This is a blog post about how culture can play a major role in an organization’s success. A Tweet and a YouTube video are the motivations for this post.
The Tweet
In TikTok Dharmesh added that “if Culture is done well, Strategy becomes easier”. This Tweet and the TikTok post by Dharmesh Shah, the Co-founder and CTO of Hubspot were very insightful to me.
The YouTube video
Secondly, Amazon’s President and CEO Andy Jassy recently appeared in the New York Times DealBook Summit where he was interviewed by Andrew Ross Sorkin.
You can also watch Jassy’s interview with Kara Swisher in 2022 Code Conference. Mostly similar topics were covered.
Shreyas Doshi, a product coach I learn from, once mentioned that Amazon is a “generational company” whom other companies want to emulate. One of the aspects to emulate is Amazon’s culture. Jassy demonstrated how Amazon’s culture fundamentally drives every aspect of business decision making. And how the culture ties with the strategy, products, sales and profitability. You can refer to Amazon’s values and leadership principles here. Jassy especially refers to customer obsession, operational excellence, and long term thinking in his recent talks.
It all comes back to customer experience
Andy Jassy placed customers and customer experience at the center of all of his answers.
Jassy defended Amazon’s rapid organizational growth during the pandemic as a decision taken to “shade on the side of the customers”. He explained how in uncertain economic conditions, “customers err on the side of companies that provide great customer experience” and deliver goods “reliably and quickly”. He affirmed that he would repeat the rapid infrastructure and people expansion if he had to do it again.
While discussing the OneMedical acquisition, Jassy mentioned the Customer Satisfaction (CSAT) Scores of patients and physician retention rate of the business as the reasons that made the decisions to acquire OneMedical simple. I am sure in additional to other usual due diligence.
Jassy framed Amazon’s objection to unionization by Amazon employees as addressing employee experience. According to Jassy, If Amazon has a direct relationship with its employees, then the needs of employees can be assessed and addressed in the order of priority. Union adds a layer of bureaucracy and slows this process down.
Jassy did his own customer support live on stage as he gave out his email address, [email protected], in response to an audience member and an Amazon customer’s question about their content being rejected by Amazon. I discuss my own experience of Amazon and their product Audible here.
It is easy to be Jassy if answer to every question begins with “customer experience”.
Dive deep and bring data
It is easy to be Jassy if you know all your numbers. Understanding every aspect of your business in depth enables Amazon to make decisions to scale a division, shut down a division, or improve operations.
Jassy brought data and details for every business he discussed. When discussing the marketplace business, he called out growth numbers; “retail business grew 39% and $249 billion annual run rate”. He mentioned that Amazon doubled the pre-pandemic fulfillment center footprint in 24 months. Jassy mentioned how knowing this number and the growing customer demand numbers during pandemic helped make the swift decision to start building infrastructure.
Jassy referred to the Prime subscriber base of 200M+ couple of times. Jassy offered insights on how Amazon customers are “trading down in model and looking for stocking stuffers”. How Amazon is using algorithms to do “advance inventory buying” to get products quickly to customers. He also described how Marketplace, Fulfillment by Amazon (FBA), and last mile logistics serve the 2M+ sellers on the marketplace.
While describing, Prime video strategy, he dove into Lord Of The Rings and sports viewership numbers. Jassy mentioned, “Thursday night football had double the expected 5-6M viewers of which 20% more viewership in the 18-34 demographics” which is important to all constituents involved. He also hypothesized how Prime video over time becomes a standalone business as the “worlds best collection of streaming content” and “one place to Find everything they want”.
Think Big and longterm
In both the DealBook and Recode interviews, Jassy described how Amazon places size of the business squarely at the center when thinking about their corporate strategy. Jassy described the four questions that are asked and answered at Amazon before an idea is pursued;
- If we succeed in the idea, will the size of market be big enough for Amazon?
- What do we know about the current customer experience of this sector, their CSAT scores and related data ?
- Can we offer a differentiated experience than the one being offered today?
- Do we have internal expertise to pursue the idea? if not can we acquire it quickly?
Jeff Bezos once described the three pillars of Amazon as Prime, Marketplace, and AWS. Jassy described how many of the ideas currently being pursued now can be a standalone business as large as or even bigger than the current three pillars.
Jassy walked through how Project Kuiper fits the Amazon scale. Project Kuiper would bring fast, reliable, and inexpensive broadband connection to 100s of millions of people around the world who, in 2022, still dont have reliable access to the internet.
Finally, it is easy to be Jassy if you understand Amazon’s scale.
Other honorable mentions of Amazon’s culture include the 6-pager briefs with unlimited appendix and inventing for the customers. Jassy claimed that the “6-pagers are much better way to go through information”. Andy Jassy also highlighted how the last mile delivery made by drones and the cashier-less checkout are expamples of Amazon inventing ways to improve customer experience.
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[…] I wrote in my recent blog post “It is easy to be Andy Jassy“, a good organizational culture makes many things easy for the employees. Improving hiring […]