Separating myth from reality in evaluating Amazon’s methods has taken on a new urgency both inside and outside the company as the future is viewed without Mr Bezos at the helm. He announced this month that he would step down as managing director this summer. So it’s time two former Amazon executives, Colin Bryar and Bill Carr, promised to pull back the curtain on their new book, Working Backwards: Insights, Stories, and Secrets of Inside Amazon.
The authors say they interviewed “many Amazonians past and present” and, based on the glowing blurb, at least had the tacit approval of current management. The fact that “working backwards” is much closer to an authorized company profile than a tell-all does not necessarily affect its interest. Mr. Bryar and Mr. Carr each played an important role in the company during critical phases: One as Chief of Staff for Mr. Bezos when the Kindle and Amazon Web Services were put into operation, and the other started and ran Prime Video. Their portrait of Amazon’s culture and processes is fascinating and insightful, if not always in the way they intend.
First, the authors want to show the operating philosophies that are responsible for the monumental achievements of Amazon. Rather than offering a boring catalog of the company’s 14 governance principles and three implementation mechanisms, Mr. Bryar and Mr. Carr provide concrete and accessible examples of how these are put into practice across a range of roles, from attitudes and communication to organization and product Design. Mr Bezos was clearly not joking when he said in his first letter to shareholders that Amazon employees are not free to choose whether to work “long, hard or smart”. (It must be all three.)
“Working backwards” conveys the company’s exhaustive focus on customer satisfaction. However, many of the individual business practices described are not fundamentally original. Although they have often acquired catchy Amazon-specific labels, many are just variations of well-known Six Sigma processes and management theories or practices developed by other companies such as Toyota or Microsoft. For example, as the authors put it:
When Amazon teams encounter a surprise or confusing problem with data, they are adamant until they discover the root cause. Perhaps the most widespread technology at Amazon is the COE process (Correction of Errors Process), which is based on the “Five Whys” method developed by Toyota and used by many companies around the world. When you see an anomaly ask why it happened and repeat it with a different “why?” until you get to the underlying factor that was the real culprit.
There is nothing wrong with adapting a portfolio of existing best practices, adding a few of your own, and then stepping on the gas. However, the authors repeatedly claim that these practices, both individually and collectively, provide “a tremendous competitive advantage”. Your competitors cannot simply copy the definition of a competitive advantage. If, as the authors claim, Amazon’s secret sauce is just a collection of “teachable business practices,” then they cannot represent a competitive advantage.