Amazon's Core Management Ideas and Methods

Enterprise growth is inseparable from organizational support; Ultra-fast business growth needs super organizational support. Through the system description and structural analysis, we will take you to a deeper understanding of Amazon's management system, dig deep into its underlying internal logic for you, and help you to highly refine its top-level design ideas.

What is Amazon management system?

Business model: obsessed with customers and expanding boundaries (module 1)

Talent recruitment: extremely high standards and continuous improvement (module 2)

Data Support: Focus on Causes and Intelligent Management (Module 3)

Innovation Engine: Subversion and Development, Invention and Creation (Module 4)

Decision-making Mechanism: Quality and Speed (Module 5)

Organizational culture: resolutely anti-entropy, always start a business (module 6)

What's the use of knowing Amazon for us?

Whether you are an entrepreneur, founder, company executive, middle manager, workplace white or entrepreneur, it may be enlightening.

Since the establishment of 1994, the growth of Amazon for 25 years is undoubtedly amazing and admirable.

Unlike many companies that only succeed once and then rely on their old businesses, Amazon has achieved innovation and subversion again and again on the basis of its initial business, and achieved breakthroughs and growth again and again.

Starting from books and single-product e-commerce, Amazon has continuously expanded its business boundaries, not only opening up online and offline, but also building a global platform ecosystem. Through infrastructure services, Amazon empowers enterprise customers (2B) from serving individual customers (2C), and has also entered industries with extremely high barriers such as intelligent hardware, intelligent voice, financial services, local services, games, movies, entertainment, and even medical care.

In 20 18, Amazon's total revenue has reached $232.9 billion, equivalent to more than10.6 trillion yuan. The company's market value soared, and it broke through the trillion mark on September 4, 20 18. Although the market value of Amazon has fluctuated since then, it has remained at around $900 billion, making it one of the four companies with the highest market value in the world. The other three companies are Microsoft, Apple and Google.

Even with such a large business volume, Amazon has not slowed down its rapid growth. Its next goal is to earn trillions, because looking at the world, looking at many areas where the customer experience is not perfect, and looking at new areas that have not been invented, its growth space is infinite.

The growth of enterprises can not be separated from the support of organizations. Ultra-fast business growth needs super organizational support. Otherwise, the organization will fall apart and go out of shape during operation.

So what's Amazon's management system like and what's extraordinary about it?

Many enterprises claim that customers are supreme and customer-centered, but the cruel fact is: boss-centered, opponent-centered, or stock price fluctuation-centered. It is said that it depends on the long term, but the pressure of current performance indicators is there. The so-called long-term, mostly two or three years.

When building a business model, Amazon always focuses on the core, insists on obsessing about customers, creates for customers, thinks for a long time, invests in the future, constantly explores new models, and constantly expands business boundaries.

Bezos often reminds everyone that customers are Amazon's most valuable assets; Always be in awe of customers; Amazon should not only meet the requirements of customers for continuous improvement, but also invent and create for customers and surprise them; In the long run, the fundamental criterion for measuring Amazon's success is whether it can create long-term value for shareholders; Investing in the future is more important than the current profit.

The slogan "talent first, people first" is familiar to everyone. However, how many enterprises can define the talent standards and are willing to invest a lot of energy in identifying and employing people, not only with detailed written records, but also with end-to-end continuous tracking and data analysis from recruitment to employment to development?

Amazon has always adhered to extremely high standards of talent recruitment, and created a self-reinforcing talent system through rigorous recruitment process, well-designed self-selection mechanism and unique methods of employing and retaining people, and constantly improved the overall talent level of the organization.

What Amazon wants is a person who is innovative, practical, strong in heart, especially able to carry things, especially resistant to pressure, and has a sense of ownership. When recruiting people, it is necessary to strictly control recruitment and ensure the continuous improvement of recruitment standards.

In Amazon, recruiting people is regarded as the most important decision, because its managers know that the key to the success or failure of an enterprise lies in people. Bezos always said: Your people are your business. No matter how wrong people are, it is useless to remedy them.

Almost all enterprises set performance indicators, do data analysis and have various internal management information systems. However, in many enterprises, the internal information flow is not smooth, often fragmented, hierarchical and very backward, and some problems may take months or even quarters to be exposed.

In the digital age, enterprises should have a new understanding of data because data has become a new core asset.

Amazon is not only committed to building a cross-departmental, cross-level and end-to-end data indicator system, but also puts forward very strict requirements for each data indicator, that is, it must achieve the following five points: extremely meticulous, extremely comprehensive, focusing on reasons, real-time tracking, and verification. Why? Because Amazon believes that when every real cause is fully explored, deeply recognized, strictly tracked, constantly optimized and achieved to the extreme, excellent results will naturally appear.

Amazon has also made full use of digital technology to develop an intelligent management tool system. By strictly tracking, considering and analyzing every reason that affects customer experience and business operation, we can quickly find and solve problems and even automatically complete routine decisions.

Building such a data support system is indeed a systematic project, with huge investment and time-consuming. However, with the passage of time, the accumulation of data and the iteration of the algorithm, it has not only created huge returns, but also increased.

One of the great benefits of the data support system is that Bezos and the entire Amazon executive team can spend little time on daily management, but focus on things two or three years later, creating an innovative engine for Amazon that will never turn off.

Now all enterprises know the importance of innovation, and all enterprises hope to make a breakthrough in innovation. However, despite the attention and input, the result is always so unsatisfactory. The major breakthrough originally expected has gradually turned into a small progress; The bold ideas that I had expected are getting smaller and smaller.

In this regard, Amazon's performance is extremely amazing. They are committed to invention and creation, and are committed to creating an innovation engine that continues to accelerate, subvert and develop. They should not only realize the rapid growth of their own business, but also create a huge new market, such as cloud service (AWS), intelligent speaker (Echo) and intelligent voice platform (Alexa).

In order to persist in invention and creation, they are willing to pay a price that ordinary people are unwilling to pay. They dare to build new capabilities, subvert existing businesses and open up new markets. They are not afraid of failure, keep exploring and are willing to wait. Through unique tools and methods, such as creative tools, news release, full-time small teams, etc. They ensure the continuous generation and fine polishing of ideas, as well as the efficient trial and error of ideas and the landing of experiments.

In Amazon, the phrase "unlimited creativity" has really become a reality.

In today's era, the speed and scope of change are far beyond the past. This means that the times put forward higher requirements for the decision-making ability of enterprises. In the digital age, decision-making must be good and fast, with the emphasis on "fast". Once the key decision is slow, once the market window is missed, even the leading head enterprises will miss an entire era, even again and again.

But in many traditional enterprises, the decision-making quality may be good, but the decision-making speed is too slow. In this regard, I think everyone has a lot of personal experiences, and the depression, anger, suffering and helplessness during the period may be vividly remembered in retrospect.

In terms of decision-making mechanism, Amazon not only pays attention to the quality of decision-making, but also emphasizes the speed of decision-making, which is not only fast but also good. It also forms a set of clear and specific decision-making principles and methods (such as bidding farewell to PPT and rewriting narrative), so that front-line teams can make good decisions according to unified requirements, thus implementing empowerment.

Usually, when an enterprise is founded, it can remain fast and flexible even if its business is not too much and its team size is not too large. However, with the rapid development of business, more and more people, more and more departments, more and more levels, and more and more complex organizations. So-called big company diseases such as complicated process, slow action and rigid organization are also breeding and spreading.

In the process of its growth, Amazon constantly emphasizes that it is always the first day (Day 1), that is, no matter how fast the company develops, how large its scale, how strong its strength and how high its market value are, it should be as fast, flexible and iterative as the first day of its business.

To this end, Amazon resolutely fights against entropy increase, resists formalism, combats complacency, and strives to eliminate bureaucracy; Always adhere to the real obsession with customers, embrace external trends, and constantly improve decision-making speed.

In order to continuously build and strengthen the organizational culture of the "first day", Amazon has completed a clear definition from slogan to specific behavior, designed a landing method from concept to daily work, set an example in every decision, and endowed the organizational culture with special significance through original awards.

When building a business model, Amazon always focuses on the core, insists on obsessing about customers, creates for customers, thinks for a long time, invests in the future, constantly explores new models, and constantly expands business boundaries.

Core points

One of the reasons why Amazon is obsessed with customers is that customers will never be satisfied, that is, customers always expect better choices, lower prices and more convenient services.

Customers are Amazon's most valuable asset. We should always fear our customers and invent for them.

Everything depends on the long-term, and investing in the future is more important than the current profit; Cash flow is more important than net profit.

Amazon has always adhered to extremely high standards of talent recruitment, and created a self-reinforcing talent system through rigorous recruitment process, well-designed self-selection mechanism and unique methods of employing and retaining people, and constantly improved the overall talent level of the organization.

Core points

In Amazon, the most important decision is to recruit people, and it is not bad to miss it. Why? Because your people are your business, people are wrong, no matter how to remedy them.

Three recruitment questions for Bezos: Do you admire this person? Can this person's participation improve the overall efficiency? What is this person outstanding in and what extraordinary achievements have he made?

Talent requires three key words: doer, master and inner strength. Through the gatekeeper system, Amazon adheres to extremely high standards in the recruitment process and ensures continuous improvement.

There are two ways to employ and retain people: to help newcomers accelerate their growth and give veterans new opportunities.

To attract top talents, the top leaders or executives must go out in person.

Amazon is committed to building a cross-departmental, cross-level and end-to-end real-time data indicator system. With the help of digital technologies such as data algorithm, machine learning and artificial intelligence, an intelligent management tool system is developed. By strictly tracking, considering and analyzing every reason that affects customer experience and business operation, it can quickly find problems, solve problems and even automatically complete routine decisions.

Core points

Five requirements of data indicators: extremely fine, extremely complete, focusing on reasons, real-time tracking, verification and verification.

Intelligent management tool system: promote the automation of daily decision-making and release the energy of the organization from daily management.

How to treat input and output: It is indeed a huge system engineering to build a data index system and develop an intelligent management tool system, but with the passage of time, data accumulation and algorithm iteration, it can create more and more returns.

Amazon is committed to invention and creation, and is committed to building an innovation engine that continues to accelerate, subvert and develop, which will not only achieve rapid growth of its own business, but also create a huge new market.

Core points

Correctly understand the five costs of innovation: dare to create new abilities; Dare to subvert the existing business; Dare to explore new markets; Not afraid of failure, continue to explore; Be patient in spite of difficulties.

The way to polish creativity: write a press release, defining the target customers, success criteria and possible difficulties and obstacles.

Promote the realization of creativity: set up a project team, choose a suitable project leader, clarify responsibilities and be responsible for the whole process.

While paying attention to the quality of decision-making, Amazon also emphasizes the speed of decision-making, which is not only fast and good, but also forms a set of clear and specific decision-making principles and methods, so that front-line teams can make decisions according to unified requirements, thus enabling empowerment to be implemented.

Core points

Carefully distinguish between two kinds of decisions: the first major decision, the result of which is significant, vital and irreversible; The second conventional decision-making has little effect, reversible process and flexible adjustment.

Speed up routine decision-making: Digitize intelligent decision-making as much as possible, or designate authorized objects to speed up approval, such as adopting first-level approval and parallel approval.

Major decisions are made quickly and well: we should fully explore the truth, boldly imagine future changes, and oppose harmony without the consent of all; If it is really tangled, I feel that life is too short, and I try to leave as few regrets as possible.

Improve organizational decision-making ability: unify principles (nine management decision-making methods), unify methods (bid farewell to PPT, rewrite narrative), and set an example (adhere to methods and strengthen principles in every decision).

Amazon firmly opposes entropy, and emphasizes that starting a business forever is always the first day, that is, no matter how fast the company develops, how big its scale is, how strong its strength is and how high its market value is, it must be as fast, flexible and iterative as the first day of starting a business.

Core points

Seven preventive measures for the next day: truly infatuate with customers, resist formalism, embrace external trends, speed up decision-making, eliminate complacency, eliminate bureaucracy and redefine responsibilities.

Amazon 14 leadership principle: obsessed with customers; Master spirit; Innovation and simplification; The right decision; Strong thirst for knowledge; Select talents and cultivate talents; Extremely high standards; Have foresight; Advocate action; Diligence and thrift; Win trust; Get to the bottom of it; Dare to make suggestions and obey the overall situation; Achieve performance.

Four steps to establish the first day culture:

1. Clearly define organizational culture (such as customer obsession and extremely high standards) by describing specific behaviors.

2. Focus on daily specific work and carefully design the landing method (such as doing customer service for two days every year). ).

3. In every specific decision, leaders should set an example (such as Bezos' question mark email, etc.). ).

4. In each original award, give the meaning of strengthening culture (such as door panel award, dare to do award, etc.). ).