Episode 4: Amazon's Culture and a Quiz

Amazon’s Culture Quiz

Please, email your responses to: [email protected].

Question 1: What is one of the four methods which Amazon uses to keep its culture in a Day 1 mode?

Question 2: List your three favorite Leadership Principles?

Question 3: Describe the difference between Consensus Building and Truth Seeking?

Question 4: How would Amazon make a decision if there isn’t sufficient data to make a decision?

Question 5: What Level doesn’t exist in Amazon’s org structure?

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Episode Transcript

If I told you: 'Hey, the sky is blue,' you would normally say: 'Yeah, the sky is blue. the sky has always been blue.' At Amazon, however, if you say that the sky is blue, others will ask you: 'Why is the sky blue?’. Then you should respond with: 'The sky is blue, because the molecules in the air, scatter the blue spectrum of the sunlight more than they scatter the red spectrum.’ Then you will hear another question: 'Why is that?'. And you would have to respond with: 'Because the blue spectrum of the light travels in shorter wavelengths.’ Then, you guessed it, a third follow-up question's going to be: 'Why does it travel in shorter wavelengths?’ on and on, until you reach down to the atomic level of why things are the way they are.

I’m Nick Dimitrov, welcome. You are listening to Episode 4 of the Amazon Bound podcast.

In this episode, we will continue to prepare you to interview well with Amazon. In our last podcast we talked about Amazon’s Business. In this current episode, we will take on Amazon’s Culture.

I am excited to get going, but before I say another word, I should first announce the quiz winners from our last episode. We received 23 (believe it or not) correct responses to the Amazon Business quiz. These responses came from a total of 6 countries, including awesome places like Poland and India, among others. Thank you so much to everyone who took the time to respond – we really appreciate it.

Since we only had 5 free lifetime access passes to “The Essential Package: The Essential Course to Prepare for the Amazon Interview,” to give out, we chose the first five from the 23 total correct responses we received. And here are the lucky winners. In no particular order:

Winner #1 is James from Palo Alto, CA; Winner #2 is Josh from Needham, MA; Winner #3 is Clara, also from Needham, MA – I guess we are big in Needham ; Winner #4 is Nagarajan (I hope I didn’t mispronounce the name,) from Calgary, Canada; and Winner #5 is Adam, from Seattle WA. To these five winners: James, Clara, Josh, Nagarajan, and Adam – you guys should have received an email with the access credentials to the course. Congratulations.

So – that is the story with our first quiz. Moving on - our second brand new quiz will open at the end of this episode. The award for the second quiz will be the ebook: “Nine Proven Do-s and Don’ts for the Amazon interview” That’s an ebook guide which covers 9 tactical recommendations of what to do and what not to do when you interview with Amazon.

Ok – with these housekeeping items out of the way, now, let’s jump into the heart of things. In the previous Episode, we discussed Amazon's business and in this current episode, we'll talk about Amazon's culture. The purpose of this episode, similarly to the previous one, is to continue to give you contextual know-how about Amazon, which, later on, you will use to build your personal portfolio of professional behavioral accomplishments.

OK, now we are finally ready to start. In this episode, we will cover seven different topics dedicated to Amazon’s culture: 1) Amazon’s Day 1 Concept; 2) Amazon’s 14 Leadership Principles; 3) General overview of Amazon’s culture; 4) Amazon’s org structure; 5) Amazon’s unique communication style; 6) Amazon’s reliance on data; and 7) Our second quiz. Let’s get going.

Starting with Topic 1: Amazon’s Day 1 Concept.

It is Always Day 1, at Amazon. Before we start talking about Amazon’s culture, it is useful to explain what Amazon means when it says "Day 1." Day 1 is such an integral part of their culture that it bears spending time with.

Day 1 means that even though Amazon has achieved so much in their life as a company so far, it's still Day 1 on the Internet. The potential of what is to come online still far exceeds the accomplishments that Amazon or any other company has recognized. In one of the recent Amazon all-hands meetings with employees, someone asked Bezos: “Jeff, what happens when Day 1 ends? What does Day 2 look like?"

And the way Bezos answered this employee and later posted in the Amazon’s shareholder letter from that year was very foundational. Here is Bezos’s verbatim response: "Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it's always Day 1.”

That's how Amazon thinks. It's always Day 1. It's not OK to sit on your laurels. It's not OK to be complacent. It's not OK to think that we could relax, since the beginning is now behind us and we're in this steady-state mode of execution. Relaxing, and losing that hunger and drive means that Day 2 has come about and that also means the end of Amazon’s culture as we know it.

Even more importantly, in addition to defining what Day 1 looks like versus Day 2, Bezos also defined what are the four methods Amazon uses to ensure it always stays in a Day 1 mode.

The first method is to stay focused on customers. As I mentioned earlier in one of our previous podcast episodes, other companies are motivated by focusing on competitors. Or focusing on technology. Amazon always stays focused on customers. That is the very foundation and essence of who Amazon is.

The second method is to focus on results, not process. Obviously, you need process. You cannot generate 200+ billion dollars in annual revenue, based on good intentions only. Process is needed but it should never happen at the expense of results. It's never going to be the case of: We do things this way because we've always done them that way. Process is here to service the achievement of results, not the other way around.

Look outside the company, is the third mechanism Amazon uses to ensure it’s always Day 1. It's very important to be aware of the external reality that the company lives in. An example here is Amazon's invention of Amazon Echo and the Alexa voice technology. In 2014, when Amazon launched the Fire Phone, Alexa and Echo did not exist. Fire Phone was a failure by any stretch. However, Fire Phone included as a feature, the very first iteration of the Alexa tech, and later it also gave rise to the Amazon Echo line of products. Because, again, Amazon course corrected, based on what their customers told them they wanted to do. Customers didn’t care about a 3D rendering phone, with four corner cameras. Customers, however, wanted an easier user-interface of communicating with the devices around them. And that's how looking outside the company enabled Amazon to turn a failure which was Fire Phone into a success like Alexa, which has now become one of Amazon core flywheel businesses.

And last but not least, the fourth, and maybe the most important mechanism to ensure that it's always Day 1 is to make quality decisions quickly. There's a number of great companies out there that make very quality decisions but it takes them too long. Amazon is always going to make decisions in the fastest way possible. Amazon calls these decisions both high-quality and high velocity decisions. High-quality alone is not going to cut it, you need the high-velocity factor as well to pair with the high quality.

OK – this concludes Topic 1: Amazon’s Day 1 Concept.

Let’s move on to Topic 2: Amazon’s Fourteen Leadership Principles.

The Leadership Principles are the heart and soul of Amazon. A lot has been written about these principles, and I am not going to spend too long on them here. If you are however to learn one thing and one thing only about Amazon – it’s these 14 Leadership Principles. They are publicly listed on Amazon's website and define everything that happens at the company. They define how Amazon hires talent. They define how Amazon promotes people. They define what projects Amazon invests in, and everything in between. Literally, I strongly encourage you to learn the 14 leadership principles, if you are applying for a job, at Amazon. The first principle at the top of the list of 14 is "Customer Obsession". "Deliver Results" is at the bottom of this list, and together with Customer Obsession the two serve as bookmarks of all the other principles, which are just as important but Customer Obsession and Deliver Results, really are at the very heart of Amazon’s existence.

Very quickly, I'm going to run through the 14 principles to just let you hear them, and again I, encourage you to spend time studying them. Customer Obsession is the first one, then it’s Ownership, Invent and Simplify, Right A Lot, Learn And Be Curious, Hire And Develop The Best, Insist On High Standards, Think Big, Bias For Action, Frugality, Earn Trust, Dive Deep, Have Backbone, and finally Deliver Results.

When Amazon hires you, and you start your first day there, it almost feels like a prank when you walk down the hallways and you hear people talk. They use exactly these leadership principles in discussing product decisions and everything else really. And unlike a lot of other companies, where mission statements and slogans are plastered on the walls, or put on a website and nobody knows them, let alone follows them, at Amazon it is exactly the opposite.

The Leadership Principles are the foundation of the Amazon culture. The micro cultures at the company tend to vary from one team to another, but what doesn't vary is the utmost reliance on Amazon's Leadership Principles in anything that Amazon does. And you will have to prepare for your behavioral Amazon interviews very heavily with these Principles in mind. And really distill the Leadership Principles into your own professional accomplishments, to-date.

OK – this precludes Topic 2: Amazon’s Leadership Principles.

Let’s move on to Topic 3: An overview of Amazon’s Culture.

It's hard to try to synthesize Amazon’s culture in a few minutes, but I’ll attempt to outline some key concepts for you. Amazon is focused on output not input. At Amazon, nobody cares how hard you work. Nobody cares how late you stay. Everybody cares about your results.

It's all about the results, not about optics. It's not about if you wait to leave your desk only after your boss has left for the day. It's not about if you send emails late at night. None of that is important. What matters is the volume and significance of your output. If your output is more significant than say my output, then you are going to get higher rewards and more stock than I would. It’s that simple.

The best Amazonians deliver both short-term and long-term output. Short-term output means quick wins, something you accomplish in a very short amount of time. Get that quick win, make the quick iteration, move forward.

Long-term output, on the other hand, is output, which helps innovate on behalf of customers over the long run. Over years, over multiple quarters. The most successful Amazonians are good at both. Both short-term output and long-term output are equally important.

The final nuance of output, at Amazon, is that you deliver output in a very self-service and very scrappy way. In the example I gave you in one of our earlier episodes, when I was presenting a proposed games strategy to Jeff Bezos, I did not have the luxury of using consultants for that presentation. I did not have the luxury of using a Wall Street Journal subscription or any of those other second-hand research proxies that large companies like to use. Instead, it was up to me to become a subject-matter expert in what I did, I could use any of my prior knowledge as long as it wasn’t confidential and as long as I backed it with data. I could also use any number of other services I could find or think of. It was up to me and my ingenuity and entrepreneurship spirit, to become credible and learn my craft. And not just to become a regular subject matter expert, but understand and own the work so deeply, that I could go to Amazon’s CEO himself and convince him that my way was the right approach.

At Amazon, you are not limited to just presenting a number of recommendations to your senior leadership. In Amazon's culture, you own the decision. You are empowered not just to present the options but to push hard for the recommendation you believe is the best. You have to, of course, illustrate your work and you must use data. You're going to have to be specific. You're going to have to be unbiased. You're going to have to demonstrate why this is an important problem to solve. You are going to have to present all options you’ve considered and then push for the best one, in your view. Why is that option the best? What are the resources you need to accomplish the option? And then, after all of that, you look at that leader in the eye and ask them: "Let's go. Do you have any questions? Is anything unclear? Do you have any edits that you'd like to make? If you don’t - let's go.” It's very different. It's a very different culture from a lot of other places where you would just present options and then defer the decision-making process to someone else.

OK. One last thing about Amazon’s culture I should talk about is that Amazon has a very dog-friendly culture. If you want to work for Amazon and you don't like dogs, you're out of luck. There are a lot of dogs there. If you have a dog, everyone would encourage you to bring your dog to work. If you don't have a dog, tough luck – you’ll start liking dogs.

OK – this finished Topic 3: An overview of Amazon’s culture.

Moving on to Topic 4: Amazon’s org structure.

The organizational structure at Amazon is quite flat. At the bottom of the hierarchy, you have Level 3 and Level 4 employees. The abbreviation is L3 and L4. Those are entry-level folks. Those are workers in fulfillment centers, admins, so on and so forth. Above them are the L5 employees. Those are individual contributors or managers of entry-level people. The L6 employees come next. Those are senior-level individual contributors or managers of more senior people. It's important to mention that L5 and L6 are the two levels in the organization, which represent Amazon’s executional muscle. The L5s and L6s are the employees who make things happen and move the company forward.

Above them are the L7 employees. They are Principals or senior managers of even more senior people. I was a Principal during my Amazon career. The L8 employees are next – they are Directors. Again, even more senior folks, who are managing entire businesses. L8s at Amazon are equivalent to GM or VP title at almost any other company. There's also an interesting nuance to mention here. Amazon is good at two things and bad at two other things. The two things Amazon is good at are: one, Amazon is great at giving you awesome work that is challenging and fun and that's going to grow you. And two Amazon is great at rewarding its employees with stock grants, if you deliver good output.

The two things that Amazon is bad at, are: one - titles. As you can see the titles at the company are not very flashy. And two, Amazon is generally not good at promotions. Promotions are hard to come by, because there are not very many levels to promote people across. Speaking of hard promotions to come by, the next level after the Level 8 Director level is Level 10. That's the VP level. That's where the truly senior Amazon leaders are: people who run large internal organizations and business units. And the interesting point, which you might have noticed already, is that a promotion from a Level 8 to a Level 10 requires a double jump. There is no Level 9, at Amazon. Jumping from a Level 8 to a Level 10 requires a double promotion, because the difference in responsibilities is that significant.

and – finally, at the top of the Amazon organization are the Level 11s - Amazon’s senior VPs and CEOs. There are roughly 20 L11 individuals in total, across the entire company. And really really finally, Jeff Bezos is Level 12, all by himself, at the very top.

So, to summarize Amazon’s org structure, it’s important to understand how little distance there is between the L5 and L6 employees, who are the executional Amazon muscle, and the L8 / L10 employees, who are really the strategic leaders defining the strategy and move the company forward.

Of course, the L11s and L12s are at the very top, but that’s a very small group of people (about 20ish individuals) who determine the very long-term strategy and direction for the company.

OK – this finished Topic 4: Amazon’s organizational structure.

Moving on to Topic 5: Amazon’s unique communication style.

At Amazon, when you want to convince anyone of anything, you write a narrative (an up-to-six-pages-long essay.) In meetings, people spend the first few minutes in complete silence to read these narratives. PowerPoint slides are not allowed, because Amazonians believe that when making an argument, bullet-points are hand-wavy and insufficient. PowerPoint is usually OK when communicating with customers or with the rest of the world. But not OK for internal business.

Words, at Amazon, are so powerful because they are the medium that, in Amazon’s view, can adequately force the healthy conflict required to make high-quality/high-velocity decisions. Amazon encourages healthy conflict and, as such, it draws a clear distinction between what they call Consensus Building and Truth Seeking. For example, Consensus Building means that if I looked at the ceiling now, in the room that I’m in, and then asked you: 'Hey. Look at this ceiling, I think it’s 12 feet high. How high do you think it is?' And then you responded with “No, it looks more like 11-feet high to me.” To which I would then say: ok, let's split the difference. Let's call it 11.5 feet high and be done.’

That is Consensus Building. And that is precisely what Amazon dislikes. Amazon does not reach decisions in that fashion. Instead, Amazon encourages Truth Seeking. Truth Seeking means, that if I said: 'Hey. I think this ceiling is 12 feet high,’ for one of you to say: 'Well, I'm not really sure, Nick' to grab a measuring stick, jump on a table, actually measure the height of the ceiling, then come down and tell me: 'You know what Nick, the ceiling is 11.67 feet high. And that's the truth.’ And you would do so not to make me look bad, or to one-up me. You would do so because you're focused on the truth, and the truth should always trump Consensus Building. That's a very typical Amazon trait.

Let me end the topic of Amazon’s unique communication style with an example from one of the New Hire Orientation sessions I facilitated. During the Orientation, I was telling the new Amazonians how words mattered and how Amazon’s mission statement of being Earth’s most customer centric company illustrated that. And I was encouraging them to challenge how things were done, at Amazon. Then, later in the day, I had moved to a different topic, discussing Amazon’s financials. I was talking about Amazon’s worldwide revenue and was saying how Amazon’s worldwide revenues were such and such billions….when one of the new hires interrupted me with: “If the word ‘world’ is not a clear-enough qualifier in Amazon’s mission statement, why do you use the word ‘worldwide’ when you talk about Amazon’s revenues, instead of the word ‘Earth-wide’?”

I stopped and turned to this new Amazon employee. Then, I asked her to tell everyone what her name was and to stand, so everyone could see her. Then, I gave her a standing ovation. She was 100% right. And Amazon had made a really good hire.

OK – this covers Topic 5: Amazon’s unique communication style.

Moving on to Topic 6: Amazon’s reliance on data.

At Amazon, Data wins all wars. Amazon runs the company entirely based on data. it is the backbone of every decision Amazon makes. Diving deep to collect the data and then analyze the data is a skill that all employees are encouraged to have.

It's not just the Level 5s and Level 6s who are diving deep to do work. It's the VPs who dive and collect data as well. Because, again, diving deep and data gives you the ammo to make any argument. Nobody's going to believe what you say just because you're a VP. They're going to look at your data. They're going to evaluate the facts you use to demonstrate your point. That's why data is revered at Amazon.

What happens though, you might ask, if the product Amazon is working on is so brand new that there's not enough data?

In this case, Amazon would resort to what they call "anecdotes.” They would go out and interview customers. Amazon would literally find out what customers think and observe their behavior. And even if there is not enough data around that, to turn it into a fact, Amazon would use the available anecdotes, build an action plan based on these anecdotes, run a bunch of AB tests, iterate, and move fast. And they would collect those facts in the process.

Sometimes, this excessive reliance on data could become tiring, because once and again it's kind of convenient to have a common-sense foundation that most people would agree with. For instance, if I told you: 'Hey, the sky is blue,' you would normally respond with: 'Yeah, the sky is blue. That makes sense, the sky has always been blue.' At Amazon, however, if you assert that the sky is blue, others will ask you: 'Why is the sky blue?’. And your reply should be: 'The sky is blue, because the molecules in the air, scatter the blue spectrum of the sunlight more than they scatter the red spectrum in the sunlight.’ Then the Amazonians would ask you again: 'Why is that?'. And you would have to respond: 'Well, because the blue spectrum of the light travels in shorter wavelengths.’ Then, you guessed it, a new follow-up question's going to be: 'Why does it travel in shorter wavelengths?’

On and on, Amazon drills down until they reach the very atomic components of why things are the way they are. And then if you connect the dots further, they drill down until they understand super deeply, what would please the customer and what would delight customer.

OK – this covers Topic 6: Amazon’s reliance on data.

Let’s move on to our final Topic, Topic 7: The Amazon Culture Quiz.

We have published the full quiz on our website https://amazonbound.today/podcast, go check it out and please email us your responses to: [email protected]. As usual, I am not going to read the full quiz, on the podcast, but I will give you the first question here“What is one of the four methods which Amazon uses to keep its culture in a Day 1 mode?”

The quiz has a total of five questions. If you’d like, go to the website to find out what they are, email us with your responses, and then, at the beginning of our next episode, we will award the first five of you who emailed us with correct answers, with a free copy of the ebook “Nine Proven Dos and Don’t for the Amazon Interview,” which is a $50 value for you guys. This book will teach you effective ways to answer real Amazon interview questions. Completely for free. We look forward to receiving your responses.

Alright, this covers Topic 7: “The Amazon Culture Quiz.”

And, this also wraps up this episode of our podcast. As always, I hope this has been fun for you.

I am Nick Dimitrov, your host.

Thanks for listening. I’d like to wish everyone of you very Happy Holidays and very Happy New Year. We’ll release our next episode in early January 2019. In the interim, Please, subscribe to our podcast and give us a review, wherever you get your podcasts. See you soon.