Mike Bainbridge is running an executive visioning programme at Amazon Web Services. Before this, he ran their digital innovation programme, and was the Chief Digital Technologist at Rackspace. He demonstrates extensive experience and knowledge in building innovation strategies.
In this webinar, Mike shares his experience at Amazon – an organisation that many are inspired to emulate in terms of their best practices. He shares how Amazon’s success has been formed through their culture of innovation, which is ingrained in everything they do. The key takeaways are that everyone at Amazon takes an active role in innovation, and it’s fostered through mechanisms and processes deeply embedded in their organisation.
Culture of Innovation at Amazon
Many people are interested to understand what makes Amazon so successful and how we work. It all comes down to our culture of innovation that we have at Amazon. A culture of innovation is very important to us here. It’s ingrained in everything we do, and we see innovation as everyone’s job.
At AWS we hire people based on their cultural fit. So when you apply for a job with us, the questions we ask about you are based on our leadership principles and our culture. If you want to understand more about that, then I recommend having a read of Amazon’s fourteen leadership principles.
Today, I will speak about innovation, how we actually put it into the process at Amazon and how we make innovation everyone’s job because, at the end of the day, the most successful organisations that are constantly coming up with new products and new services are the ones who have a large number of ideas to pick from.
Innovation is everyone’s responsibility
I think where many companies struggle is that historically there’s been an R&D department or a product development department, and it’s the same group of people sitting in one room and coming up with the same ideas time and time again.
We want to change that and ensure that everyone is able to innovate. So with over a million employees globally, everyone is empowered to come up with new ideas. It’s no wonder that Amazon produces so many great products and services for its customers because we have such a huge pool of ideas to pick from.
The earth’s most customer-centric company
But what is very important for us is to have a mission, something that our innovation efforts focus towards. And the mission at Amazon is very simple: we are the earth’s most customer-centric company.
It sounds very simple and it’s also very broad. We’re not specifically focusing only on e-commerce or cloud computing. However, at the same time it’s also very specific because everything we’re doing is focused on the customer. And that’s our main key pillar for every single action we take here at Amazon.
This is something we’ve had in our DNA right from the very start of the organisation because Jeff Bezos, our founder and CEO, when he set the company up, said that Amazon is going to be built upon three key pillars:
- First, always put the customer first.
- Second, invent on behalf of our customer – create products and services that will make their life better.
- Third, when doing so – be patient.
One of the examples that you might be familiar with is the Amazon Kindle. And this case study is unique because Amazon was predominantly a bookseller, selling books online. So launching the Amazon Kindle and imagining that everyone had bought one would mean that all those warehouses and the delivery infrastructure would become obsolete. This is an example of a company almost trying to disrupt its own business model because it understands what a customer wants and puts the customer above everything else.
Launching a new product is only the beginning
One of the mental models we have at Amazon is that when you launch a new product, that’s not the finish line. Launching a product is actually just the start of the journey and the beginning of the iterative move forward to get the product in front of customers, collect the data from them and then improve it and make it better and better and better.
Kindle in this case is again a good example because the first generation of the Kindle wasn’t really good. It had a weird interface, and was a bit heavier than some paperback books, so that’s not the best, particularly when you compare it to today’s model after over 10 years of iterations and improvements. And this illustrates the iterative way of building products.
We launched Amazon Kindle to solve only one problem: allow customers to get books in 60 seconds. And that was the problem that we solved with the first version of Kindle. It had 3G so books could be downloaded almost instantly. Then over time, after customers were using it, we collected data and built in many of the other improvements, such as touchscreen, the backlight, improved storage and battery life, based on our findings.
At Amazon, we’re very clear that the job is never done with a product or service. You keep iterating and improving as you go.
Mechanism of Innovation at Amazon
But now I want to talk about the mechanism of how Amazon innovates. And this mechanism is made up of three things:
Let’s imagine that there’s a problem.
- BUILD. The first part of the mechanism is the tool or the service or the process that you put in place to fix that problem. And honestly, that’s where most organisations stop.
- ADOPT. The second part of the mechanism is adoption or, in other words, making sure that when you put this tool or process in place, people are going to actually use it. You need to make sure they have appropriate training and that they understand what problem or challenge that tool or process is trying to solve. That gives them ownership of the problem.
- INSPECT. The third part of the mechanism is inspection. After a month, or three or six, you actually go back and check that the people are still using the tool or process in the right way, and that the problem itself has stayed the same and hasn’t changed.
What happens so often is the problem changed and the solution you put in place is no longer fixing it. Then these processes become a proxy for management. You put the process in place, you fix something, it’s great. But then something changes and people aren’t empowered and don’t have ownership of what they’re doing. They can’t identify that the problem has changed and keep following the process you put in place anyway.
This is the foundation for our mechanism that we use at Amazon and AWS for innovating, building new products and services – we call it ‘Working Backwards’. It’s the repeatable mechanism which allows everyone to innovate in a consistent way. We also train people on how to use our ‘Working Backwards’ process.
Let me give you an example of how ‘Working Backwards’ works.
We start with a customer problem or a customer challenge.
Then the first thing we do is capture our idea about how to solve it by writing a press release. It talks about the main benefit for the customer. And the idea author writes it as if the CEO will be reading it out as an actual press release.
Then this press release is passed to the CEO and there’s a transfer of responsibility.
Now it is CEO’s job is to help the idea author get that press release in front of the right person, the right budget holder, the right product manager.
Then that press release will go through a number of iterations as it goes through the different tiers of leadership.
Another document the idea author has to prepare are two versions of FAQs or frequently asked questions. First, the set of questions customers would ask you, and also the answers. The second FAQ is questions that the stakeholder or a budget holder would ask you. For example:
- How are you going to measure success?
- What metrics are you going to use to track it? products and services that will make their life better.
- What’s your next iteration going to be?
- How many people do you need to build it?
- What technology will you use?
Often these documents make up the business case in other companies. We write them in the format of questions and answers.
Then the final asset is a set of visuals. That’s typically a small comic strip showing the customer experience of how the customer uses that product or service.
Then these passive assets become the documents we use when we share the idea with the next group of stakeholders until eventually we get to the senior stakeholder who knows if the idea is big enough. Might even be Jeff Bezos himself.
Then we present the idea in a meeting.
They read through the press release and then all the questions they would normally ask you are already covered in the FAQs as you’ve already gone through the stages of iterating the documents, going through different layers of management. And while the press release is one page, FAQs can often be up to 60 or 70 pages.
Then when you ask the question at the end, “Can we start building it?” the only answer they can give you is “Yes”, because you’ve already done all the due diligence to prepare.
We use it for everything that you might be familiar with. You know, from that one-click buy box to the Amazon-echo-powered by Alexa. All of them go through the same mechanism. It’s a repeatable way for allowing anyone to come up with ideas and get them actioned.