Council Post: The Three Mindsets That Drive Amazon’s Success May Surprise You

Andrea K Leigh is the Strategy Lead at Ideoclick. A 10 year former Amazon veteran, she is an avid eCommerce enthusiast, writer, and speaker.

In January, Slate published “The Evil List” — a list of the most evil companies in the world — and Amazon, my former employer, made No. 1 on the list. As a culture, we love to vilify big companies. We hate on Facebook for selling our data. Walmart put mom and pop shops out of business. And Uber has a toxic corporate culture. 

With the pandemic, perhaps consumers are feeling a bit gentler about Amazon. Evil or not, we keep on shopping and apparently we feel more intimacy with Amazon than Disney.

We don’t have a replacement for Amazon. Truth be told, I’m not sure we want one. However, whatever your opinion of Amazon, it’s considered a trillion-dollar company. It’s hard to deny that they’ve built incredible value.

Before Covid-19 hit, I spent several days at Harvard Business School with a group of consumer packaged goods leaders exploring the future of commerce. These leaders shared their concerns about meeting the demands of the future. Do they have the right culture? Do they have the right skills? If not, how do they get them? 

After spending 10 years in Amazon’s retail division, and now five years on the outside working with hundreds of large corporations, I’ve come to realize that Amazon possesses several unique mindsets that are imperative to their success. As you read about the three mindsets below, I encourage you to examine your organization. Where are you already embodying these principles, and what can you try today?

1. Innovate — or else.

“I think frugality drives innovation, just like other constraints do. One of the only ways to get out of a tight box is to invent your way out.” —Jeff Bezos, founder and CEO of Amazon

At Amazon, even worse than being fired was the fear of being ordinary. Employees were frequently given a project to accomplish with very few resources to do it. They are rewarded for trying and innovating. They are punished, or reprimanded, for keeping up the status quo. This mindset is supported in everything from hiring to performance management.

Building an innovative culture starts with hiring. Inventors like to invent, and most companies don’t create the infrastructure to let them. Therefore, a candidate who seemed frustrated with the pace of their current company was often seen as an excellent candidate. Innovation was also mandated in performance management. As I’ve written previously, inaction was generally regarded as poor performance. No rewards were given for tenure. Holding a position for a long period of time wasn’t always considered a good thing, as it indicated potential complacency.

How are you encouraging team members to break out of the status quo? How are you not only learning from failure but rewarding it?

2. Fail fast.

“If the size of your failures isn’t growing, you’re not going to be inventing at a size that can actually move the needle.” —Jeff Bezos

Amazon doesn’t need to know now what it’s going to be in the future. Business requirements are lightweight and highly editable. Ideas start by someone saying, “I wonder what would happen if…” or “I want to learn how customers behave when…” versus having the whole end experience mapped out. This allows Amazon to develop a rapid innovation cycle. 

Amazon also doesn’t spend years on bad ideas. If you’re going to fail, fail fast, learn and get back up. They’re quick to pull the plug when it’s not working. Remember Auctions? Endless.com and Myhabit? The Fire Phone? Those are just the big ones that made the news.

What happens to employees after these failures? Other teams hungrily scoop them up for the next innovative project. It was exciting to have worked on a failure — think of what you helped Amazon learn! You were a celebrity.

How are you making your failures famous internally in a good way?

3. Focus on the inputs.

“We don’t celebrate a 10% increase in the stock price like we celebrate excellent customer experience. We aren’t 10% smarter when that happens and conversely aren’t 10% dumber when the stock goes the other way.” —Jeff Bezos

Inputs are controllable things we put into the machine that is our business. Amazon spends thoughtful cycles identifying their business inputs and setting up mechanisms to measure teams against them. Outputs are the less controllable results that come out the other side.

In a basic retail setting, for example, the inputs would be having a good assortment of products that customers want, having strong customer service and a best-in-class shopping experience, running the store efficiently and having products in stock and priced correctly. The outputs would be sales, profits and competitor activity.

If you are measuring and encouraging the correct inputs, the outputs will usually follow accordingly. However, most companies we work with do the reverse: placing an extraordinary emphasis on outputs without having defined inputs at all.

What inputs make sense for your business? How can you measure them and hold people accountable for them?How will you know when you need to change them? 

We don’t all need or want to be just like Amazon. However, incorporating the mindsets that support innovation, learning from failures and having a rigorous inputs focus can help your organization prepare for future success.

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