A Critique of the Amazon Leadership Principles, Part 4
In Part 1 of my Critique of the Amazon Leadership Principles, I covered the first two principles of Amazon’s guiding documentation: Customer Obsession; and Ownership. In Part 2, I went over three more principles: Invent and Simplify; Are Right, A Lot; and Learn and Be Curious. In Part 3, I covered these three principles: Hire and Develop the Best; Insist on the Highest Standards; and Think Big. In this article, I will cover these leadership principles:
- Bias for Action
- Frugality
- Earn Trust
Each section begins with a quote from the original document, followed by my critique. This is a work-in-progress and I acknowledge that my critique is subject to… critique. This is Medium, so please feel free to highlight those sections with which you agree or disagree, and leave your comments.
Bias for Action
Speed matters in business. Many decisions and actions are reversible and do not need extensive study. We value calculated risk taking.
I don’t have a criticism of this point, since the keyword is “calculated.” You have to take risks if you want to move beyond the status quo. I would just add that there should always be an autopsy of results. After you’ve activated your plan, you need to spend time figuring out what went well, what went poorly, and what knowledge can be applied to the next iteration for improved results. If you approach risk taking with this framework for doing better, then you’ll get value out of every action, even when you fail.
Frugality
Accomplish more with less. Constraints breed resourcefulness, self-sufficiency, and invention. There are no extra points for growing headcount, budget size, or fixed expense.
Frugality is useful for maintaining profit margins. And if you’re a start-up, then you need to bootstrap and find ways to get more done with less. You’re competing against companies with bigger pockets, so you have to be nimble and creative to produce similar outputs. To that end, if you apply the principle of frugality to your solutions, you’ll be far ahead of people who are more liberal with their spending.
That said, you have to apply frugality where your risks are low, while also being generous where it matters. If you are frugal with your employees, then you could end up with a high degree of turnover or unhappy workers who are less effective. If you are frugal with your customers, then you could end up with a lot of complaints about your products, and a decrease in the amount they spend with you over their lifetimes (i.e. LTV, or Customer Lifetime Value).
Instead, think about spending money on things that improve the quality of life for your workers. This can make a huge impact on employee satisfaction — they’ll be excited to come to work, and they’ll produce better results. Spend money on packaging if you want customers who are not just bargain-hunters. The unboxing experience will feel more rewarding for those customers who are driven by factors other than price, and they’ll be your greatest advocates. And, spend money to improve the quality of your product for the same reason. Frugality is great, so long as you are mindful of how you apply it.
Earn Trust
Leaders listen attentively, speak candidly, and treat others respectfully. They are vocally self-critical, even when doing so is awkward or embarrassing. Leaders do not believe their or their team’s body odor smells of perfume. They benchmark themselves and their teams against the best.
Benchmarking against the best is ok, but I like The Infinite Game better. In a finite game, you’re playing against other players with a start and end point. This is not how business actually works, if you’re doing it right. Instead, you want your company to be perpetually better. I’m sure that the leadership team at Amazon knows this, even though it does not show through in this principle.
Benchmark against yourself. What are your KPIs? Have your outputs improved in quality, quantity, or value since your last iteration? Do team members have higher morale and a higher sense of accomplishment? Do they find purpose in the work they do? Figure these things out, and you’ll be better, regardless of what the competition is doing.
There’s one more piece to this that I should address: “Leaders do not believe their or their team’s body odor smells of perfume.” It’s an interesting analogy that speaks volumes of the culture at Amazon. I’ll just say this: if your team is performing poorly, the best way to get them to perform better is by addressing the problem in a palatable way that doesn’t make people feel awkward.
If a team member’s poor performance is an isolated incident, then you can try the Sandwich Technique. The idea is to sandwich your negative criticism between two positive observations. You will need to be artful about the delivery or it will come across as disingenuous. So, try to make the three points as closely related as possible. A statement like, “You’ve got nice hair. Your report was terrible. I like your shoes” is unlikely to be effective. But a statement like, “I like the first 3 paragraphs of your report. Paragraph 4 concerns me. The rest of the report is great” is a lot closer to something palatable. Just be specific about your criticism so that the worker knows what you need fixed.
The Sandwich Technique has faced a lot of criticism for coming across as pandering, and for deflecting from the main source of criticism to the point where the problem never gets resolved. One alternative is Feed Forward. Rather than giving feedback on something bad that happened in the past, aim for positive suggestions for the future.
If the problem is not just an isolated incident, and a worker continues to perform poorly, then it is likely one of two things. Either they lack the capability to perform their job, or they lack the motivation (refer back to The Skill / Will Matrix). You’ll need to address the performance issues directly, and determine whether to retrain the person, put them in a new role, or help them find purpose in their work. The last thing you want is for people to be scared of talking to you. So make sure that you do your best to remove any anger or frustration from your delivery. Instead, frame the problem as a separate thing that you need to solve together. “It looks like we might need to revisit training on this skill” will come across much better than “you aren’t very good at this.”
You usually have the option to terminate an employee, but remember that hiring is time-consuming and costly. If the problem is a lack of training, then it can be easily solved, and you should do your best to give the worker the skills that they need for success. It’s much harder when the problem is a lack of motivation. You’ll have to dig deep to figure out whether it’s repairable, or if you need to cut your losses. If you do terminate a worker, do so under the best possible circumstances. Try to make it situational rather than personal, offer severance, and give them the resources to find a new job where they are more likely to feel fulfilled.
What’s Next?
In Part 5, I cover the last of Amazon’s Leadership Principles:
- Dive Deep
- Have Backbone; Disagree and Commit
- Strive to be Earth’s Best Employer
- Success and Scale Bring Broad Responsibility
If you missed the previous parts, please click through and read them below:
