Where does innovation come from?
For Amazon – a company recognized for applying technology-enabled innovations to transform customers’ experiences and expectations – it may seem logical to think that technology is the source of innovation. While great tools and technology play their part, innovating consistently is not possible without people. People deliver the organization’s mission, whether that’s maintaining operational excellence, driving growth and expansion, or — as is the case at Amazon — being Earth's most customer-centric company.
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To deliver on Amazon’s mission, our people live by the mantra, “Work hard. Have fun. Make history.” Amazonians come to work every day looking to build things that will make history – bold, audacious, game-changing things like transforming what customers expect in their eCommerce experience through Amazon.com, launching an extraordinary two-day shipping experience, changing the way customers interact with technology in Kindle and Alexa, or launching new industries in Amazon Web Services. We recognize that to make history – to continually innovate in spectacular fashion on behalf of our customers – is incredibly hard work, and so it should also be enjoyable to do.
People strategy
Fostering the type of environment that enables Amazonians to work hard, have fun, and make history takes a lot of effort, but is vital to our success. We deliberately design (and regularly redesign) our people strategy in order to delight our customers and deliver results on their behalf. As part of that, we’ve developed and continue to improve specific mechanisms that operationalize the mindset and behaviors that fuel innovation and growth. These mechanisms include technology, tools, processes and practices across an Amazonian’s lifecycle – from their recruitment and hiring, to their day-to-day experience as an employee, their skills growth and career development, to their performance measurement – and the iterative improvements that improve organizational health over the long term.
Working backwards
By working backwards from our people’s needs, we develop mechanisms that reinforce our core values so that our people can deliver customer-centric innovation consistently, at scale and speed. These mechanisms are effective for Amazon and while they may not be a perfect fit at every company, we’ve found that these methods, and the thinking behind them, can inspire other organizations seeking to strengthen their own approach to managing talent and advancing their own unique missions.
A flywheel for managing talent
Managing talent to best deliver an organization’s goals, meet employees’ shifting expectations, and scale as a business grows can be a challenge for any company. At Amazon, we’ve found that a flywheel can be an effective conceptual model to express how something operates. It’s a simple but powerful way to explain the intrinsic relationship between two areas that mutually reinforce one another – a virtuous cycle that requires a significant amount of force to get moving, but as you keep it turning, it builds enough momentum to continue on its own.
In his 2002 letter to shareholders, Jeff Bezos talked about the flywheel concept for the first time: “One of our most exciting peculiarities is poorly understood. People see that we’re determined to offer both world-leading customer experience and the lowest possible prices, but to some this dual goal seems paradoxical if not downright quixotic. Traditional stores face a time-tested tradeoff between offering high-touch customer experience on the one hand and the lowest possible prices on the other. How can Amazon.com be trying to do both?”
Lower prices, more visits
Bezos goes on to explain that lower prices lead to more customer visits, and more customers increase sales volume and the ability to invest in better customer experience. As the volume of customers grows, more value is realized from existing assets serving a larger customer base so prices can be lowered further, and the process repeats. Feeding any part of the flywheel effectively accelerates the loop. As Bezos said at the time, “We believe our ability to lower prices and simultaneously drive customer experience is a big deal.”
Lower prices, a better customer experience, more traffic, more sellers and greater selection all accelerate the flywheel. In Amazon’s employee experience flywheel, attracting and hiring top talent, providing them with industry-leading work experiences, investing in their growth and development, and constantly evaluating and improving our mechanisms accelerates the wheel (Figure 1). By providing Amazonians an environment and experience where their superpowers are intrinsically linked to delivering the best possible experience for customers, we’re able to deliver on Amazon’s mission while continually iterating and improving our approach to talent.
Employees innovate for customers
"The feedback loop enabled by the flywheel propels the ongoing evolution and improvement of our people operations so that employees can continue to best innovate on behalf of customers."
Key takeaways
People are vital to Amazon’s mission of customer-centric innovation. We deliberately design our talent strategies, working backward from employee needs to develop tools and mechanisms that enable our people to do their best work on behalf of our customers, while continuing to learn and grow. While Amazon’s approaches may not be a perfect fit at every company, they may inspire others seeking to strengthen their approach to managing talent and achieving their unique missions.
Here are some steps and processes to consider:
- Use a conceptual model such as a flywheel to express your employees’ experience and help separate the impact of iterative innovation at each stage of their journey.
- Incorporate mechanisms into the hiring process to help avoid human biases and ensure organizational fit; for example, parceling out important values and attributes for interviewers to look for separately, or using an objective person to validate interview findings and help raise the bar.
- Put the right day-to-day tools, processes, and structures in place to enable your people to be the most productive and effective. At Amazon that means small autonomous teams with single-threaded leaders.
- Explore mechanisms that can foster growth and development of your people. At Amazon, that includes tools such as automated reminders for training and algorithmic evaluation of annual reviews to suggest promotions, and policies that encourage career mobility, upskilling, and reskilling.
- Consider mechanisms to more effectively measure your talent strategies, such as making HR metrics the responsibility of a business unit or team, or novel ways to assess programs and validate that the organization is living up to its values.
- Make the best even better. Keep working backwards from the needs of your people to develop new mechanisms and improve on existing ones in order to continuously improve your employees’ experience.