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“If you can get people aligned to priorities — how we make decisions, how we work together, how we hold each other accountable, what our mission is — you can get a lot more done a lot faster … And that's what a good set of leadership principles does for an organization.”
— John Rossman, Author of "The Amazon Way"
Amazon is constantly changing, innovating, and evolving. It’s also continuously growing — and doing so faster than most organizations in the history of commerce.
Yet, despite that rapid growth, the retail beast has retained its corporate culture and dedication to the customer experience for more than 25 years.
Today, the company averages 18.5 orders per second, according to recent data, and ships an estimated 1.6 million packages every day.
But how exactly can such a massive organization accomplish this feat without losing the magic that ignited its growth in the first place?
According to business advisor and former director of enterprise services for Amazon Services, John Rossman, it’s primarily due to the company’s leadership principles — which have remained the same since the beginning.
In the newest edition of Rossman’s book, “The Amazon Way,” he delves into the 14 leadership principles that have helped cultivate Amazon’s success, and what aspiring entrepreneurs and current leaders can learn from them.
“That's really the underlying amazing story — how consistent these principles are, the mechanisms, and how they use them,” he says.
Rossman appeared on a recent episode of Unpacking the Digital Shelf podcast, “Amazon’s Leadership Principles, Refreshed,” to discuss a few of the most powerful leadership principles, plus his suggestion for a new, 15th principle. Here are a few of the highlights.
From business school courses to leadership seminars, Amazon is one of the most often-cited examples of a wildly successful company. Over the past two and a half decades, it’s become a market leader, turned entire industries upside down, dramatically reshaped consumer expectations, and forced more than a few competitors out of business. And none of this is by chance.
Early on as a fledgling startup, Amazon codified 14 leadership principles that still guide more than 1.3 million employees — and the decisions they make — every day.
"I won't say it’s wholly responsible, but [the set of principles] play a big role in Amazon being its size,” Rossman says. “It still has the attributes of entrepreneurism, ownership, action, and accountability across the organization. And, and it’s helped them from becoming as much of a bureaucracy as most companies would have become."
1. Customer obsession
2. Ownership
3. Invent and simplify
4. Leaders are right, a lot
5. Learn and be curious
6. Hire and develop the best talent
7. Insist on the highest standards
8. Think big
9. Bias for action
10. Frugality
11. Earn trust
12. Dive deep
13. Have backbone; disagree and commit
14. Deliver results
Rossman shares something Amazon adopted nearly a decade ago — both in his book and during his podcast episode — called Andon Cord.
This Japanese, just-in-time manufacturing technique is based on the philosophy that anyone in the production line can and should stop production if they notice a problem.
This way, teams avoid passing problems down the line. It also enables everyone to focus on fixing that problem. (And, as any business leader knows, the more brains you have solving a problem, the better and faster you’ll reach a solution.)
Amazon designed tools, capabilities, and even specific roles rooted in the Andon Cord philosophy. For example, this means a customer service rep can pull an item off the website and make it unavailable if they believe it’s causing an issue (typically due to customer feedback).
“People are empowered. They have the tools to do it, and they're rewarded for it. And then others gather around to fix it and get to the root cause,” Rossman says.
Not only does this technique speak to Amazon’s commitment to the customer experience, but it’s also an example of how Amazon speeds up its fixes. Because, whenever you stop production (literally or figuratively), the primary goal becomes doing whatever possible to resume production.
Principle number four states, “leaders are right, a lot.” And despite the confusing grammar, it’s an excellent nugget of wisdom for anyone new to a leadership position or leaders struggling with indecision.
“Good leaders make good decisions more often than not,” Rossman says. “Good leaders pay more attention to things that feed into helping them make good decisions. And the idea is, don't crowdsource your decision-making when you run a business.”
Rossman explains that good leaders are also empowered to make decisions and assume responsibility for their outcomes. They don’t point fingers and blame others.
In many cases, these leadership decisions are guided by another key principle: frugality. In the early days of Amazon (as with any startup), frugality meant fighting for every penny and keeping expenses low.
Today, frugality at Amazon means doing more with less. Or, as Rossman says, “Frugality is a constraint to help force innovation and help keep an eye on scale.”
Even with billions in annual revenue, according to Statista, Amazon leaders still strive to ensure they’re efficient with their resources and not throwing more budget or labor at a problem than necessary.
Of course, what creates the snowball of success for a company’s first couple of decades isn’t always sustainable for its future — especially when that company reaches a critical inflection point.
Earlier this year, Jeff Bezos stepped down as CEO and turned the wheel over to cloud executive Andy Jassy. Since the change in leadership, many have wondered how Amazon will handle new challenges and whether it would address concerns about how it’s showing up for its shareholders and employees.
Rossman has a few ideas, which led to his suggested 15th leadership principle — introduced in “The Amazon Way.”
“Amazon comes from this entrepreneurial, frugal, scrappy, doubted underdog fighter mentality. And that's been great for the past 25 years,” Rossman says. “If we're going to have real change happened here, it has to start with thinking about the role that the leadership principles play. And so I donate a candidate leadership principle that I think would help them both internally, as well as with the external narrative: reset the stage.”
Regardless of where Amazon heads in its next chapter, there’s still plenty organizations can learn about the retail titan’s rise to power — and the guiding principles that lit the way.
Listen to the full podcast episode to hear additional insights from John Rossman about what it takes to become an unstoppable force in the retail world like Amazon.
