Working Backwards
And Other Insights, Stories, and Secrets from Inside Amazon
By Colin Bryar
Category: Management & Leadership | Reading Duration: 23 min | Rating: 4.4/5 (166 ratings)
About the Book
Working Backwards (2021) tells the story of how Amazon changed the way people live. It explores founder Jeff Bezos’ leadership philosophy, and reveals how this philosophy has informed Amazon’s most iconic products and services.
Who Should Read This?
- Executive coaches looking for fresh insights
- Entrepreneurs hoping to turbo-charge their business
- Managers wanting to boost their teams’ performance
What’s in it for me? Take delivery of Amazon’s winning leadership philosophy.
What can your business learn from the world’s most innovative, game-changing company? Amazon has revolutionized the way people shop, read, and live. And as the chapters that follow reveal, it can transform the way you work, too. Packed with fascinating anecdotes and plainspoken advice, this is your guide to thinking like an Amazon leader – or as they like to call themselves, Amazonians.
You’ll take a look behind the scenes and learn how Amazon makes decisions, runs meetings, and hires the best people. You’ll also discover Jeff Bezos’ key leadership principles as you explore the company’s hopeful beginnings, and the stories behind its most iconic products. From Kindle to Prime to video-on-demand, you’ll explore how Amazon gets it right so often – and what happens when it doesn’t.
In this summary, you’ll learn - how Amazon Prime changed the way we shop;
- why Jeff Bezos hates PowerPoint presentations; and
- the secret weapon in Amazon’s recruitment process.
Chapter 1: Amazon’s leadership principles are the foundations of its success.
Amazon’s story starts with one man. In 1994, Jeff Bezos worked for a New York hedge fund. That year, Bezos learned that in the coming years, the user base of the internet was predicted to grow by over two thousand percent annually. Soon after, he made a bold decision that embodied the leadership principles that would come to define Amazon’s philosophy: he quit his hedge fund job and made plans to start his own Internet-based business.
Bezos realized that books were the perfect product for an e-commerce business. Even the biggest bookshops could only carry tens of thousands of titles at a time, whereas over a million books were in print in the United States alone. By offering an online bookstore, Bezos would be able to offer almost every book that was available. The key message here is: Amazon’s leadership principles are the foundations of its success. Bezos’ visionary thinking exemplified Amazon’s Invent and Simplify principle. Amazon leaders are always searching for new and innovative ways to get things done.
By quitting his job, Bezos also demonstrated another principle: a Bias for Action. Amazon leaders believe that speed is crucial to business success. Even if you make a mistake by acting too hastily, you can usually recover. Rather than spending a lot of time studying your options, it’s better to take a calculated risk, like Bezos did when he left the hedge fund. Additionally, by daring to be part of the Internet revolution, Bezos wasn’t afraid to Think Big. This is a key principle for Amazon’s leaders, who understand that dreaming small only leads to small achievements.
Instead, the people at Amazon envision a bright, bold future, and it’s this vision that inspires their incredible results. When Bezos started his online bookstore, the company’s first offices were in a cramped basement in Seattle. Instead of proper desks, they used old doors nailed to four-by-fours. This embodied the principle of Frugality that still exists at Amazon.
Leaders are celebrated for getting more done with less, and there are no prizes for rising headcounts or budgets. Finally, although Amazon told its customers that their books would be sent via first-class post, in fact, each book was sent via priority mail. This cost the company more, but it delighted customers when their books arrived much sooner than expected. Today, an Obsession with Customer Experience still lies at the heart of every decision Amazon makes.
Chapter 2: Amazon has eliminated urgency and confirmation bias from its hiring process.
In too many companies, business-critical decisions are treated as trivial. Imagine you’re a senior leader tasked with buying a multi-million-dollar factory to manufacture your company’s products. The decision you make will have a significant impact on the company’s bottom line for years to come, so you should have a rigorous process to ensure that you choose the right factory. Yet when it comes to hiring the right people, many companies have no rigor in their recruitment processes at all.
This is a big problem. After all, your hiring choices also affect your company’s performance in the long term. That’s why Amazon is so precise in its recruitment decisions. Here’s the key message: Amazon has eliminated urgency and confirmation bias from its hiring process. Urgency bias happens when a team urgently wants to fill a vacant role, perhaps because they’re having to do the missing’s person’s work. This sense of urgency leads them to overemphasize a candidate’s strengths and downplay his weaknesses, simply because they’re so eager to find someone.
In many cases, that means they end up hiring someone who isn’t right for the role. But Amazon has a secret weapon that eliminates urgency bias in its recruitment process: the bar raiser. A bar raiser is a highly experienced interviewer who doesn’t belong to the team that’s making the hire and doesn’t have a vested interest in making sure that someone is hired quickly. The bar raiser always conducts the final interviews with candidates, and, crucially, has the power to veto candidates if they’re not a good fit. This ensures that teams put a lot of rigor into their recruitment processes. After all, they know that the bar raiser will only allow the best people to join them.
Another hiring pitfall is confirmation bias. This can occur when several interviewers interview the same candidate. Once the first interviewer has completed her interview, she may talk informally to the other interviewers about whether they liked or disliked the candidate. This might sound harmless, but it sets up assumptions in the other interviewers’ minds about how good the candidate is.
When they conduct their own interviews, they will look for evidence that confirms their assumptions, rather than fairly evaluating the candidate. Amazon eliminates confirmation bias by having all interviewers write detailed reports on the candidate directly after their interviews, and before talking to their coworkers. When they come together to discuss the candidate, the interviewers refer to these reports. This system helps ensure that each opinion is that person’s alone.
Chapter 3: PowerPoint presentations are inadequate for conveying complex information.
What does a meeting at Amazon look like? The answer might surprise you. For starters, there are no PowerPoint presentations – ever. Second, the first twenty minutes of every meeting is spent in total silence.
This silence is the key to Amazon’s effective decision-making. Jeff Bezos decided in 2004 that PowerPoint was derailing his senior management meetings. Up until then, every week, his senior managers took turns standing up and presenting on an important topic. But these presentations often weren’t effective. To truly understand the topic at hand, the attendees needed to examine a lot of information. Not only that, but they also needed to explore this information in depth, so that they could understand how different ideas and pieces of data fitted together.
The key message is this: PowerPoint presentations are inadequate for conveying complex information. You probably already know that PowerPoint relies on slides and bullet points, with just one idea displayed on each slide. But as Amazon’s senior management team discovered, this makes it difficult to appreciate the connections among the ideas, or to refer one idea back to another. Additionally, the use of bullet-point lists to communicate means that ideas lose all their nuance. As they’re squashed into a bullet-point format, complex topics are reduced to their simplest aspects. Without knowing the finer points of a topic, it was impossible for Amazon’s leaders to make informed decisions.
Enter the six-page memo. In 2004, after years of frustrating meetings, Amazonians replaced PowerPoint with a six-page memo. These days, meeting attendees spend twenty minutes of each meeting reading this memo. The six-pager uses a narrative structure to explain the topic at hand. This allows the topic to be explained in greater depth and detail, using normal prose instead of bullet points. Indeed, a six-page memo contains around nine times more information than the slideshows it replaces.
This also gives much more scope for connections among different ideas to be explored. The six-page memo also levels the playing field among staff members. When PowerPoint was used to discuss new proposals, meeting attendees would inevitably judge the proposals partly on the presenter’s speaking and graphic-design skills. Skilled speakers with compelling graphics tended to receive more positive responses, regardless of how good their proposals actually were. The six-page memo, however, focused attendees’ attention strictly on the ideas themselves, rather than the presenter, and so removed bias from the feedback process.
Chapter 4: Amazon stands out by considering their customers’ interests before their own.
What does working backwards mean? At Amazon it means thinking of the customer first. When Amazonians develop ideas for new products, they don’t start by thinking about Amazon’s needs and capabilities. Instead, they only consider what would make their customers’ lives better.
Once they’ve hit upon an answer, they work backwards to make the customer-centric product a reality. The key message here is: Amazon stands out by considering their customers’ interests before their own. Working backwards from your customers’ needs might sound like a no-brainer, but actually, most companies work forwards. Instead of considering the customer experience first, product teams take their inspiration from closer to home. They may start by assessing the capabilities of their research and development teams, or constraining themselves by considering their business’s preferences regarding costs and profit margins. Once they’ve developed a new product that meets the company’s needs, they then pass it down to their sales and marketing department, which thinks about how it can convince customers to buy the product.
Often, this working forwards approach leaves businesses holding products that they want, but customers don’t. So what does working backwards look like in practice? Well, if a product team has an idea for a new product, its members start by writing a one-page document. This document is written in the form of a press release. It imagines that the product has already been made, and it describes, in glowing terms, what the product’s benefits will be for Amazon’s customers. For instance, the press release for Kindle emphasized the e-reader’s fantastic screen, and the easy book-buying and download experience.
Of course, this press release won’t really get released to the press. Instead, it’s used as a product proposal, which various internal stakeholders will read in order to decide whether to take the idea further. As well as the press release, the product team also writes a frequently asked questions document, or FAQ. At around five pages, the FAQ answers questions that either customers or internal staff might have.
For instance, Amazon’s executive leadership team might want to know how many new data scientists or software developers they would need to hire to build the product. By attempting to answer essential questions, the FAQ addresses whether the product is viable, or even desirable, for the company itself. By working backwards from the press release and FAQ approach, Amazon ensures that it only develops viable products that make its customers' lives faster, easier, or less expensive.
Chapter 5: Obsessive customer focus led to Amazon's next-day delivery option.
In 2004, Amazon had a problem. Its e-commerce sales were growing in every category, but its rate of growth was slowing. At the same time, the global e-commerce market was getting bigger every year. If things continued as they were, Amazon was going to become a smaller and smaller player in an ever-larger industry.
Luckily, Jeff Bezos had a plan that would change Amazon’s fortunes, and change the face of e-commerce, forever. Bezos eventually realized that Amazon’s biggest stumbling block wasn’t its pricing or its product range; it was its convenience – or the lack of it. Here’s the key message: Obsessive customer focus led to Amazon’s next-day delivery option. In the mid-2000s, many consumers still didn’t find online shopping convenient. Most products still took several days to arrive, meaning that people who needed something urgently, like a last-minute gift, preferred to do their shopping offline, in a brick-and-mortar store. Many customers were put off by shipping costs too, which were relatively high in the early days of e-commerce.
In fact, customers were more likely to buy from Amazon when the company discounted shipping than when they discounted their actual products. Bezos was faced with a hard choice. Amazon had already invested $600 million in its fulfilment infrastructure. If it changed course and revamped its shipping strategy, the return on its huge investment might take seven years to materialize. Alternatively, it could hold off on making major changes and try to improve customer experience by tweaking the systems and infrastructure it already had in place. Ultimately, Amazon’s leadership principles guided Bezos’ decision.
Amazon was obsessed with its customers; if the company chose not to make major changes, then it might be better for its bottom line in the short term, but it wouldn’t be better for its customers, who craved greater convenience. And Bezos strongly believed that whatever was in his customers’ interests would ultimately be in his shareholders’ interests, too. With this in mind, Bezos and his team decided to launch a subscription membership service: Amazon Prime. Prime offered customers free two-day shipping and a discounted option for next-day delivery, and by 2018, around a hundred million customers had signed up.
Suddenly, customers who needed something urgently could shop online and choose next-day delivery, with no need to visit a physical store. In this respect, Amazon Prime raised the bar for speed and convenience across the e-commerce industry. Amazon remained a major player and left its competitors rushing to catch up.
Chapter 6: Amazon’s first video-on-demand service ignored the company’s leadership principles.
Not even Amazon gets things right all the time. In 2005, senior managers were on stage at an Amazon launch party. The product they were launching was called Unbox, a service that would enable customers to download films and tv shows and watch them on their PCs. At the launch, the audience was given a demonstration of how Unbox would work.
As a movie was downloaded and flickered onto a big screen, the audience laughed nervously; the image was upside down. It was an omen of things to come. The key message is this: Amazon’s first video-on-demand service ignored the company’s leadership principles. In 2005, movie-hungry consumers could trek to their local Blockbuster on a Friday night, perhaps only to find that the movie they wanted wasn’t available. Or they could subscribe to Netflix, which was then a mail-order DVD firm, and wait for their chosen DVD to arrive. Instead of these sub-optimal solutions, Bezos wanted to give customers a way to choose movies they actually wanted to watch and to watch them immediately, all from the comfort of their living rooms.
This was a good idea. The problem was, when it came to the Unbox service, the Amazonians in charge ignored their key leadership principles. First, they failed to live up to their principle of relentlessly high standards. To enable customers to download their chosen movies or TV shows, Amazon used digital rights management software developed by Microsoft. However, this software was full of bugs; many customers had problems with their downloads, and for some customers, the software didn’t work at all. The product team should have addressed these problems before the launch, but because they couldn’t find an alternative to Microsoft’s digital rights software, they ran with it.
This led to poor reviews of Unbox from both customers and the press. Second, during the development stages of Unbox, Amazon failed to check what their customers actually wanted. Amazon assumed customers wanted to watch digital movies and TV shows in high resolution. But delivering these high-quality images meant that download times were very long; sometimes it took customers four hours to download a single movie. And ironically, in 2005, customers didn’t care much about the quality of the images. That year, millions of people were discovering YouTube, a platform offering low-quality videos that users had created themselves – and consumers could start watching them quickly, which was more important to them than image quality.
Chapter 7: Working backwards saw Amazon segue into hardware and develop the Kindle.
Amazon doesn’t mind being misunderstood. In 2005, Apple unveiled iTunes, the groundbreaking application that would allow customers to buy and store music digitally. Within months, senior leaders from across the music industry were asking Jeff Bezos when Amazon would release its own digital music product and start competing with Apple. Some music executives even tried to goad Bezos into action.
But Bezos wasn’t thinking about the music industry at all. Instead, he was thinking about books. Rushing to create a copycat digital music product to compete with iTunes would have gone against Amazon’s leadership principles. If Amazon had focused on rivaling Apple’s iTunes offering, it would have been prioritizing the competition and not its customers. After all, iTunes was a fantastic product. Were customers really yearning for an alternative?
The key message here is: Working backwards saw Amazon segue into hardware and develop the Kindle. Instead, Bezos and his team spent the six months after the iTunes launch thinking about what customers might want next from a digital product. Eventually they came up with an answer: a fast and convenient e-reading experience. Back then, e-books could only be read on a PC, which made for an unenjoyable experience. Bezos’s vision was to take e-books off PCs and onto a purpose-built digital device, through which the customer could browse, buy, and start reading any book, all in a matter of moments. This device would eventually become known as the Kindle.
But how could Amazon create this perfect e-reader? Bezos was adamant that Amazon needed to make its first foray into hardware development and develop the device itself. Many people on his leadership team vehemently disagreed. Amazon was an e-commerce company, they said, and hardly anyone in the senior management team knew the first thing about creating hardware. But once again, putting customers’ needs first meant that creating the Kindle in-house was Amazon’s only option. Outsourcing its creation to an external hardware development firm would mean that Amazon wouldn’t be able to continually tweak and improve it.
So Amazon did what it does best: it worked backwards. It identified what its customers wanted, then it hired people with the abilities and skill sets that would enable them to make it a reality. To date, millions of Kindles have been sold, and Amazon has changed the way that books are consumed – forever.
Final summary
The key message in this summary is that: Amazon conquered the world by putting customer experience first. Instead of focusing on quick wins for shareholders, Jeff Bezos invested Amazon’s resources into developing products and services that make their customers’ lives better and easier. By thinking big and obsessively focusing on high standards, Amazon has grown from a humble online bookstore into a titan of world industry.
About the Author
Colin Bryar spent twelve years as a senior leader at Amazon, and served as chief of staff to Jeff Bezos. Bill Carr is a former Amazon Vice President of Digital Media. Carr managed the launch of Amazon Music as well as Prime Video. Bryar and Carr are cofounders of Working Backwards LLC, an executive coaching firm that teaches business leaders how to implement Amazon’s management practices.