Priorities: The Magic of Amazon’s Culture of Accountability
After leaving Amazon, I found myself constantly trying to recreate things I missed. I set S.M.A.R.T. goals. I wrote dense, 6-page documents. I held weekly metrics meetings. When the tools didn’t work as expected, I found myself reflecting on why I so desperately wanted to recreate them and why my attempts to leverage them sometimes failed outside Amazon.
I concluded: Clear priorities from leadership are key to creating a culture of accountability. I eventually realized priorities, systems and habits help keep the flywheel of innovation moving. But without strong priorities from above, the impact of those systems and habits falls short.
Key Takeaways
Clear principles permeate the culture and reinforce priorities
Goal setting is universal, the most outward manifestation of priorities
Meetings and documents socially reinforce priorities
Financial accountability ensures priorities are met
In this article, I focus on priorities. If you want to learn more about Amazon’s systems and habits, please check out these supporting articles (coming soon):
Shoutout: NLI’s Growth Mindset Approach
Thanks to the NeuroLeadership Institute (NLI), I was better able to connect the dots on why I strive to build systems to support communication, measurement and strategic planning habits within my teams. After seeing Amazon through NLI’s Priorities, Habits and Systems (PHS) framework, it all became clear. I know it is a bit buzzy, but Amazon really does create a growth mindset.
From the 14 Leadership Principles to the product measurement strategies and all those now famous documents, Amazon creates a growth mindset that is reinforced by priorities set from above and practiced from within. The habits and systems make it second nature.
1. Principles Permeate the Culture
Customer Obsession is everywhere and settles almost any dispute at Amazon.
When you enter Amazon as a product manager, you don’t get weeks of formal training. The system is configured to encourage you to figure it out on your own, like everyone did before you. You drive to a decision by asking, is this right for the customer? Am I showing a bias for action? You learn by doing, by making mistakes and eventually finding success.
The culture of customer obsession creates clear priorities. Goals from Jeff Bezos’ leadership team down to the individual are focused on what is right for the customer. No one in Amazon need ask; everyone knows the answer always boils down to: “What is best for the customer?” Every FAQ document starts with “How does this benefit the customer?”
When I was inside Amazon, I felt many of those around me followed the rules because “this is how we do things.” It was only after I left, and tried to revive the Amazonian processes I missed, that I truly appreciated to what extent priorities (supported by those leadership principles) gave me the freedom to grow and think for myself. What appeared to be blind rule-following was actually a system fostering freedom and ownership.
I have heard more than a few conversations about how children of Amazon engineers and product leaders are taught to live the leadership principles. People will boast that they raise their children to “set a high bar.” One friend’s 11-year old daughter set a series of nearly impossible goals for her favorite sport, and my first reaction was, nearly 3 years after leaving Amazon, “Jeff would be proud.” She is “insisting on high standards” and very likely to “deliver results.”
When you interview at Amazon, you are rated on the leadership principles. For your annual review, you are graded on meeting the standards set by the principles. When you give feedback, you do so in terms of the principles. It very quickly becomes second nature. You can win arguments by adhering to the principles.
2. Goal Setting is Universal
Everyone sets goals. Everyone owns goals. Leaders are watching and engaged.
Amazon is fairly well known for its goal setting. Any ex-Amazon PM can tell you how to write a S.M.A.R.T. goal (Specific, Measurable, Attainable, Relevant and Time-Bound). That is because from Day 1 their manager tells them what the existing goals are and asks them to (1) set their own personal S.M.A.R.T. goals and (2) help the team establish S.M.A.R.T. goals for the coming year.
But it goes a step further. Every goal has to fall within the overarching principle of customer obsession. I was witness to countless debates about how decisions to help a particular product or advance a new initiative did or didn’t support the ultimate goal of doing what is right for the Customer.
3. Social Reinforcement of Priorities
Meetings and documents are social mechanisms — you care what people think and say. There is serious FOMO.
I now realize how strongly my actions at Amazon were influenced by social reinforcement. The metrics you monitor, the goals you set, the documents you write and the plans you set are posted for all to see.
I have identified four systems at Amazon that help product teams form habits through social reinforcement. They are:
1. Metrics Reviews
2. Communication Best Practices
3. Strategic Planning
4. Financial Planning (a.k.a. The Funding Model)
What makes these systems work is a culture of accountability. There are meeting standards for both quality of writing and quality of response. You can’t go into a meeting unprepared or present a document that is incomplete. You don’t want to get called out at a meeting because you didn’t prepare, or you don’t know your metrics.
You always need to understand your strategic plan. Oft repeated questions include: “What would you say if you had 1 minute in the elevator with Jeff?” or “What would you do if I gave your product one more engineer?” You can’t get enough support for your product if you can’t explain how it will drive revenue and solve a customer need. You always need to be able to answer: “Why are we funding this effort?”
And every week, the meetings and documents function as social reinforcements of the goals and motivations. Knowing you need to be present and on your game at meetings, when others read your documents, socially reinforces the priorities.
Yes, I followed the rules because I was told to, but in the process, I developed habits that made me a stronger product manager, even when the systems were gone. Is there a higher compliment to the strength of Amazon’s value system?
4. Financial Accountability
At Amazon, PMs are lucky because they have a finance expert who helps them build projections to ensure goals are grounded in assumptions that can be modeled.
You don’t get the headcount to execute on your plan unless you make a strong case and project a return on investment (ROI). If your financial model is not sound and stretchy enough, you will have a hard time getting or maintaining headcount.
Until I started working closely with a CFO and a director of FP&A (financial planning and analysis) at another product-focused company, I never realized how lucky I was at Amazon. PMs regularly work with someone from the finance team to model their revenue projections in order to measure product success. (Those finance folks can make spreadsheets dance, it is a beautiful thing to watch.)
Finance experts take your assumptions about the product development process and help you convert that into revenue projections at a weekly, monthly, and annual rate. In meeting their needs, you learn to calculate most of it proactively. You get into the habit of knowing what engineering efforts will lead to a healthy ROI.
In a world where priorities are set around revenue, being able to take inputs and assumed outputs on technical products and link it back to revenue is crucial.
It’s How the Magic Happens
Priorities are key to creating a culture of accountability. They start at the top. They permeate the culture as everyone lives them. And everyone feels empowered to “Think Big” because no one has to worry, everyone knows the rules. This is fertile ground for healthy product management habits to form.
The rules of the road give everyone the systems they need and help everyone build the habits that enable those priorities to be met in a timely manner. That is the magic, how the seemingly impossible becomes possible on a regular basis.
When everyone understands clear priorities, they can take ownership to solve the problem. And that creates the growth mindset so many seek. It also creates an unbelievable amount of trust in your teammates.
Organizations can create and foster a growth mindset by setting the right priorities and systems in place to develop habits similar to those formed over the years at Amazon.
