Learn From Amazon’s Leadership Principles
- by Raj Bharti
Amazon is a crazy company. Within two decades, this bookseller has become a competitor of every single industry leader across retail, publishing, logistics, wireless, toys, devices, apparel and cloud computing, to name a few. It’s now peak season at the world’s largest online retailer, and workers are burning the midnight oil delivering millions of packages across the globe for the holidays.
The company has a unique culture of hiring and developing leaders with a focus on the 14 Amazon leadership principles that have guided and shaped the company’s decisions and its distinctive entrepreneurial, cutting-edge and Darwinian culture. These Amazon leadership principles were set in stone to build a strong entrepreneurial and highly execution-based culture. Every Amazon employee is expected to adhere to these principles, and the firm tests all future hires on the same criteria.
Establishing corporate values is not an innovation of course. Johnson & Johnson has its “Credo.” General Electric follows its Leadership, Innovation and Growth (LIG) mantra. Even mischievous Enron and Bear Stearns had their values inked on the paper. It is easy to assemble commonsense leadership principles and display them on walls and websites, but putting them into practice on a daily basis is a much harder task.
Amazon puts others’ money where its mouth is. Whether you are an individual contributor or the manager of a team at Amazon, you are an Amazon leader and you are guided by these 14 Amazon leadership principles.
Customer centricity or obsession with customers tops the list, and Amazon’s obsession with customers, frugality and bias for action are hard to miss. Other values, however, may be less visible to outsiders. I tend to believe that Amazon has succeeded at adhering to its leadership principles somewhat better than many other corporations as Amazon’s values actually get to see the light of implementation beyond its walls and websites.
Since one size doesn’t fit all, some of Amazon’s values may not be the best fit for your organization or personal life, so customize them for your vision or try them at your own risk. These principles are available on Amazon’s website and I have listed them below (nearly verbatim) for the readers to interpret in their own way:
1. Customer Obsession
Leaders start with the customer and work backward. They work vigorously to earn and keep customer trust. Although Amazon leaders pay attention to competitors, they obsess over customers.
Leaders are owners. They think long term and don’t sacrifice long-term value for short-term results. They act on behalf of the entire company, beyond just their own team. They never say “that’s not my job.”
3. Invent and Simplify
Leaders expect and require innovation and invention from their teams and always find ways to simplify. They are externally aware, look for new ideas from everywhere, and are not limited by “not invented here.” As we do new things, we accept that we may be misunderstood for long periods of time.
It’s not an experiment if you know it’s going to work.
4. Are Right, a Lot
Leaders are right a lot. They have strong business judgment and good instincts.
5. Hire and Develop the Best
Leaders raise the performance bar with every hire and promotion. They recognize exceptional talent, and willingly move them throughout the organization. Leaders develop other leaders and take seriously their role in coaching others.
6. Insist on the Highest Standards
Leaders have relentlessly high standards, so high that many people may think these standards are unreasonably high. Leaders are continually raising the bar and driving their teams to deliver high quality products, services and processes. Leaders ensure that defects do not get sent down the line and that problems are fixed so they stay fixed.
Thinking small is a self-fulfilling prophecy. Leaders create and communicate a bold direction that inspires results. They think differently and look around corners for ways to serve customers.
8. Bias for Action
Speed matters in business. Many decisions and actions are reversible and do not need extensive study. We value calculated risk taking.
We try not to spend money on things that don’t matter to customers. Frugality breeds resourcefulness, self-sufficiency and invention. There are no extra points for headcount, budget size or fixed expense.
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.”
10. Vocally Self Critical
Leaders do not believe their or their team’s body odor smells of perfume. Leaders come forward with problems or information, even when doing so is awkward or embarrassing. Leaders benchmark themselves and their teams against the best.
11. Earn Trust of Others
Leaders are sincerely open-minded, genuinely listen, and are willing to examine their strongest convictions with humility.
12. Dive Deep
Leaders operate at all levels, stay connected to the details, and audit frequently. No task is beneath them.
13. Have Backbone; Disagree and Commit
Leaders are obligated to respectfully challenge decisions when they disagree, even when doing so is uncomfortable or exhausting. Leaders have conviction and are tenacious. They do not compromise for the sake of social cohesion. Once a decision is determined, they commit wholly.
14. Deliver Results
Leaders focus on the key inputs for their business and deliver them with the right quality and in a timely fashion. Despite setbacks, they rise to the occasion and never settle.
Ideas are a dime a dozen, only execution matters. Which one of these principles do you find relevant and why? What’s your plan to implement some of these ideas in your organization or personal life? Please share your views in the comment box below, so that we can all learn from your experience and insight.
(Credits: Thanks to my friend Erica Stephens, a former Amazonian (and current Wharton MBA for Executives student), for being my best critic.)
Editor’s note: The original version of this post appeared on LinkedIn on Dec. 3, 2014.