System: Goal Setting & Metrics

This is an excerpt from my longer article “Systems: How Product Best Practices Drive Success at Amazon.

Goal-Setting and Metrics

The first of Amazon’s four systems requires every team to establish goals for their product. There are different levels of goals, including S-Team, Director-Level, Group, Team, etc. Every week, during a meeting called the Weekly Business Review (WBR), executives discuss each team’s goal, as well as any key supporting metrics that are significantly up or down against plan. 

The Force Behind the Curtain

From a product management standpoint, I believe it could be argued that the WBR meetings are the secret force behind Amazon’s success. I know Bezos loves to talk about the well-written document that forces proper thinking and articulation of ideas. From a systems standpoint, however, the emphasis on goal status is what keeps people honest and keeps products on track. 

These WBR meetings hold everyone accountable. If you are up or down against your goal, the director or senior managers for your group must have sufficient information about your product to withstand a barrage of questions. Your director must speak to counts and figures, to percentages up or down. They must be prepared to discuss, as well as next steps to double down on a good idea or what measures are being taken to solve a problem. This is social reinforcement at play.

Forecasting is Key

At Amazon, all key goals are meticulously forecasted by your finance partner before the start of the year. You can measure your plan, not just at a monthly level, but at a weekly level. You know you have to be ready for this meeting, which typically takes place every Monday or Tuesday. This level of detail means you are constantly aware of the state of your product’s health.  This is one of the strongest accountability tools I have found in the business world. 

Replication at a Team Level

The team-level versions of these WBR meetings are meant to mimic the executive versions. As a result, PMs learn to be accountable to their own goals and metrics. Storytelling in these meetings must be concise. You must be able to answer questions about any emerging patterns with an executive who, through their tough questions, is trying to teach you how to thrive and survive at Amazon. 

Dashboard or Deck for the WBR Meeting

The Weekly Business Review dashboard is built on an old-school Excel spreadsheet. It contains weekly, monthly, and year-over-year views of your key metrics. At the top, the status of your key goals is front and center. Your finance partner has helped you with weekly forecasts of key metrics. This allows you to speak to weekly and monthly trends relative to projections and understand what really matters, without ballparking for seasonality effects. 

Photo by David Menidrey on Unsplash