Framework 84 Amazon's Leadership Principles

Amazon was launched in 1994 by Jeff Bezos and a few others. It did not make a profit until 2009. It is grew and grew, and is now one of the most valuable companies in the world.

It started by digitising the retail book industry on-line and has branched out into many other industries, like web services provider (like cloud computing, etc), personal assistants, media (print, movies, etc), artificial intelligence developer, manufacturer, etc

However, Amazon's whole history has been about 2 things:

- customer focus

- data collection

Data collection is used as a basis for understanding customer behaviour so that it can develop profiles about customers' preferences by what they click on and don't click on. An example is one customer who made 100 purchases on Amazon generated 15,000 bits of data (ABC 2020). To collect more data on customers, it allowed third-party sellers to use the Amazon platform to sell their products. Amazon's products are all about data collection; some recent examples include Alexa (personal home assistant) and Amazon Ring (surveillance system). The data collection can be used to influence customer behaviour.

Amazon's success is based upon 14 leadership principles.

"...a set of principles referred to during company decision-making, problem-solving, simple brainstorming, and even hiring..."

Peter Economy 2020

a adherence to these leadership principles

"...means that the company's expansion has no natural boundaries; no sector of the economy inherently lies beyond its core competencies..."

Franklin Foer 2019

Leadership Principles (14)

1. Customer Obsession (understanding customers, keeping their trust, etc; customer convenience is pivotal)

2. Ownership (staff have attitudes, habits, etc like owners; think long-term, ie don't sacrifice long-term value for short-term gains; have a holistic approach, ie act on benefits for the whole organisation and not just yourselves; never say "that's not my job")

3. Invent and Simplify (innovating and simplifying are pivotal; look for new ideas from anywhere)

4. Are Right, a Lot (use judgements and instincts; seek diverse perspectives)

5. Learn and be Curious (never stop learning and improving yourself, ie life-long learning; curious about new possibilities and potentials; willing to explore; do things differently)

6. Hire and Develop the Best (hire and promote the best; encourage their development by coaching, training, experience, etc)

7. Insist on the Highest Standards (set relentlessly high standards; aim to continually deliver higher quality products, services and processes; minimise defects, wastage, etc)

8. Think Big (thinking small is a self-fulfilling prophecy; create and communicate boldly as it is this that inspires results; think differently and find different ways to serve the customer better)

9. Bias for Action (speed is important; encourage calculated risk-taking as many decisions and actions are reversible and do not need extensive study, ie try doing things differently and learn from the experience)

10. Frugality (be efficient and effective; accomplish more with less;

"...constraints breed resourcefulness, self-sufficiency and invention..."

Peter Economy 2020

11. Earn Trust (listen attentively, speak candidly and treat others respectfully; be self-critical; benchmark yourselves against the best)

12. Dive Deep (operate at all levels of the organisation; stay connected to the details, ie collect as much data as possible for analysis, reviewing, etc; monitor and evaluate frequently; no task is beneath you)

13. Have a Backbone - Disagree and Commit (respectfully challenge decisions which you disagree with; leaders have conviction and are tenacious; do not compromise for the sake of social cohesion; once a decision is made, fully commit to it)

14. Deliver Results (focus on key inputs of the business and deliver them with the right quality in a timely fashion)

NB Customer obsession is the dominant principle

(source: Peter Economy 2020)


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