Certain firms over the years have become high-profile models of management, celebrated for their organizational brilliance. General Motors and General Electric each had long periods in the spotlight. Google has been the most recent exemplar, but it is now being eclipsed by another digital darling, Amazon.
Sometimes the acclaim is premature, for what turns out to be pixie dust. Or maybe an effective strategy and luck obscured serious cultural or organizational deficits, as with Enron. So it pays to be cautious, or draw lessons that seem unlikely to be challenged even if the company tumbles.
So let’s start with Amazon’s policy of starting meetings with everybody quietly reading a six-page report on each item they will consider (cut to two pages where appropriate). Before discussion, they share a common framework and a bit of tranquil time together amid the daily swirl. That doesn’t ensure people won’t go off in different directions, given their biases or the areas of the company they represent, but it does seem to provide focus and some agreement on facts rather than having participants coming to the meeting unprepared and winging it with favourite anecdotes. It also forces the person proposing an idea to give it thorough consideration.
“Writing the six page narratives forces the author to conduct complete analysis, to distinguish between subtle nuances, to articulate the inner logic and set priorities for various ideas, and take full accountability for specific proposals. There is no wiggle room, no hiding place, no safe haven,” famed counselor to CEOs Ram Charan and consultant Julia Yang write in The Amazon Management System. At the very least, it’s something you could try in your own situation, experimenting with important meetings first.
Founder and CEO Jeff Bezos tries to maintain a “Day 1” culture, nimble and accepting risk, to avoid freezing up and defending the present, as often happens when companies grow large, then decline. He is customer-obsessed – the book calls it “true customer obsession,” a lovely phrase since many customer-obsessed organizations aren’t really. Mr. Bezos has warned of the danger of managing for proxies rather than customers, a chief proxy being trying to satisfy your existing processes, which can become ends in themselves.
Amazon tries for high-velocity decision-making. “Not every decision needs to go all the way to the top, to wait for all the information, and to require lengthy approvals and the agreement of all,” Mr. Charan and Ms. Yang write. In particular, the company distinguishes between Type 1 and Type 2 decisions – the former are the consequential, irreversible decisions that seal a door behind you that you can’t return through while the others are changeable and reversible. “You don’t have to live with the consequences for that long. You can reopen the door and go back through,” Mr. Bezos explained in his 2015 shareholder letter.
In his first shareholder letter in 1997, he declared an important part of his philosophy: “It’s all about the long term.” He frustrated investment analysts by not seeking higher profits early on, content to build.
Amazon has adopted the flywheel concept advocated by Good to Great author Jim Collins, a virtuous circle in which efforts build endlessly on one another. For Amazon: Lower prices leads to more customer visits, which attracts more third-party sellers, which expands the Amazon store’s selection, which grows revenues on the same fixed costs, which allows lower prices, allowing the flywheel to spin again and again.
Consultant Steve Anderson, who in The Bezos Letters shared 14 principles for success from those annual shareholder missives, says “building your business within the framework of your flywheel encourages companies to think long-term and filter activities through its bigger flywheel goals. Otherwise you could waste time and money on activities that might be profitable in the short-term but don’t help to build or keep your core momentum going.” Many companies lurch, changing their strategy on a whim. The flywheel is more enduring.
I hadn’t seen much attention to recruiting by Amazon until the Charan-Yang book. They note Mr. Bezos’s commitment to finding the right people was exemplified by lining up the best programmers for his startup even before he informed his existing employers he would be leaving for the new enterprise. The company has an unusual group of specially trained “bar raisers” who sit in on interviews to uphold the highest hiring standards, assigned to recruiting situations outside their own departments to avoid conflicts. The bar raiser retains veto power to reject a candidate and helps train recruiters to be better.
It’s notions like the bar raiser and the six-page narratives that set model management companies apart. General Motors had such flourishes in the 1950s, GE in the 1990s, and Amazon today. Not everything they do is golden. But we can learn from them.
Cannonballs
- Agendas are cited by most experts as vital for meetings. But Steven Rogelberg, a professor at the University of North Carolina says research shows that just having an agenda does not equate to having a successful meeting. However, he prefers one, and suggests it be structured as a list of questions that need to be answered during the session.
- Ralph Waldo Emerson would often start conversations with “Tell me, what’s become clear since we last met?” That prompts reflection, which is the key to motivation says consultant Susan Fowler, urging you to try that phrase instead of “How are you?”
- Leadership coach Dan Rockwell says you should overcommunicate on immediate goals, purpose, heart intentions (“everyone needs to know the good that is in your heart”) and the wins your team is achieving so they can celebrate.
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Harvey Schachter