A Cultura de Inovação na Amazon: Impulsionando o Sucesso com os Clientes
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O documento descreve a cultura de inovação da Amazon, que enfatiza a obsessão pelo consumidor, pensamento de longo prazo, falha como parte do processo de inovação, e consciência de que as ideias inovadoras podem não ser compreendidas inicialmente. A Amazon organiza-se para inovação através de mecanismos como trabalhar de trás para frente, comunicados de imprensa e FAQs, arquitetura de microsserviços e plataformas auto-gerenciadas, cultura de contratação de construtores e empreendedores, e
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A Cultura de Inovação na Amazon: Impulsionando o Sucesso com os Clientes
- 1. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved. A Cultura de Inovação na Amazon: Impulsionando o Sucesso com os Clientes
- 2. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved. Cultura de Inovação Possibilitando Inovação para todos
- 3. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved. Jeff Bezos CEO, Amazon.com “Invenção surge de diversas formas, em diferente escalas. As mais radicais e transformadoras são aquelas que empoderam os outros à liberarem sua criatividade para perseguirem seus sonhos”
- 4. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved. Amazon começou com Livros…
- 5. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved. A inovação se manifestou em diversos domínios… Desenvolvimento de Drones Compras Automatizadas Kindle Entretenimento Entrega de Mercadorias Streaming de Vídeos Automação da Casa Computação em Nuvem
- 6. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved. Nossa Missão Queremos ser a empresa mais focada no consumidor do mundo
- 7. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved. Nosso Comprometimento Nós fazemos a vida de nossos clientes mais fácil
- 8. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved. Onde Começa a Inovação Partimos do consumidor e, então, trabalhamos de trás pra frente
- 9. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.
- 10. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.
- 11. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.
- 12. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.
- 13. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved. Nossas crenças para construirmos uma cultura inovadora »Obsessão pelo Consumidor “Comece tudo sempre pelo o consumidor e trabalhe de trás pra frente” »Pensamento a longo prazo “Seja teimoso na visão, mas flexível com os detalhes” »Se quer ser inventivo, esteja disposto à falhar “Estamos dispostos a entrar em becos escuros e, ocasionalmente, acharmos algo que realmente funcione” »Esteja ciente de que, por bastante tempo, muitos não o compreenderão “Não nos importamos em sermos incompreendidos”
- 14. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved. Diagrama de Crescimento da Amazon Valor Seleção Conveniência
- 15. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.
- 16. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved. Resistente quanto à missão Mas flexível nos detalhes
- 17. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.
- 18. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved. Cientes de que seremos incompreendidos Por um bom tempo…
- 19. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved. “Amazon continua a impressionar Wall Street, graças à Cloud e Prime” “O negócio que mais cresce rapidamente da Amazon não tem nada a ver com Prime Day”
- 20. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved. » Mecanismos Trabalhar de trás pra frente Comunicado de imprensa FAQ & Visualizações » Arquitetura Arquitetura de micro serviços Aplicações “soltas” Plataformas self-service » Cultura Nossos membros: contratamos construtores, inovadores e empreendedores Nossas crenças: Princípios de Liderança da Amazon » Organização Experimentação “2 Pizzas” por equipe Como nos organizamos para a Inovação?
- 21. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved. Sempre trabalhe de trás para frente, a partir do consumidor OBSESSÃO PELO CONSUMIDOR © 2018, Amazon Web Services, Inc. or its affiliates. All rights reserved.
- 22. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved. Escreva o comunicado de imprensa Amazon anunicia dispositivo revolucionário: o Amazon Kindle Equipamento de leitura portátil revolucionário permite aos usuários baixar livros em minutos, além de receber newspapers, visitar blog e ler revistas automaticamente, sem necessidade de um PC ou Wi-fi. Hoje, a Amazon anunciou seu mais novo produto: o Amazon Kindle, dispositvo revolucionário para leitura portátil, que faz download de livros, blogs, revistas e jornais em alta resolução, extremamente similar ao papel original, luminosidade ajustável e etc. Mais de 9,000 livros já estão disponíveis na Kindle Store, incluindo clássicos da literatura e os best sellers atuais, pelo valor de R$9,99.
- 23. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.
- 24. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved. Inclua tanto FAQs para consumidor, quanto para outros stakeholders Inclua as perguntas difíceis Compartilhe o comunicado de imprensa com antecedência, assim você coleta mais perguntas FAQs de Consumidores – Consumidores fazem as melhores perguntas porque são fundamentais para a experiência: Quanto custa? Que suporte recebo? Onde encontro? Como cancelo? FAQs de Stakeholders – O que seu VP, equipe de parceiros e funcionários perguntam sobre suas ideia? Qual a tecnologia por trás? O que pode decepcionar os consumidores no primeiro lançamento? Como isso impacta os sistemas atuais? Qual o impacto para o negócio? Como identificamos as necessidades dos clientes? Como lançamos de forma mais ágil? O que mais provoca debates internos? escreva as FAQs
- 25. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved. Trabalhar de trás para frente é opcional?
- 26. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved. » Mecanismos Trabalhar de trás pra frente Comunicado de imprensa FAQ & Visualizações » Arquitetura Arquitetura de micro serviços Aplicações “soltas” Plataformas self-service » Cultura Nossos membros: contratamos construtores, inovadores e empreendedores Nossas crenças: Princípios de Liderança da Amazon » Organização Experimentação “2 Pizzas” por equipe Como nos organizamos para a Inovação?
- 27. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved. Plaformas self service para todos “Estamos criando poderosas plataformas self service que permitem a milhares de pessoas, realizarem experimentos ousados, alncançando coisas que, até pouco tempo atrás, não seriam possíveis”
- 28. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved. HYBRID ARCHITECTURE Data Backups Integrated App Deployments Direct Connect Identity Federation Integrated Resource Management Integrated Networking MARKETPLACE Business Apps DatabasesDevOps Tools NetworkingSecurity Storage Business Intelligence ENTERPRISE APPS Virtual Desktops Sharing & Collaboration Corporate Email Backup IoT Rules Engine Device Shadows Device SDKs Registry Device Gateway DEVELOPMENT & OPERATIONSMOBILE SERVICESAPP SERVICESANALYTICS Data Warehousing Hadoop/ Spark Streaming Data Collection Machine Learning Elastic Search Queuing & Notifications Workflow Search Email Transcoding One-click App Deployment Identity Sync Mobile App Testing Push Notifications DevOps Resource Management Application Lifecycle Management Containers Triggers Resource Templates API Gateway Streaming Data Analysis Business Intelligence Mobile Analytics Single Integrated Console TECHNICAL & BUSINESS SUPPORT Support Professional Services Account Management Partner Ecosystem Solutions Architects Training & Certification Security & Billing Reports GAMING 3D Game Engine Character Designer Multiplayer Service Twitch Integration Cloud Integration Regions Availability Zones Points of Presence INFRASTRUCTURE CORE SERVICES Compute VMs, Auto-scaling, Load Balancing, Containers, Cloud functions Storage Object, Blocks, File, Archivals, Import/Export Databases Relational, NoSQL, Caching, Migration CDN Networking VPC, DX, DNS Access Control Identity Management Key Management & Storage Monitoring & Logs SECURITY & COMPLIANCE Resource & Usage Auditing Configuration Compliance Web application firewall Assessment and reporting AWS: Most Robust, Fully-Featured Technology Infrastructure Platform
- 29. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved. Inovações no Setor Público realizadas com AWS 70PB de dados da Terra Analisa 75TB de dados financeiros diariamente Capacita milhares de negócios digitais na Ásia Unindo uma comunidade Global de pesquisa Serviços constituintes digitiais Luta contra o tráfico infantil
- 30. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved. » Mecanismos Trabalhar de trás pra frente Comunicado de imprensa FAQ & Visualizações » Arquitetura Arquitetura de micro serviços Aplicações “soltas” Plataformas self-service » Cultura Nossos membros: contratamos construtores, inovadores e empreendedores Nossas crenças: Princípios de Liderança da Amazon » Organização Experimentação “2 Pizzas” por equipe Como nos organizamos para a Inovação?
- 31. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved. Cada um de nós somos grandes líderes de nossa missão!
- 32. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved. » Mecanismos Trabalhar de trás pra frente Comunicado de imprensa FAQ & Visualizações » Arquitetura Arquitetura de micro serviços Aplicações “soltas” Plataformas self-service » Cultura Nossos membros: contratamos construtores, inovadores e empreendedores Nossas crenças: Princípios de Liderança da Amazon » Organização Experimentação “2 Pizzas” por equipe Como nos organizamos para a Inovação?
- 33. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved. The Institutional YES!
- 34. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved. Aprenda com o Fracasso… Amazon.com criou um site para leilões para competir com a Ebay. Em pouco tempo, o site saiu do ar, mas deu toda base para criação do Amazon Marketplace O Fire Phone, smarthphone da Amazon, não fez nenhum sucesso. São mais de 170 Milhões de prejuízo...
- 35. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved. Decomponha problemas primitivos Foco e direcionamento Permite times que se auto direcionam Fomenta a autonomia
- 36. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved. » Mecanismos Trabalhar de trás pra frente Comunicado de imprensa FAQ & Visualizações » Arquitetura Arquitetura de micro serviços Aplicações “soltas” Plataformas self-service » Cultura Nossos membros: contratamos construtores, inovadores e empreendedores Nossas crenças: Princípios de Liderança da Amazon » Organização Experimentação “2 Pizzas” por equipe Como nos organizamos para a Inovação?
- 37. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved. EQUAÇÃO DE INOVAÇÃO DA AMAZON f(inovação) = (org * arq) (mecanismos * cultura)
- 38. Nos tivemos 3 grandes ideias na Amazon que mantivemos por mais de 20 anos, e são a principal razão de nosso sucesso: colocar o consumidor em primeiro lugar, invente e seja paciente. Jeffrey P. Bezos Founder and Chief Executive Officer Amazon.com, Inc.
- 39. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved. look like?E como parcer ser o dia 2?
- 40. © 2019, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Obrigado!
Hinweis der Redaktion
- Customers often ask me how can their companies innovate like Amazon. From its humble beginnings as the "World's Largest Bookstore," Amazon has not only innovated across e-commerce and adjacent segments within e-commerce, but also introduced new businesses that seem (and sometimes are) unrelated to e-commerce. Over the years Amazon has gotten very good at taking hard problems (often times esoteric), and made them easier for the masses to use. AWS is a great example of that. We have taken something so central and specialized as operating and managing technology data center, and pushed to the edges in form of a utility. When technology becomes a utility, it becomes ubiquitous, and therefore, more people can participate in the innovation.
- Let me begin with a quote by Jeff Bezos, which demonstrates how AWS thinks about fostering innovation for others. This can be teams within Amazon but then more importantly, developers, businesses, and enterprises outside of Amazon.
- When it comes to personalization, Amazon has been one of the pioneers in mining and using data to create a more curated e-commerce experience for consumers. Let me talk about Amazon’s mission, commitment, and innovation approach.
- It’s important to understand our Innovative Culture and our Approach
- Our mission is broad, which leaves the kinds of opportunities we can get into broad. We want to be a customer centric company, and that can take many shapes, forms, and sizes.
- But our mission is rooted in our commitment, which is manifested by focusing on bringing ease to customers. Making their lives easier.
- And how do we do this ? We start with the customer and work backwards. That is where innovation comes from. It’s not only about being close to customers and talking about what they like and need, but it’s also about inventing on their behalf. 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. No customer ever asked Amazon to create the Prime membership program, but it sure turns out they wanted it
- What does Amazon know about Innovation?; - Not a Young Company. Founded in 1994, 24 years old - Not a Small Company. More than 220k employees - Not a Startup~$177B (2017) in revenue across 190 countries - Many dimensions – retail, AWS, Audible, IMDB, Alexa, Fire TV Picture of original fulfillment center where “pickers” walked along aisles selecting products for order. Largest internet retailer Books Kindle Prime May Day Video, Golden Globes best comedy for Transparent Fulfillment centers (8th generation) Prime Air
- Supply Chain Innovation 8th generation fulfillment center 30,000 kiva robots deployed globally, from small units (picture) that can lift 450kg to larger units that can lift pallets of 1350kg No more walking – 53% improvement in utilization of floor space in fulfillment center http://www.businesswire.com/news/home/20141130005031/en/Amazon-Unveils-Eighth-Generation-Fulfillment-Center
- Since we introduced Kiva robots, we have hired 300,000 people with 100,000 robots
- Amazon Go
- And this approach of starting with the customer to enable innovation is rooted in a culture within our company which is about four concepts: Customer Obsession Long Term Thinking Inventive mind set that is okay with failure And willingness to try new things, and therefore be misunderstood
- Critical to our culture is our belief in focusing on the things that matter most to customers. Independent of the industry, customer segment, or business, consumers, developers, businesses, and large enterprises want Value Selection Convenience And these are requirements that don’t change. In fact, if one focuses on ensuring innovation is being exercised in each of these areas, one creates a virtuous, closed loop flywheel, and most, if not all of Amazon’s businesses are rooted in this growth flywheel. Value is delivered with more selection, and selection improves experience drives more traffic. More traffic attracts more partners that want to participate in the ecosystem, and therefore they add even more selection. That creates growth. And growth helps drive usage which enables one to drive lower cost structures with scale. That gives our businesses structural advantages, which then enable use to take actions like dropping prices periodically, and customers love it when we make products and services more cost-effective.
- Prime is a great example of how Amazon continues to innovate on value, selection and convenience. And as we add more either of these dimensions, they create a compounded effect in helping the others. Over the years Prime has not only expanded in the selection of items that fall under this program, but the value it brings to consumers, and more so the convenience of the services. Look at how from 2007 to 2015 our delivery mechanism was (and continues to be) rooted in our supplier network (UPS, FedEx). But solving the problem of last mile delivery so that something like Prime Now (which is to deliver in 2 hours or 1 hour) is not easy to solve with the current supplier approach. So this is where Amazon innovated with a new business model…which I will talk about next.
- But innovation is hard, and therefore one has to be stubborn on vision, while being flexible with details. In other words be firm on the “why,” and allow some level of flexibility with respect to how and what…at least for some period of time, up until the point it makes sense to make certain processes or technology choices more firm. Therefore, some level of consistency and control in the how and what that subscribe to well established principles gets developed over time.
- First example is the Kindle. Many people questioned the first generation of the kindle. And it was quite big and heavier than most books. But we stayed focus on our vision, and over time created a convenient way for people to read more books, and now have the Paperwhite version.
- But if you are going to try new things, you have to be comfortable with being misunderstood.
- Or the other example is AWS. In 2006 we started the business, and Wall Street and others said it was a risky bet. But 10+ years later, it is the business of AWS that Wall Street loves.
- So we have mechanisms, we have the tool set, we have the people that operate innovation. Now we need to ensure they have the right organizational ethos and setup to innovate.
- Purpose: Answering the 5 Questions within your Working Backwards doc Time: 3 MINS This is the Lanyard card that everyone at Amazon gets. the purpose is to give you customer focus. There are 5 questions. Use these 5 questions as you start thinking about an idea before the PR – Can we answer all these questions Once you have solid answers as a team, then start writing. Most important question is the first – who is the customer? If you can’t answer, you shouldn’t move forward. What is the customer problem or opportunity? After you do this a few times, you realize that the third question is the hardest to get right, kind of surprising. Is the most important customer benefit clear? (Value, Selection, Convenience? Trust?) Trust—this is most important: hard to earn, easy to lose This is all about getting FOCUS. How do you know what customers need or want? What data do you have – whether it’s numbers or qualitative What does the customer experience look like? This is where you start to describe your solution
- FAQ - 4 MINS Presenter comments: The ’Frequently Asked Questions’ provide details and data of your idea. Gather questions as you are reviewing your PR with different people and stakeholders. FAQs will be several pages long and can be quite detailed. There are two types of FAQ questions – customer FAQ and Stakeholder FAQ. Customer FAQs - customers ask the best questions because they are fundamental to any experience: How much will this cost? What type of support will I get? Where can I find this? How do I cancel this? Stakeholder FAQs: What will your VP, partner teams, internal Amazon resources ask? Highlight that every time the document is reviewed they will likely get a few more FAQs. Also FAQs can be quite robust depending on the teams effected. What in the underlying technology? What will customers be most disappointed about in your initial release? How does this impact current systems? What is the business impact? How do we know what the customer needs? How can we launch this more quickly? What is provoking the most internal debate? Hard questions: Identify the hard questions early in the process. What are the questions you are hoping won’t be asked? What questions do you not yet know the answer to? How could this fail? Why should we do X and not Y? What are the risks? If a customer were to write to Jeff B about this launch, what will they say? Notes for presenter: • Point to FAQs wiki – many listed there are used by the Steam • Call out the need to list ‘hard questions’ in the FAQ • Your audience will likely include many new Amazonians,
- Switch to Video
- So we have mechanisms, we have the tool set, we have the people that operate innovation. Now we need to ensure they have the right organizational ethos and setup to innovate.
- AWS has 120+ services that offer so many capabilities from compute, storage, to CDN. And then to big data, IoT, messaging, etc. This broad and deep toolset enables our business within Amazon and our ecosystem of partners and customers to innovate faster. The cloud offers a lot of very well known benefits. Many companies are looking at the cloud as a way to double down on investments that support the core mission of the company and differentiate it from competitors. As a result, they are looking at new ways to innovate that allow for more experimentation and more customer engagement. And they are doing it in a way that meaningfully reduces their security and compliance risks.
- Digital Globe: Using AWS Snowmobile, DigitalGlobe is able to deliver petabytes of data in weeks instead of months while saving on costs, allowing the company to deliver data to its customers in the shortest possible amount of time. DigitalGlobe is one of the world’s leading providers of high-resolution Earth imagery, data and analysis. The company uses AWS Snowmobile to move up to 70 petabytes of archive data to the cloud, allowing it to move away from large file transfer protocols and delivery workflows. Singapore Post: The Singapore Post started as a traditional mail carrier service but diversified its business, with its SP eCommerce division helping its customers run their online businesses throughout Asia. It turned to AWS, using a broad range of services that include Amazon EC2, Amazon S3, Amazon Virtual Private Cloud, Amazon Route 53, and Auto Scaling. With AWS it supports more than 1,000 brands while maintaining the availability, reliability, and scalability to support its customers’ retail operations, particularly during periods of intense retail activity such as Christmas, Chinese New Year, and Black Friday. American Heart Association (AHA), The AHA Precision Medicine Platform will include a vast array of curated datasets that are centrally stored, easily searched and accessible, and managed on the AWS Cloud. The platform enables researchers and clinicians to aggregate and analyze a rich breadth and depth of data, including longitudinal cohorts, proteomic, genomic, and gene-expression data using a precision medicine approach. This data and analysis will in turn allow researchers to uncover critical cardiovascular disease insights that translate into medical innovations and positively impact millions of lives. “By using the AWS Cloud, the Platform will harness the power of big data to revolutionize the way cardiovascular research is performed and speed the promise of precision cardiovascular medicine,” said AHA CEO Nancy Brown. “The AHA remains steadfast in its commitment to eliminate the tragic global burden cardiovascular disease places on individuals, families, healthcare systems, and entire nations by mapping scientific discovery to the dramatic advances in biomedical research and technology innovation.” The UK Ministry of Justice Ministry of Justice Case Study (MoJ) uses technology on AWS to enhance the effectiveness and fairness of the services it provides to British citizens. The MoJ is a ministerial department of the UK government. MoJ had its own on-premises data center, but lacked the ability to change and adapt rapidly to needs of the citizens. As more digital services were created, MoJ turned to AWS to automate, consolidate, and deliver constituent services. By using AWS like Amazon EC2, Amazon S3, and Route 53, MoJ has been able to use technology as an enabler for justice to be fair and more effective. FINRA - By migrating to AWS, FINRA—the Financial Industry Regulatory Authority—has created a flexible platform that can adapt to changing market dynamics while providing its analysts with the tools to interactively query multi-petabyte data sets. FINRA, one of the largest independent securities regulators in the United States, was established to monitor and regulate financial trading practices. To respond to rapidly changing market dynamics, FINRA moved about 75 percent of its operations to Amazon Web Services, using AWS to capture, analyze, and store a daily influx of 75 billion records. The company estimates it will save up to $20 million annually by using AWS instead of a physical data center infrastructure. Thorn: Digital Defenders of Children is a nonprofit organization dedicated to driving technology innovation to fight child trafficking. Technological innovation can mean rapid intervention in situations that threaten lives. AWS allows them to experiment and scale to get the tools in the hands of those who can deploy it across the country and internationally to save lives and protect children.
- So we have mechanisms, we have the tool set, we have the people that operate innovation. Now we need to ensure they have the right organizational ethos and setup to innovate.
- This is underpinned on a consistent belief in what are the LPs that make people successful, and that is based on the 14 LPs of amazon.com Leadership Principles are authentic and represent who the company really is. They are not merely aspirational They are a very practical reference to help in most situations where trade-offs, prioritization, strategy development, or key scenarios are being developed. Bottom up – used every day as a shared vocabulary on how to communicate and get stuff done Amazon had what many companies have. We had a mission, vision, and values. And at some point, we did away with that and instead organized around 14 leadership principles. But what is really amazing is that I’ve never worked at a company where every employee took the principles so seriously, where the principles directed the day to day activity and decision making of employees at every level, where employees held each other accountable, and where the leadership principles had such an incredibly impactful role in recruiting and hiring.
- So we have mechanisms, we have the tool set, we have the people that operate innovation. Now we need to ensure they have the right organizational ethos and setup to innovate.
- This is from the 2015 letter to shareholders
- But innovation is hard, and there are failures that we should be mindful of. At Amazon we learn from our failures, and then look take those learnings and evolve. http://www.forbes.com/sites/ryanmac/2016/04/05/jeff-bezos-calls-amazon-best-place-in-the-world-to-fail-in-shareholder-letter/#7a24121562f4 Jeff Bezos Letter to Shareholders 2016: “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. AWS, Marketplace and Prime are all examples of bold bets at Amazon that worked, and we’re fortunate to have those three big pillars. They have helped us grow into a large company, and there are certain things that only large companies can do. Invention Machine We want to be a large company that’s also an invention machine. We want to combine the extraordinary customer-serving capabilities that are enabled by size with the speed of movement, nimbleness, and risk-acceptance mentality normally associated with entrepreneurial start-ups. Can we do it? I’m optimistic. We have a good start on it, and I think our culture puts us in a position to achieve the goal. But I don’t think it’ll be easy. There are some subtle traps that even high-performing large organizations can fall into as a matter of course, and we’ll have to learn as an institution how to guard against them. One common pitfall for large organizations – one that hurts speed and inventiveness – is “one-size-fits-all” decision making. Some decisions are consequential and irreversible or nearly irreversible – one-way doors – and these decisions must be made methodically, carefully, slowly, with great deliberation and consultation. If you walk through and don’t like what you see on the other side, you can’t get back to where you were before. We can call these Type 1 decisions. But most decisions aren’t like that – they are changeable, reversible – they’re two-way doors. If you’ve made a suboptimal Type 2 decision, you don’t have to live with the consequences for that long. You can reopen the door and go back through. Type 2 decisions can and should be made quickly by high judgment individuals or small groups. As organizations get larger, there seems to be a tendency to use the heavy-weight Type 1 decision-making process on most decisions, including many Type 2 decisions. The end result of this is slowness, unthoughtful risk aversion, failure to experiment sufficiently, and consequently diminished invention. 1 We’ll have to figure out how to fight that tendency. And one-size-fits-all thinking will turn out to be only one of the pitfalls. We’ll work hard to avoid it… and any other large organization maladies we can identify.
- But we need smaller teams that came move fast with the mechanisms and the technology. Jeff created this concept of Two Pizza Teams in 2004-2005.
- So we have mechanisms, we have the tool set, we have the people that operate innovation. Now we need to ensure they have the right organizational ethos and setup to innovate.
- So let’s take those four factors, and create an innovation equation where, you have your two pizza teams using AWS, exhibiting the 14 leadership skills doing the working backwards process culture is the principal component in speed of innovation One of our technology execs (clearly an engineer) thought about that and in a an engineering, geeky way. So don't take the formula literally, but lets break down the four key values Here THE FOUR NEXT SUBSECTIONS innovation equation for you.
- I leave you with a simple way of looking the path forward.
- Switch to Video