Read the full interview at inpractise.com

We recently spoke to a former VP, Amazon Logistics Europe about the four of Amazon's leadership principles: Think Big, Invent and Simplify, Hire and Develop the Best and Bias for Action.

In the full interview we also discuss:

  • The evolution of amazon's logistics operations in Europe
  • How Amazon has focused on logistics as central pillar for driving the success of its e-commerce activities
  • How Amazon's adherence to "lean" process thinking and process standardisation helped the business scale more efficiently
  • Why having clear values and principles is critical when facing new situations effectively
  • The importance of structuring information and data in a way that everyone in the company can understand the metrics that matter
  • Why a narrative format for business reviews is powerful
  • The Pillars of Amazon's Hiring Process

Can you share Amazon's core leadership principles?

Amazon has 14 leadership principles, which are documented and you can easily find online. They really guide and structure the way you do business and the way you interact, within Amazon and outside of Amazon and are really the guiding principles for leaders within the company. Out of these 14, when I arrived at Amazon, I was just short of 30, and I was already using some of them. Maybe they didn't have the same name, but they were my way of managing business and I had some that I considered very important. For example, if you talk about customer obsession, obviously this is very important for the company, and they put it in another way, another scale, another level. But of course, when you are managing a business, you have a customer obsession, a customer focus, and maybe you go straight to the consumer, instead of the customer.

There were many of them that were there. Amazon, for sure, pushed it an extreme, very strong level. Also, when you joined the company, it is because your own leadership skill or what you are looking for are reflected in the leadership of the company. But there were four, that were split into two, which were key, where either I developed them differently, or took another scale, even in my mind, in the way that I was using them. Those are particularly important and are formed into two groups.

The first three are the ones which enable you to do something on another scale. The first one is called 'Think big'. Thinking big is not something that you will come into a company and the people will tell you that you have to think big. People are usually telling you to manage the business you have to manage and have your plan, but they never say, think big. Thinking out of the box is slightly different. It's also important, but so is think big. Don't think of your business of today or next year; think of your business in five or 10 years and try to put into perspective what you have to do to get there. Also, think big says, even if you consider an idea something that you should not do, think about it, because maybe you should do it.

The great example was the last mile. For many people, the carriers were doing the deliveries for Amazon. There was no way to enable us to do the deliveries. That was not our core business and there was nothing, really, to save strictly speaking, because it is not a high-margin business anyway. Why would we make that part of the business? And it also required a lot of effort. But when you look further and you really think big and you think about what you control when you do that yourself, in terms of experience and cost, then you start to realize that it is, maybe, worth the time you are spending on it and it is not out of reach and is doable. It's not really thinking about what you can imagine it could be, but sometimes, dreaming big, about what you could do.

Many things that have been done at Amazon have been done when people have been pushed and told, don't think about that, but think 10 times bigger. What would you do differently if you were going there? In Amazon, obviously, it was required because, indeed, over time, we discovered we had this thing, getting 10, 100 times bigger. Over the course of my 17 years, the business became over 300 times bigger than it was when I joined the company and, obviously, we had to anticipate that. That is one of the key elements that has never been exposed before, going to Amazon. I was always sticking to the plan that I was given, particularly when you are in the supply chain and operations where, usually, you wait for your CFO or your commercial department, or the board of the company, to tell you what they expect in the next two to three years and you respond to that. At Amazon, you could respond to something different. You could respond in your own way, and not wait for the company to make the plan, and try to make your own plan and explain why you think it will be interesting. That was a big one.

To do that, there are two elements, which are two other key principles. You need to invent and simplify. This is also one of the leadership principles at Amazon. You can adjust and reproduce, to scale, to really scale your business, particularly when you grow very fast. You can adjust and reproduce what you do, all the time. Even if you do it well, you have to find a way to do it better. Sometimes, it is just not possible. The level and the pace of your business goes so fast, if you do it the same way you've always done it, unfortunately, you cannot do it anymore. Therefore, simplifying and automating was a way to scale even faster. We were pushed to do it, because complex is very difficult to control. With complex processes, it is very hard to replicate the control everywhere, if there are a lot of parameters and so to simplify it, it's easier to transfer, it's easier to transmit that and it's easier to control, in automating, because sometimes you reach another level.

Coming from the lean manufacturing piece, there was a senior vice president in the company, who was always saying, a human is a Three Sigma machine, in the Six Sigma thinking. That's a maximum, therefore, 99% of the time, you do things right and when you do repetitive tasks, you never get better than that. Now, only a machine or processes which are very controlled, can move to Six Sigma, which is 99.9% of the time. In that case, you start to have much better control over what you, ultimately, deliver. A machine can also be an algorithm, it's not only a robot. That is the second one, which is fueling, as well, this thinking that we need to think ahead and we need to think big.

The third piece, in order to do that, this triptych constructing the way that Amazon is projecting itself, is hire and develop the best. That is the people side. Try to really, really spend time and energy to ensure you hire the right people to the company and to hire people, not only on what they can deliver now, but also what they could deliver tomorrow. It's the first time that I started to hire people, not for the job that they were doing right now but I was hiring people for the job they were able to do in two years' time. Even if, in the first year, they were a little underused. But I knew that, two years later, I had the right people in the right job. If I hire well, these people will be able to develop and follow the pace of the company. That was a key element, as well. Don't hire for tomorrow; hire for in a year. Don't hire for yesterday; that's a key fact, as well.

Amazon has a very structured process and a very strong process, for hiring, because nobody is better than anybody else, in hiring. I know that some people have skills there, but there is even a process behind that. In order to do good hiring, you need to get strong processes, in order for people to comply. When you have strong processes, you increase your chance of a good hire. You don't eliminate bad hires; I've had bad hires. But you increase your chance to have a successful hire, into your company. Those are the three things that ensure the growth.

The last one is a little bit different, which is called biased for action. Many companies may say that they are like that, but many companies are so slow in doing things. A lot of companies have great ideas for doing things. Many companies have good thinking and good strategies, but they don't know how to put the strategy into practice. Either because they fear failing, or because they are not 100% sure and they want to check again, to go deeper. Amazon has a very strong inclination to do things, to prove if they are right or wrong. They sometimes fail but, obviously, if you are really inspired by the things I've mentioned, with the right people, usually, you are quite successful. Over time, you have more success than failure, in what you do, which is the most important. At Amazon, you were always praised for what you tried, and not blamed for what you failed at, necessarily. Obviously, if you start to fail more than you succeed, over a long time period, then there will be challenges. But on the front end, people were more challenged if they didn't try anything, than if they failed at doing something.

This biased for action is what I call a taking risk aspect. Go and do things and try. If you want to think big and realize big, you need to be biased for action. You can think big, and put lots of things on paper and never realize anything. The only way to impact the business is to make them and prove your concepts and sometimes fail. Those are the four leadership principles which have structured, over time, my career at Amazon and have really shown me a different way of doing business.