Building a Stronger Company: How and Where to Start
With so many urgent needs and so much — often conflicting — advice, how do you know the best path to rapid improvement?
“Whether you are a fan of the company or not, Amazon is the force in commerce, technology and even logistics today. Entire industries are being created, challenged and disrupted by the Seattle behemoth. Their success is unequaled, their reach is unprecedented and their potential is unfathomable. Amazon’s 14 Leadership Principles and the practices that support them stand as a beacon toward which many companies sail.”
Now, I’m going to show you how to start your journey to success.
While this particular list of principles is specific to Amazon, I want to point out that alumni from other very successful companies such as Apple, Microsoft, Google and many more will recognize elements of the list — the values embedded in these principles are not unique to one company.
I frequently reference principles from my time at Apple and Amazon in my current Executive Advisory and Coaching practice. Whether your aim is to assess and improve your individual leadership performance, or if it is to improve your team or company, preparation is (almost) everything. I’m going to cover the two central components of preparing for a successful journey: readiness and pathfinding. I’ll be referencing a few of the Amazon principles by name:
- Customer Obsession
- Invent and Simplify
- Are Right, A Lot
- L*earn and Be Curious
- Hire and Develop the Best
- Insist on the Highest Standards
- Think Big
- Bias for Action
- Earn Trust
- Dive Deep
- Have Backbone; Disagree and Commit
- Deliver Results
Any change creates stress, and too much change too fast can lead to fatigue. It’s a skill that requires exercise to develop, and while conditions will improve for your teams as your organization becomes more effective, you’ll want to have the right foundation in place early both to motivate change and to sustain through the inevitable growing pains.
A good lens for looking at how to engineer change is The Change Formula1:
D × V × F × S > R.
It looks like calculus, but I like this model because it’s actually very simple and draws our attention to the need for: (D) dissatisfaction with the status quo, (V) a shared vision of where we are going, (F) realistic first steps and (S) a means of sustaining the change — and that these, taken together, must outweigh the very natural (R) resistances people will feel to any change.
I encourage you to make a written version of your D, V, F and S. If you are doing this for a team or company, make sure to do it in a collaborative forum — stakeholder buy-in is easiest to achieve when people can see their own hand in the process right from the beginning.
I built the framework I’ll be discussing by analyzing over 300 practices behind the 14 Amazon Leadership Principles to provide my clients guidance on where to look for the biggest gains. While there are some practices that touch all the principles and some that touch very few, the vast majority are somewhere in between. I’ll give a few examples and then share a few insights you can use to get started.
At one end of the spectrum, Amazon leaders are actually rated on their performance at applying each of the principles and are expected to be able to cite examples — it is that central to the culture. Of course, this performance rating practice supports all the principles.
At the other end, each person hired is expected to “raise the bar” on the ability level of the team; this is tied directly to “Hire and Develop the Best” and not very directly to the other principles.
In the middle, we have practices such as collecting and managing near real-time data for metrics and measuring Service Level Agreements. These practices support principles: “Ownership”, “Invent and Simplify”, “Insist on the Highest Standards” and “Dive Deep”.
I’ve made the case before that all the principles are important, and that you cannot and should not ignore some and focus exclusively on others. Still, it is important to choose a small set of principles for your initial improvements. And, when deciding on new practices to adopt, make sure they both leverage your existing strengths and build new strengths in your targeted principles. To help you do that, I’ll start by explaining a counter-intuitive result from my analysis, and then I’ll give you some guidance on where you can find the biggest leverage points.
Counter to Intuition
Even though I built the model on practices and connections I understand very well, the result did show something I initially found surprising: the connection between “Are Right, A Lot” and “Earn Trust” creates the longest sequence of links of any other combination.
It is easy to think of being right as a great way to earn trust. And, it is. But, it is not the only thing that is required. When I first saw this, it didn’t make sense. Once I considered the other principles on the path between these two, it became clear they completed the linkage to earning trust. The full pathway is that leaders:
- Are Right, A Lot;
- Dive Deep;
- Deliver Results;
- have a Bias for Action;
- Learn and are Curious; and
- Earn Trust
While the “Earn Trust” linkage was complex, some of the linkages are very natural. For example, “Customer Obsession” and “Invent and Simplify” are supported by many of the same practices and show up with a direct link in the model.
A Practical Model
As I was evaluating the principles and practices, I wanted to develop a model that would help me both evaluate clients’ existing state and illuminate the most practical pathways for improvement. To do this, I looked at the consequences of stronger and weaker linkages between principles. Upon analysis, each principle ends up with between one and five links to the others with which it shares the most commonalities.
Finding the Greatest Leverage Points
Once your readiness foundation has been built, it is time to take stock of what you already have to work with:
- Which of the principles do you already have the greatest strengths in?
- Which are the biggest challenge?
- Are you really great at “Customer Obsession”, but struggle with “Hire and Develop the Best”?
- Or maybe you are having challenges with “Earn Trust” but have an abundance of “Have Backbone; Disagree and Commit”?
Your first step will be a thorough assessment of how well you are covering each of the principles. There’s even an Amazon practice you can use to help here: “No fence-sitting”. Use a 1-4 rating system, specifically designed to eliminate fence-sitting. There is no way to say “yeah, we’re doing OK” because there is no middle number. Use the numbers this way:
- Not at all, or very little
- Consistently and effectively
- We practically invented it
There should be patterns that appear once you do this. Do the low scores line up with symptoms you can see in your business? For example, do you have a low score on “Customer Obsession” and you are seeing high customer churn rates or low customer satisfaction? Or maybe you’ve got a lower score on “Bias for Action” and you are seeing chronic problems that never seem to get resolved?
- Find the real-world stories unique to your business that connects with your scores, and use them to decide which improvements would bring the biggest business value.
- Find practices that support your target principle and leverage existing strengths.
- Monitor and celebrate progress.
If you don’t yet see a clear pattern or way forward, you can still leverage inherent connections between the principles to your advantage. A few of the principles are more connected than the others, and improvements you make in those areas will have larger positive effects on the other principles and your overall performance. They are:
- Deliver Results – Anything you do to more clearly define the desired results, objectively measure results, and reward achievement of results will necessarily drive gains in other areas
- Invent and Simplify – There are always problems to solve, and complexity kills; building a culture that values and rewards simplifying innovations pays huge dividends
- Customer Obsession – The more you can align your own incentives and perspectives with those of your customers, the better you will serve them
- Dive Deep – details matter, and being able to get into and back out of the details with actionable insights is invaluable
- Learn and be Curious – The ability to try things and not be frozen by the possibility they won’t work is essential to being able to change and innovate fast enough to survive
Putting it Into Practice
It is very important to gain momentum and success early on. Don’t reach too far in your first changes — it is better to be adaptable and pragmatic in your adoption of new practices. Chart a course of achievable improvements leading to your goal.
For example, if you haven’t done much with data-driven decisions and establishing a metrics culture yet, don’t try to jump straight to the best practices in one leap. Instead, plot a course that builds the internal capabilities for ensuring things are measurable, that measurements are being taken, that they are reliable and accessible, and then incorporate them into daily operations, periodic reviews, and planning. Choose a small set of metrics that will be easiest to capture as you are starting. Follow up with a set optimized for business impact.
How to Get Started
Whether you’ve decided to start with one of the five most connected principles, or elsewhere, be bold in your commitment to your new principles, and be adaptable and pragmatic in your adoption of practices.
Start this way:
- Do your readiness homework on your D, V, S, and R — and, do it in collaboration with your team
- Objectively assess your current strengths in the principles — capture real-world examples and counter-examples of current practices to support your assessment
- Select a starting principle to focus on — choose one needing improvement, but where you already have some related strengths, and where strengthening that principle will pay dividends in other areas as well
- Introduce new practices in a way that builds strength over time.
Looking to build a stronger company? Contact me to start breaking down barriers and work towards achieving your goals.
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 The Change Formula was originally created by David Gleicher and promulgated by Beckhard and Harris, though in a different form. This form is due to Kathie Dannemiller with a modification by Steven Cady. The story is told in an interesting short article “The Change Formula: Myth, Legend, or Lore?” by Cady, Jacobs, Koller, and Spalding in OD Practitioner Volume 46, Number 3 (2014) p. 32-39.