. The company’s first logo read “Amazon.com” with a slight frowning orange line below. Then, more than two decades ago, Bezos met with a branding agency and shared his grandiose plans for Amazon to sell everything – even furniture, the article said.
The company came back with a logo that dropped the “.com” and flipped the swoosh into the famed smile recognizable worldwide today. The smile points from A to Z, a message indicating the range of products now sold on the platform.
Though Amazon has stuck with the smile since that pinnacle meeting, the branding has continued to change. For example, the company dropped “Amazon” from its Prime brand. Prime Video and Prime Now also became stand-alone phrases. The smile remained with each, though the color for Prime members is a soft blue, instead of the orange. The move reflected Prime’s growth to more than 100 million payers in 2018.
Recently, the company rebranded its app logo to a blue-taped box with the iconic orange smile. Critics said the logo reminded them of Adolf Hitler’s mustache, so Amazon abruptly made changes to the image.
The article added that instead of a well-branded business, Bezos succeeded in designing a customer-first company with his razor-sharp focus on buyers. That design, though, has come at the expense of thousands of workers and the environment, Fast Company said.
The company has been under scrutiny as thousands of workers at the Bessemer, Alabama, have voted on whether to unionize, grabbing the attention of Sen. Bernie Sanders, who said they should be able to negotiate for better wages. Drivers for the e-commerce giant have said their working conditions are inhumane, noting they have often peed in bottles.
“Amazon is a great place to work with highly competitive pay, benefits from day-one, and training programs for in-demand jobs,” the company said in an emailed statement to Insider. “This includes a starting wage of $15/hour, health insurance, up to 20 weeks of paid parental leave, and company-funded upskilling opportunities. As we always have, we constantly evaluate our processes and policies while listening to employee feedback, and encourage associates to bring their comments, questions and concerns directly to their managers.”
Much of the coverage of Jeff Bezos’s recent announcement that he plans to cede the CEO role at Amazon noted the retailer’s idiosyncratic corporate practices. Perhaps most famous of them is the fact that important meetings at Amazon begin with 20 minutes of silence. During that time, executives quietly read six-page narrative memos presenting the matter to be discussed.
Two Amazon alums, Colin Bryar and Bill Carr, just published a book called “Working Backwards” that walks in detail through how the company arrived at such singular practices. It offers advice on how you might adopt them at your own workplace (assuming, for example, you and your colleagues are game to spend long stretches reading in each other’s company.)
The book’s name comes from Amazon’s product development process, which involves working backwards from the desired customer experience to decide what to build.
Bryar worked at Amazon for 12 years as an executive, including two where he was Bezos’s technical advisor, effectively his chief of staff. (Bryar was preceded in that role by Andy Jassy, the incoming CEO.) Carr was at Amazon for 15 years and played a lead role in its digital media businesses, including Prime Video and Amazon Music.
At the core of Amazon’s approach are 14 leadership principles, first codified in 2005 as 10 principles. They start with “customer obsession” and taking ownership but also include quirky statements such as “leaders are right a lot” and “leaders do not believe their or their team’s body odor smells of perfume.” (That’s part of a principle about being self-critical.) Amazon job interviews are structured to probe whether the candidates demonstrate aptitude for each of the principles. You can read the full list on Amazon’s website.
Bryar and Carr cite a saying repeated at Amazon: “Good intentions don’t work. Mechanisms do.” (p. 17) The company has tried to systematize its practices – or mechanisms – amid its rapid growth. Here are some of the more interesting ones:
The six-page memo. The company in 2004 banned PowerPoint, which until then had been the default for its managers. The reasoning was that six-page narrative memos were much better at conveying the nuances of a business than bullet-pointed slides, and that preparing the memos was valuable for forcing teams to refine their ideas. Amazon executives spend the first part of the meetings reading the memos, so everyone is focused on the matter and discussions pick up from there. Bryar and Carr include an example memo (p. 84) and suggestions for how to approach them. They relate that Bezos, among the most engrossed readers of the memos, said that he reads them assuming each sentence wrong until he can prove otherwise.
Product design by press release. Often before they commit to building new products or services, Amazon managers write fake press releases describing them. The idea – central to the “working backwards” approach – is to clarify what the benefit to the customer will be, and magnify the focus on what will differentiate this product from anything else. The short press releases are followed by FAQ sections, which aim to address some of the most pointed questions facing the project. They write the press releases so early in coming up with an idea that most of the new products in the releases are never pursued.
“Bar raisers” for hiring. Specially trained Amazon employees participate in the hiring process as “bar raisers,” providing a dispassionate view on whether the desired candidate is right for the company and wielding a (rarely exercised) veto over the final decision. The idea is to counterbalance many managers’ tendency to want to hire quickly so not to fall behind, and to ensure the process is thorough and structured properly. Bryar and Carr detail the structure, which includes assigning members of the hiring committee specific company principles to probe the candidate on, and written interview reports they’re required to complete.
A focus on “controllable input metrics.” Managers traditionally focus on the output metrics of a company, like revenue and profit. But Amazon believes that managers should focus at least as much on the metrics for inputs they directly control – such as product selection, price, or convenience – that ultimately have the greatest impact on the outputs. Bryar and Carr spend a lot of time on how Amazon leadership uses such data, and acknowledge that there’s a lot of trial and error involved in determining the right input metrics to track.
Vesting responsibility and control in a single project leader. The authors write that Bezos has been obsessed as the company has grown with minimizing the coordination and communication required of teams for them to move forward with a project, and ensuring that someone is totally focused on its success. One part of the approach was to have “two-pizza” teams – groups of 10 or fewer employees (the number that could be fed by two pizzas) with responsibility for specific product initiatives. That evolved over time into what it calls a “separable, single-threaded team” which has relative autonomy and works only on the specific feature. Amazon’s approach is similar to how Apple has a “directly responsible individual” charged with making sure a project gets done.
To be sure…
This book is very careful to not veer into anything sharply critical, and completely omits any discussion of controversial topics like Amazon’s labor practices. As I was reading the section about how great its hiring process is, I kept thinking back to all of the stories about executive mis-hires in Brad Stone’s “The Everything Store” that weren’t acknowledged here. (Stone has another book on Bezos and Amazon due out in May, which will surely be more critical than “Working Backwards.”)
The authors left Amazon in 2010 and 2014. They note in places that what they’re writing is based on conversations with other executives there since then. But presumably some of the practices described in the book have changed, or will eventually. Which makes this less of a static rule book, and more of a menu of ideas you could try in your own organization.
The second section of the book describes how Amazon’s practices and leadership principles applied in the creation of the Kindle, Amazon Prime, Prime Video, and Amazon Web Services. As recounted, a lot of that history is familiar, and adds little to the understanding of the practices detailed in the first half. You could read just up to page 151 and take away most of the lessons of the book. For those wanting an even quicker read, Bryar and Carr nicely summarize the takeaways from the book in a two-page section beginning on page 261.
Memorable anecdotes and trivia:
Bezos always wanted the company to underpromise and overdeliver in order to exceed customer expectations. Early on, the company said on its site that it was shipping books by first-class mail, when in fact it was generally sending shipments by faster priority mail and then telling customers in confirmation emails that they had gotten a complimentary upgrade. (p. 9)
Amazon once had an elaborate system it called New Project Initiatives used to prioritize what teams hoped to pursue every quarter. The process was onerous and too frequently disheartening, as a faceless process effectively killed off some of the best ideas. (p. 61)
In early 2004, Bezos and Bryar on a business flight read an essay titled “The Cognitive Style of PowerPoint: Pitching Out Corrupts Within,” by information visualization specialist Edward Tufte, which crystallized their thinking about the need to ditch PowerPoint. “From now on your presentation software is Microsoft Word, not PowerPoint. Get used to it,” Tufte advised. (p. 81)
Every two years, corporate executives including Bezos had to spend a few days as a customer-service agent. One day while Bezos was shadowing an agent, she took a call from a customer whose furniture had arrived damaged and knew which item it was because there had been recurring issues. That led Bezos, inspired by the Toyota idea of an Andon Cord, to add big red buttons to agents’ product screens that would let them freeze the sale of any item until a problem was resolved. (p. 146)
Prior to the launch of the Kindle, Carr didn’t think Amazon should make its own e-reader hardware, because of the expense and its lack of experience doing so. But his boss used the press release technique, and said that the company needed to build or buy the hardware expertise required to make a reading device that was tightly integrated with its e-book store. (p. 178)
Bezos sent senior Amazon executives an email in mid-October 2004 saying that the company needed to build and launch a shipping membership program by the end of the year. He gave the executives just 11 weeks during its busiest sales season to develop what would become Amazon Prime, announced only slightly behind his desired timeline in February 2005. (p. 188)
“Our culture is four things: customer obsession instead of competitor obsession; willingness to think long term, with a longer investment horizon than most of our peers; eagerness to invent, which of course goes hand in hand with failure; and then, finally, taking professional pride in operational excellence.” – Bezos (p. x)
“In a period of torrid headcount growth, founders and early employees often feel that they’re losing control of the company – it has become something different than what they set out to create. Looking back, they realize that the root cause of the problem can be traced to an ill-defined or absent hiring process. They were hiring scores of people who would change the company culture rather than those who would embody, reinforce, and add to it.” (p. 32)
“I heard [Bezos] say many times that if we wanted Amazon to be a place where builders can build, we needed to eliminate communication, not encourage it… Jeff’s vision was that we needed to focus on loosely coupled interaction via machines through well-defined APIs rather than via humans through emails and meetings.” (p. 61)
“The best way to fail at inventing something is by making it somebody’s part-time job.”- Amazon executive Dave Limp (p. 75)
“Be stubborn on the vision but flexible on the details.” (p. 78)
“We had freed ourselves of the quantitative demands of Excel, the visual seduction of PowerPoint, and the distracting effect of personal performance. The idea had to be in the writing.” (p. 104)
The bottom line is that “Working Backwards” is a thought-provoking read if you’re looking for ideas for how to work differently or improve how your team or your organization operate. For me, it was like reading Ray Dalio’s “Principles” – you might disagree with some portion of the authors’ views, but you can constructively engage with them. And it’s a book from which you can take away useful practices – like six-page memos, bar raisers, or fake press releases – even if you only read half of it.
All page numbers referenced above are for the hardcover edition.
Kevin J. Delaney is cofounder of Reset Work, a newsletter about managing yourself, your team, and your business in this moment and beyond. He was formerly a senior editor at The New York Times, founding editor in chief of Quartz, and managing editor of The Wall Street Journal Online. Sign up for Reset Work’s free newsletter.
Earlier this month, Amazon CEO Jeff Bezos announced that Andy Jassy would succeed him as CEO. I think the succession process was well received and it presents five lessons for business leaders.
1. Decide what strengths your successor will need to keep your company growing
The first step in picking a successor is to try to imagine what the most important skills your company will need at the top are in order to continue to grow after you leave. If you’ve founded a company and made it successful, your successor should embody its culture because your employees will lose motivation if the culture changes.
At the same time, you do not want your successor to slavishly replicate everything you think and do – which I call a Head in the Sand strategic mindset in my new book, “Goliath Strikes Back.”
Instead your ideal follower could be a Fast Follower – someone who can perceive an exciting growth opportunity, formulate a strategy to capture that growth, assign talented people to execute the strategy, and hold them accountable for results.
That is what Sam Walton did when he appointed David Glass as his successor. Glass launched Walmart’s 1987 move into groceries – which by 2019 was the largest grocery business in the country. As I wrote in my book, Glass, saw offering groceries as a way to save time for consumers by enabling them to one-stop-shop.
Glass exemplified how to succeed a charismatic founder – humbly lead a team that follows the founder’s principles. As Glass explained in 2004, “Most people have enough ego that they want to distinguish themselves from a charismatic leader, and that’s what creates the problem. I have never had much ego, and I am not worried about things like that. I am more interested in the satisfaction that we are doing the right things and … being part of a winning team.”
2. Begin grooming your successors at least five years before you want to leave
The ultimate aim of grooming your successor – particularly for leaders of public companies – is to plan the process so well that when it finally happens, your company’s employees, customers, and investors take it in stride.
Many years ago, Bezos put two top executives in positions of major responsibility. Jeff Wilke was CEO Worldwide Consumer and Andy Jassy – who has worked at Amazon since 1997 and created and built AWS into the leader in cloud services – was CEO of Amazon Web Services (AWS).
When Wilke announced last August that he would retire this year, I was shocked. In retrospect I should have seen it as a sure sign that Bezos was indeed planning to leave as Amazon CEO and that Wilke had lost out in the race to succeed him.
3. Set clear criteria for evaluating the rivals for the top job
If you have completed the first step – thinking about the skills your company will need in a future CEO – you should have little difficulty setting criteria for choosing the winner from among the candidates.
I do not know what criteria Bezos set for choosing his successor – but here’s my guess:
A track record of making outstanding decisions informed by relevant available data.
Acts according to the values that make Amazon successful.
The ability to manage people to achieve excellent performance.
A record of creating significant new sources of revenue and profit.
The ability to to manage difficult legal and regulatory matters.
You should set criteria along these lines when evaluating potential successors.
4. Keep delegating more responsibilities to ease the transition
Over the last several years, Bezos has been delegating more operational responsibilities to his top executives. According to the Wall Street Journal, Bezos had stepped away from running the day-to-day operations of Amazon – that is until the pandemic hit last spring.
Amazon’s board had become more forceful about succession planning after Bezos survived a 2003 helicopter crash in Texas. After appointing Wilke and Jassy as CEOs of the company’s retail and AWS operations in April 2016, Bezos devoted himself to new products such as the 2014 Amazon Fire Phone that flopped and the successful Echo speaker, noted the Journal.
5. Aim for a hiccup-free announcement of your successor
In an ideal world, you would announce your replacement as CEO on the same day that your company reported very strong financial results. It would be even better if investors boosted your stock that day and accepted the announcement of your successor with a shrug.
That is exactly what happened when Bezos announced that Jassy would take over as CEO later this year. Meanwhile, as Executive Chair, Bezos will not be going away completely – and he will be able to work on projects aimed at boosting Amazon’s growth.
News that Amazon’s incoming CEO is Andy Jassy is raising advertisers’ hopes that he’ll help solve some of their longstanding gripes about the company, Lauren Johnson reported.
Advertisers have long wanted more data to see if their ads grow awareness and lead to sales, and they’re speculating that he’ll bring together disparate parts of the company and bring more measurement to ads.
They point to his leadership of another growth business, AWS, and its cloud products that could help improve the accuracy of ads.
People are changing viewing habits while avoiding ads more than ever. Advertisers are seeking fewer big, multi-year contracts, while getting their message out is becoming more complicated than ever. Many are abandoning agencies altogether, figuring they can do the work better internally.
Main seems like he has as good a shot as anyone at turning around an agency, having built Deloitte Digital into a big business. But with big contracts being a thing of the past, its comeback could be more a plodding one than a roaring one.
As one exec put it: “I fully think Andy has the will and ambition. The main thing we’re struggling with right now is the work; it’s project by project.”
The coronavirus pandemic has not only accelerated legacy media’s push into streaming but influenced the kind of entertainment Disney, WarnerMedia, Netflix, and others are leaning into, namely, big franchises, Travis Clark reports.
The most notable example is Disney Plus’ “Star Wars” series, “The Mandalorian.”
Netflix and Amazon are building up their franchise content, too. Netflix has new teams dedicated to event/spectacle and franchise TV shows and also has its sights on video-game IP.
Disney has plans for 10 “Star Wars” and 10 Marvel TV shows exclusive to Disney Plus, and WarnerMedia is planning DC movie spinoffs.
That’s good news for franchise fans, but those craving the next feature film may have to be patient.
Jeff Bezos’ successor as Amazon CEO, Andy Jassy, made his mark on the company by building its hugely successful cloud computing service Amazon Web Services (AWS).
But as CEO, Jassy’s best move might be to cut off AWS from the mothership, former AWS exec Tim Bray told Insider on Thursday.
Bray was an AWS vice president and distinguished engineer who worked at Amazon for five years before publicly quitting in May 2020. At the time, Bray published a blog post saying he was resigning in protest at the company firing warehouse workers who raised concerns about working conditions during the pandemic.
Bray, who reported to Jassy during his time at Amazon and praised his management in a quote to Insider’s Eugene Kim and Ashley Stewart, told Insider there were “a bunch of good reasons” for Amazon to spin off AWS.
Jassy has said in the past that Amazon is not looking to spin AWS out – an understandable position, given what a money maker the division has become. But Bray said an increasingly hostile antitrust landscape, combined with business incentives, could make it a wise move.
Amazon’s continued expansion into different business sectors means AWS’ customers may increasingly also be Amazon competitors, and therefore Jassy might be reluctant to shovel lots of money into AWS in future, Bray said. “I think that in itself is a large and growing headwind for AWS and is not going to get any better,” he said.
It would be possible for Amazon to cut ties with AWS without totally sacrificing its cash-cow status, he said.
“You can imagine a maneuver where AWS does an IPO, does a cash payment to Amazon of 50 to 100 billion or something like that,” he said, citing an Economist article from June 2020 that gave AWS a “plausible” valuation of $500 billion.
“Why on earth should an online retailer, a cloud computing company, a smart speaker company, an organic supermarket company, and a video production company all be conglomerated into one corporate entity controlled by one person?,” Bray said at the time.
Bray: Jassy could get ahead of regulators by spinning off AWS
Bray told Insider on Thursday that Jassy could spin off AWS before it starts to heap more regulatory scrutiny on Amazon.
“If [spinning off AWS] is going to happen, Amazon would be better off to do it under their own volition in a planned way as opposed to the Justice Department pointing a gun at their head.”
Bray said cloud computing could become a big target for lawmakers looking to rein in Big Tech, as the market is essentially dominated by Amazon, Google, and Microsoft. As of Q4 2020, Amazon’s market share totalled more than Google and Microsoft’s combined, per data from analytics firm Canalys.
He said the wealth of Big Tech antitrust concerns gives Amazon some wiggle room. “It’s an issue, but I think there’s lots of other, hotter ones in the queue in front of it,” he said.
Google and Facebook’s ad business is the “biggest, softest target of all of them,” Bray said. Other big targets are Google’s wider business and Apple’s online services business, which is already starting to draw the attention of regulators both in the US and the EU.
The antitrust pressure from Washington looks set to mount rather than wind down. Sen. Amy Klobuchar has become the new chair for the Senate Judiciary subcommittee on antitrust, and has made it clear that Big Tech is in her crosshairs. On Thursday, she introduced a bill that would grant antitrust enforcement agencies sweeping new powers, including the ability to impose massive fines of 15% on companies’ annual revenue.
Bray said Jassy would have to navigate the ongoing “techlash,” and suggested that he may do a better job than Bezos.
“Jeff has obviously been an outstanding executive. Has he done a very good job of positioning the company in the public mind? Not really, I wouldn’t say. He’s not a gifted communicator to the public,” he said.
“Maybe Andy will do better at that, because I think they need that,” he added.
Shares in Amazon dipped on Wednesday after Jeff Bezos announced plans to step down as CEO and transition to executive chairman following a strong fourth-quarter.
The company delivered a strong beat on fourth-quarter earnings as its revenue grew 44%, topping $100 billion in a quarter for the first time. But its shares were trading around 1% lower at $3,348 per share at the market open.
AWS CEO Andy Jassy is to replace Bezos as Amazon’s CEO. Although the company may lose some of the vision of its founder, Amazon is still “very well placed for future growth disrupting more trillion dollar industries,” said Christopher Rossbach, CIO of asset management company J. Stern & Co.
The fact that the company broke records yet again this past holiday season, when its Prime delivery services were in high demand, goes to show that it’s “almost impossible” for any other retailer to match Amazon, Rossbach said. But after a defining year, it could be difficult to replicate the outsized growth it had in 2020.
Investors must focus on the Amazon Prime membership base, which is expected to double in market share over the next decade, helping its stock rocket higher, he said.
Further, incoming CEO Jassy’s ascension from the AWS team is seen as a positive for Amazon.
Jassy fully understands the wealth of assets across Amazon’s flywheel of operations and the move should afford Bezos more time to focus on big new bets for the company, according to Nicholas McQuire, vice president of enterprise research at CCS Insight.
“The key question will be how Jassy manages some of the inevitable bumps in the road Amazon will face with issues like anti-trust, workers’ rights and employee activism on this rise,” he said.
Separately, Wedbush raised its price target on Amazon to $4,000 from $3,900 on Wednesday and reiterated an “outperform” rating. Analysts said it wasn’t clear Bezos would actually withdraw from day-to-day oversight of the business, and expected him to continue to be integrally involved in company strategy.
Amazon’s stock has jumped roughly 70% over the past year. But since its last reported earnings in October, the stock has seen only a 6% increase, well below the broader S&P 500’s 16% rise in the same period.
Jeff Bezos may be stepping down as Amazon CEO, but he’s not going anywhere – in fact, he’ll still be involved in major, “one-way door” decisions at the company.
Bezos, 57, announced on Tuesday that in the third quarter of 2021, he’ll move into a new role as executive chairman of Amazon’s board. Andy Jassy, the current CEO of AWS, will take his place.
“Being the CEO of Amazon is a deep responsibility, and it’s consuming. When you have a responsibility like that, it’s hard to put attention on anything else,” Bezos wrote, adding that he’ll be focusing his time on his philanthropy, as well as the two companies he owns: the Washington Post and space company Blue Origin.
But Bezos said that while he’s handing over day-to-day management of the company to Jassy, he’ll still be “engaged in important Amazon initiatives,” a sentiment Amazon executives echoed during a conference call following the company’s fourth-quarter earnings report on Tuesday.
“Jeff is not leaving, he is getting a new job,” Brian Olsavsky, Amazon’s chief financial officer, said during the call.
“He will be involved in many large ‘one-way-door’ issues, as we say – ‘one way doors’ meaning the more important decisions, things like acquisitions, things like strategies, going into grocery and other things,” Olsavsky said. “So, Jeff’s always been involved with that and that’s where he’ll keep his time focused in his new role.”
Olsavsky added that Amazon is “very happy to see both Jeff and Andy get new perspectives” and that Jassy will have the opportunity to put his imprint on Amazon.
One type, he wrote, is like walking through a standard door: If you’re not happy with your choice, you can always walk back through it. The other type is a one-way door – it’s not reversible, so you have to be very careful about making that kind of decision, he wrote.
But Bezos has also warned others against making too many “one-way-door” decisions.
“The end result of this is slowness, unthoughtful risk aversion, failure to experiment sufficiently, and consequently diminished invention,” Bezos wrote in 1997. “We’ll have to figure out how to fight that tendency.”
The story goes that broomball was introduced by one of Amazon’s vice presidents at a company conference. The setup of the game, Stone recounts, was a bit unorthodox: “players swatted a kickball on the lawn with brooms and other random implements from his garage,” he wrote.
Though the image of two leaders of one of the most influential companies in the world brandishing broomsticks may be funny, Stone recounts “an undercurrent of intense competition” during the game that was typical of Bezos’ expansionist worldview.
“In other words [broomball] perfectly expressed the temperament of Jeff Bezos, who stopped by the meeting and threw himself into the inaugural Amazon broomball contest with gusto. At one point, Andy Jassy, then a new recruit from Harvard, made his first significant impression at the company by inadvertently hitting Bezos in the head with a kayak paddle. Later, Bezos dove after the ball into some hedges and tore his blue oxford shirt,” Stone wrote.
It’s safe to say Bezos has since forgiven his successor for the accidental transgression.