The Culture of Innovation at Amazon: Driving Customer Success

© 2019, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Amazon Confidential and Trademark
Felipe Millon, AWS Senior Manager for Government Financial Services
SIBOS 2019
Amazon’s Culture of Innovation
Enabling Everyone to Innovate

Our mission
to be Earth’s most
customer-centric company

Where innovation begins
start with the customer
and work backwards

“There are many advantages to a customer-centric
approach, but here’s the big one: Customers
are always beautifully, wonderfully dissatisfied, even
when they report being happy and business is great.
Even when they don’t yet know it, customers want
something better, and your desire to delight customers
will drive you to invent on their behalf.”
- Jeff Bezos, 2016 letter to shareholders

1994 m Founded
1995 m Amazon.com
1998 m CDs & DVDs
2006 m AWS
2007 m Kindle
2011 m Video
2012 m Groceries
2014 m Alexa/Echo
2015 m Bookstores
2017 m Go

How do we organize for innovation?
Culture
Customer obsession, hire builders, let them build, support them with a belief system
Mechanisms
Encoded behaviors that facilitate innovative thinking
Architecture
Structure that supports rapid growth and change
Organization
Small, empowered teams that own what they create

Invent and
Simplify
Hire and Develop
the Best
Frugality
Deliver Results
Are Right, A
Lot
Dive Deep
Bias for
Action
Insist on the
Highest Standards
Earn Trust
Ownership
Think Big
Customer
Obsession
Have Backbone,
Disagree & Commit
Learn and Be
Curious
Every one of us
is a leader on
our mission

Our Leadership Principles
Customer Obsession
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.
Ownership
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 judgment and
good instincts. They seek diverse perspectives and work
to disconfirm their beliefs.
Learn and Be Curious
Leaders are never done learning and always seek to
improve themselves. They are curious about new
possibilities and act to explore them.
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. We work on behalf of our people to
invent mechanisms for development like Career Choice.
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.
Think Big
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.
Frugality
Accomplish more with less. Constraints breed
resourcefulness, self-sufficiency and invention. There are
no extra points for growing headcount, budget size or
fixed expense.
Earn Trust
Leaders listen attentively, speak candidly, and treat
others respectfully. They are vocally self-critical, even
when doing so is awkward or embarrassing. Leaders do
not believe their or their team’s body odor smells of
perfume. They benchmark themselves and their teams
against the best.
Dive Deep
Leaders operate at all levels, stay connected to the
details, audit frequently, and are skeptical when metrics
and anecdote differ. 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.
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.
Whether you are an individual contributor or a manager of a large team, you are an Amazon leader.
These are our leadership principles, unless you know better ones. Please be a leader.

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.

Willingness to be misunderstood for a long time…

71
Price Reductions (since
2016)
1957
New Services and
Features introduced in
2018
Millions of
Monthly Active 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.

Is it a one-way or
a two-way door?

Inputs
Iteration
Tool
Adoption
Inspection
Outputs
A mechanism is a complete process

Customer
Press
Release
FAQ
Visuals
Working Backwards Is a
Process
Use it to get clarity, not to document
what you’ve already decided to do

Who is the customer?
Be specific about their context and
needs

Artifacts from Working Backwards
Press Release
FAQs
Visuals

We will optimize the
customer experience to
enable enhanced accuracy
in Buy-Box pricing to
facilitate increased
rapidity and elevated
confidence in purchase
decisioning by cross-
border
retail customers.
SAY IT SIMPLY
Amazon makes it easier
for international shoppers
to decide what to
purchase by showing
them the
total landed cost of an
item. Total landed cost
includes all taxes, duties,
and shipping costs.

FAQs
Sample Customer FAQs:
1. How is this different from what Amazon offers me today?
2. Can I get a refund if I’m dissatisfied?
3. Are there things I need to manage or keep track of?
4. How much does this cost?
Sample Internal FAQs:
1. What decisions and guidance do we need today?
2. What customer feedback have we collected so far?
3. What will customers be most disappointed in?
4. What other options did we consider and reject?
5. What are our MLP features?
6. What are our hotly debated topics?
7. Are we stepping through any “one way doors”?
8. Who is the single threaded leader?
• Include both customer
FAQs and internal FAQs
• Include the hard
questions
• Share your Press Release
early to gather questions

Visuals
• Show the customer
experience
• Rough idea – rough
drawing
• Match fidelity to maturity
of your idea
• Don’t be afraid to be
provocative

”Most companies write the software, they get it all
working, and then they throw it over the wall to
the marketing department, saying ‘here is what we
built, go write the press release.’
That process is the one that’s actually backwards.”
- Jeff Bezos, Founder and Chief Executive Officer,
Amazon.com, Inc.

A shift to microservices
• Single-purpose
• Connect only through hardened APIs
• Largely “black boxes” to each other
• Business logic and data only
accessible through APIs

Self–service platforms
without gatekeepers
Creating powerful self-service platforms
that enable builders to use the right
tool for the right job

The broadest and deepest platform for
today’s builders

Amazon hires builders
and lets them build

Two-Pizza teams are
fast and agile,
fostering ownership
and autonomy
Small,
decentralized
teams are
nimble
Own and
run what
you build

Experiment early and
frequently

© 2019, Amazon Web Services, Inc. or its Affiliates. All rights reserved.
To our shareowners (2015)
This year, Amazon became the fastest company ever to reach $100 billion annual sales. Also
this year, Amazon Web Services is reaching $10 billion in annual sales.One area where I think we are especially distinctive is failure. I believe we are the best place in
the world to fail (we have plenty of practice!), and failure and invention are inseparable twins.
To invent you have to experiment, and if you know in advance that it’s going to work, it’s not
an experiment. Most large organizations embrace the idea of invention, but are not willing to
suffer the string of failed experiments necessary to get there. Outsized returns often come from
betting against conventional wisdom, and conventional wisdom is usually right. Given a ten
percent chance of a 100 times payoff, you should take that bet every time. But you’re still
going to be wrong nine times out of ten. We all know that if you swing for the fences, you’re
going to strike out a lot, but you’re also going to hit some home runs. The difference between
baseball and business, however, is that baseball has a truncated outcome distribution. When you
swing, no matter how well you connect with the ball, the most runs you can get is four. In
business, every once in a while, when you step up to the plate, you can score 1,000 runs. This
long-tailed distribution of returns is why it’s important to be bold. Big winners pay for so many
experiments.

Learn from failures…
Auctions, zShops, Marketplace fire Phone

”Invention comes in many forms and at many
scales. The most radical and transformative of
inventions are often those that empower others to
unleash their creativity – to pursue their dreams.”
- Jeff Bezos, Founder and Chief Executive Officer,
Amazon.com, Inc.

The Culture of Innovation at Amazon: Driving Customer Success

The Culture of Innovation at Amazon: Driving Customer Success

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