Ownership

One of the things that define how Amazon runs its business is what they call the Leadership principles. These principles are treated like religion. They define daily business processes, project priorties, how decisions are made, and apparently, they work really well for the company’s success. Those leadership principles are also widely regarded as operational blueprints for many startups. Over my time with Amazon, I learned to love some of them, see the value in others, and realize that a critical one was missing (I’ll tell you that secret over a beer if you’re interested).

Since those Leadership principles are universally applicable and useful, I will pick a specific one every now and then and share its official description as well as my personal take and experience. As always, I would love your thoughts, feedback, and differing point of view.

Ownership

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.”

To me, ownership is probably the most important one of the leadership principles. It is so important because it defines how we approach our jobs. Are we just in to tick off hours and collect a paycheck, or do we deeply care about what we’re doing and want to positively impact our field, our customers, and our co-workers?

For that reason, in my mind, ownership is also closely linked to the three pillars that drive job satisfaction (purpose, autonomy, and mastery). If we don’t step up and take personal ownership, we will not feel any control over these three pillars either.

Ownership means caring about what we do. Ownership means not waiting to be told what we should focus on but proactively assessing our space all the time and moving forward with the things that matter most. Ownership is the difference between looking at the clock ticking away versus looking at your customers and thinking through how you can improve their lives.

Ownership is also about being in control, which again, is one of the key drivers for job satisfaction as well as one of the key things that cause burnout if it’s lacking. If you don’t show ownership and take control, someone else will fill the void for you and tell you what to do.

Always remember:

Ownership is taken, not granted!


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Check out our book for more thoughts and a week-by-week guide to make strategic changes to improve your health, career, and life purpose:

Put on your oxygen mask first - book cover

Put On Your Own Oxygen Mask First
A practical guide to living healthier, happier and more successful in 52 weekly steps
By Alfons and Ulrike Staerk
ISBN 9781077278929

Find it on Amazon: PaperbackKindle

If you like what you’re reading, please consider leaving a review on Amazon. If you don’t like it, please tell us what we can do better the next time. As self-published authors we don’t have the marketing power of big publishing houses. We rely on word of mouth endorsements through reader reviews.

Think like Amazon

A while ago I was asked “how Amazon thinks and is different”. There are many books written on this topic, but if you want the Cliff notes, here’s my take:

How Amazon ticks (at least a small set of those principles)

A lot of the operating principles for Amazon are coded in the leadership principles, which everyone lives by on a daily basis. You will notice that there is often a tension between two leadership principles, which is intentional, as it forces everyone to consistently make conscious trade-off decisions.

Aligned goals while preserving autonomy

Hierarchy of goals – Amazon follows and tracks a hierarchy of goals. Some of those goals are set top-down, but the majority are aggregated bottoms-up. All goals are focused on the outcome, not the method, allowing for ample degrees of freedom to adjust process and solutions, as the team learns more about what works and what doesn’t. Aligning those goals up the chain ensures that everyone agrees on the priorities, and teams are given a framework to make an autonomous decision. There are several categories of importance for goals (company, department, team) to empower teams to make local decisions if some of those goals start to conflict with each other (e.g. one goal needs additional funding at the expense of another one).

Local autonomy – With a clear decision and priority framework through agreed-upon goals, teams are granted high local decision authority. That authority typically lies at the scope of two-pizza-teams, meaning teams that are small enough so that they can be fed with two pizzas in a meeting (i.e. no more than 10-12 people). Those units design their programs such that they can exist with minimal dependencies on other teams. Authority for most decisions lies with the leader of that team (typically a Manager or Senior Manager).

With that, Amazon, in many ways, functions like a group of many independent startups that work towards common goals with high independence and are well funded.

Starting small and embracing failure

Embracing experimentation and failure – Experimentation and failure is highly encouraged. There is a lot of deep thinking done in advance, and decisions are made based on extensive data analysis. However, there is also an understanding that all data is incomplete, and analysis-paralysis needs to be avoided. One-way versus two-way doors is a mental framework that helps navigate through that ambiguity. There is a high willingness in management to write off failures if the initial thinking was valid and data-driven. Experimentation in small pilots is the standard procedure to avoid costly mistakes at large scale. Teams meet on a weekly basis for project reviews where they look at all operational data to make quick course corrections if needed.

Start frugal, start scrappy – Contrary to public perception, every idea and implementation begins in a very scrappy and frugal way. That minimizes losses for ideas that don’t work. Once an idea is successful and gains traction, systems often have to be completely re-written in order to become more scalable and manageable and meet the larger scale and operational demand. This approach ensures extremely high agility and velocity at a very low initial cost (two pizza teams). Substantial investments are only made once an idea has proven to be successful. The extra cost of re-engineering a system is a conscious trade-off that is being made to allow quick and cost-effective initial development.

It’s all about the customer experience!

Customer focus – The customer and value for the customer are truly always put first. That is not so much for altruistic reasons, but because Amazon focuses on the lifetime value of a customer. Short-term losses are acceptable if they lead to a stronger engagement with the customer, thus ensuring a higher lifetime value. Customers are an investment for the long run, and short-term losses are acceptable toward that goal.

Of course, there is way more to what makes Amazon tick, but the above – together with the leadership principles – are some of the principles that, in my mind, make the most difference.


Did you like this post? Want to read more?

Check out our book for more thoughts and a week-by-week guide to make strategic changes to improve your health, career, and life purpose:

Put on your oxygen mask first - book cover

Put On Your Own Oxygen Mask First
A practical guide to living healthier, happier and more successful in 52 weekly steps
By Alfons and Ulrike Staerk
ISBN 9781077278929

Find it on Amazon: PaperbackKindle

If you like what you’re reading, please consider leaving a review on Amazon. If you don’t like it, please tell us what we can do better the next time. As self-published authors we don’t have the marketing power of big publishing houses. We rely on word of mouth endorsements through reader reviews.

Making decisions – One-way and two-way doors

This week I wanted to share a thought on decision making. We face many decisions in these ultra-dynamic times. Many of them might seem “above our pay grade,” or we might be hesitant because we don’t have all the data we would love to have in an ideal world, or we are worried because we cannot find the time to dot every ‘i’ and cross every ‘t.’

While we don’t want to make random decisions, shooting from the hip, these times require swift decisions and actions. We need to avoid becoming a ‘deer in the headlights,’ freezing because we are overwhelmed by the decisions we are confronted with.

A way to reduce our angst of fast-paced high-judgment decisions is to apply the concept of one-way versus two-way doors. This framework is a key (and well-published) principle that Amazon Executives and employees apply when confronted with high-impact decisions in environments of incomplete data (i.e. every day). The idea is to analyze every decision as to whether it is a one-way or a two-way door.

One-way doors – These decisions and their impacts are irreversible. Once you made the decision, you cannot easily go back, and major harm will be done if you have to. On those decisions, you want to do as much investigation and scenario planning as you can possibly afford. A big system upgrade or platform switch might be one example of such decisions. Once switched, it will be costly to go back, and hence we need to ensure thorough testing.

Two-way doors – The majority of decisions are actually two-way doors. If you make a mistake, you can go back without major damage, or you simply tweak what you do to account for the miss. For a two-way door decision, you want to avoid getting into analysis-paralysis. Once you have a pretty good understanding, you need to stop ruminating and start trying. Risk can be limited through smaller pilots and simple tests, but you want to rather get real-world data than spend too much time in theoretical analysis. If things turn out differently than expected, you adjust your plan and try again. Experimentation, short learning cycles, and agile adjustments are the name of the game. Making process changes or trying out new features are perfect examples for two-way doors. If you learn that something doesn’t work, you can revert back or keep iterating until you achieve the desired outcome.

In almost all cases, it’s better to try and learn than to do nothing. Some decisions are one-way doors, but by far not all – understand which one is which.


Did you like this post? Want to read more?

Check out our book for more thoughts and a week-by-week guide to make strategic changes to improve your health, career, and life purpose:

Put on your oxygen mask first - book cover

Put On Your Own Oxygen Mask First
A practical guide to living healthier, happier and more successful in 52 weekly steps
By Alfons and Ulrike Staerk
ISBN 9781077278929

Find it on Amazon: PaperbackKindle

If you like what you’re reading, please consider leaving a review on Amazon. If you don’t like it, please tell us what we can do better the next time. As self-published authors we don’t have the marketing power of big publishing houses. We rely on word of mouth endorsements through reader reviews.