Jeff Wilke, Senior VP of Consumer Business at Amazon.com, participated in the Albers Executive Speaker Series on May 13th. The title of his presentation was, "Amazon.com: Our Peculiar Leadership Principles." It was a great opportunity for our students to learn about the company culture and to discover what lies behind the success of Amazon. Wilke has been with Amazon since 1999 and is widely credited with driving Amazon's successful supply chain operations. After Jeff Bezos announced in December that he had a leadership succession plan for Amazon (but did not reveal what it was), it was widely speculated that Wilke was next in line (although that is not expected to happen any time soon!).
The value of Wilke's presentation was not the principles - they can be found on the company website, and I have listed them below. The real value came with some of the insights he gave behind the principles.
For example, in the discussion of DIVE DEEP, he revealed that they spend the first part of meetings silently reading prepared materials, and over the course of a year end up reading thousands of pages. An interesting fact is that in all those reports the most frequently used word is "will," followed by "customer."
When discussing the CUSTOMER OBSESSION principle, as examples he used initial reports on Amazon Smile and Amazon Student to show how the product had evolved from the initial conception to what Amazon does today. Both were good examples of how customer focus led to a more compelling concept.
In reviewing the INNOVATE AND SIMPLIFY principle, he noted that sometimes that meant being misunderstood, and used a 1999 Barron's Magazine headline to illustrate it - "Amazon.Bomb." With the benefit of hindsight, I am sure Barron's would like to have that one back!
When it comes to BIAS FOR ACTION, Wilke emphasized that speed matter. One should not spend too much time making decisions and must understand that many initiatives are "two way door" decisions. If it does not work, you can walk it back.
Finally, for HAVE BACKBONE: DISAGREE AND COMMIT, he recounted his own early opposition to the Kindle. Of course, he lost that argument, and then needed to commit to the success of the project. Everything he thought would go wrong did, but Amazon was able to overcome that and create a successful product.
In the Q&A afterwards, he was asked about the concern of some that Amazon was displacing workers by using lots of automation. His response was that the company created thousands of jobs last year despite adding in 15,000 new robots.
When asked about women in leadership positions at Amazon, he said they need to do a better job there. He said they do well in category leader programs, but in software and operations positions (such as running plants) they find it very difficult, in part because the availability of women for these positions is a challenge.
A question was raised about whether the Amazon culture can be appealing to the millennial generation. He felt they were doing well with that segment of the workforce. If one wants to be successful, it takes hard work over a long period of time. He thinks millennials are willing to work hard but want more flexibility in doing that, and he thinks that can be worked out.
When asked what plans Amazon has for mobile and international markets, he said mobile is baked into everything they do - they are hitting all channels. Regarding plans for international markets, Amazon thinks that is where many potential customers will be, so look for them to be going after them.
Finally, when asked about the disappearance of the middle class, he said the answer is education. We have to be training people to be ready for the jobs that will be available. We are not doing that now, as thousands of software jobs go unfilled in our region. We'll need to do better in the future.
It was a great opportunity for our students to hear from one of Amazon's top leaders and a great way to end the 2014-15 edition of the Speaker Series! See you in 2015-16!
Amazon's Peculiar Fourteen Leadership Principles:
Leaders start with the customer and work backwards. They work vigorously to earn and keep customer trust. Although 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."
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.
Are Right, A Lot
Leaders are right a lot. They have strong business judgment and good instincts.
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 leaders and take seriously their role in coaching others.
Insist on the Highest Standards
Leaders have relentlessly high standards - 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.
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.
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.
Earn Trust of Others
Leaders are sincerely open-minded, genuinely listen, and are willing to examine their strongest convictions with humility.
Leaders operate at all levels, stay connected to the details, and audit frequently. No task is beneath them.
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.
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.