Bob's Gutsy Leadership Blog

Amazon’s Secrets to Success

The article on Amazon’s master plan for success that appeared recently in the Atlantic magazine is a very interesting read. I was most impressed by the clear description of the core principles instilled by Jeff Bezos right in the beginning on how the company would operate. It outlines how the organization protects and effectively executes these principles on an ongoing basis. As I detail below, I also found it interesting how these principles are very similar to what I experienced at Procter and Gamble and Microsoft, the two companies where I spent 26 and 9 years respectively. Here are the principles:

1.) IQ is the Key Ingredient Sought in New Employees – As stated by the author of the Atlantic articles, “When Bezos created Amazon in 1994, he set out to build an institution like the ones that had carried him through the first three decades of his life. He would build his own aristocracy of brains, a place where intelligence would rise to the top. Early on, Bezos asked job candidates for their SAT scores, and would probe their logical acuity with questions like Why are manhole covers round.” With the boss establishing and consistently demanding implementation of this principle, it quickly became the mode of operation at Amazon.

a.) When I was at P&G, the brand management organization, which was the pipeline for top management at that company, tested for logic and quantitative skills in its recruits, and the results played a critical role in hiring. Microsoft questioned candidates with logic/quantitative thinking puzzles just like Amazon.

2.) Immediate, Frank Feedback is Critical in Setting Performance Standards – As the Atlantic article points out, when Bezos was molding his organization in the beginning, he often lashed out at those who failed to meet his high standards. Much has been written of his classic cutting remarks such as “Are you lazy or just incompetent?” “This document was clearly written by the B team. Can someone get me the A-team document?” “Why are you ruining my life?” But, with time, Bezos’s endless questioning, intelligence and attention to detail elicited admiration, and resulted in very high standards in thinking and analysis.

a.) While P&G was very effective in regularly providing feedback, its methods were far more tactful. Microsoft was much like Amazon

3.) Clarity of Communication and Thinking – Bezos insists that proposals be pitched in six-page memos, written in full sentences; a form he describes as “narrative.” His theory is that if you can’t write it out, you are not ready to defend it. What he is really doing is demanding that individuals take the time to think things out thoroughly and make sure the facts support what is being proposed.

a.) At Procter & Gamble, there was nothing more sacred than the concise, 4-6-page memo that recommended a specific action. It contained the necessary background, a clear enumeration of the key facts, the conclusions from those facts, and the rationale for the recommendation. This was instilled in the 1940’s when the core fundamental of the P&G brand management system were established.

Most strong leaders know that these principles are as critical today as ever, even though HR personnel sometimes attempt to fog things up a bit with a dose of political correctness!

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