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Episode 026 – Former Amazon Senior Executive John Rossman

Posted on Dec 1, 2016 by in Podcast Episode | 0 comments



 

Operating as an owner, process v. bureaucracy, veto power in hiring and outlawed PowerPoint!

 

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Bio:

John Rossman is the managing director at business consulting firm Alvarez & Marsal.  Prior to that he spent four years at Amazon, where he launched and scaled the third party selling platform, and also the enterprise services business.

In 2014 John wrote a book reflecting on the lessons learned at Amazon titled The Amazon Way: 14 Leadership Principles Behind the World’s Most Disruptive Company.

Interview:

  1. First things first. You are the father to two teenage boys who play sports. Tell us a little bit about the role you’ve seen sports play in their lives and maybe a life lesson they have learned through sports.
    1. Helped develop passion and discipline
    2. What is the secondary trait that different sports present to you? The underlying emotional/leadership/mental aspect?
  2. We’ll spend the bulk of our time going through your book and the leadership lessons you write about, but if you would take a minute or two to share your journey and how you came to work at Amazon in the first place.
    1. Been in consulting entire career
    2. Efficiency; integrations to help things work across company
    3. Through a connection came on board to help develop Amazon’s third party platform, which is now over 50% of their business
  3. As we get into the book and your time at Amazon, describe the culture of the company from the time you were there, and what makes them a leading company in the world today?
    1. 2002 the company was much different
    2. Bubble had just burst
    3. Amazon was being questioned regarding whether it was viable
    4. They have always been frugal; strategic because they believe you have to invent your way out of tough spots
    5. In 2002, Amazon only sold books, music and video; and Amazon actually sold each of those; so the marketplace allowed it to expand into new categories (sporting goods, musical instruments, etc.), and to do so without having to carry that inventory
    6. Allowed Amazon to expand depth/breadth of what they sold
    7. Every category other than books, music, movies, electronics started as a third party seller
    8. While almost all retail growth is online, only 10-12% of all retail sales is online; so still very early
  4. Let’s get into the book.
    1. First of all why did you write it and how do you think it can help young leaders as they mature and grow in their leadership skills?
      1. Didn’t write it immediately after leaving Amazon
      2. But when applying lessons from Amazon to his consulting clients, a client suggested he put the Amazon lessons in a book
      3. Seven years after leaving Amazon when he wrote the book
      4. Relationship with that client came about from kids on the same baseball team
      5. (Daniel) book allows readers to see practical/concrete ways that leadership skills play out in the real world
    2. The second principle is to “Take Ownership of Results.” You say that leaders at Amazon are “owners.” Can you go into that a bit and specifically talk about how this mentality was encouraged?
      1. Core concept at Amazon
      2. An owner thinks much differently than a renter
    3. Everyone at Amazon has stock in the company to encourage this
      1. Also the results are bigger than your job/department; think of your customer and the overall experience and not just your piece of it
      2. Ownership avoids bureaucracy and finger pointing
      3. So you can make a bigger impact than your own area’s results
    4. In the section on principle three, Invent and Simplify, you talk about the importance of good processes without bureaucracy. How do you go about that?  And why do you say this is key to retain the A players and avoid C and D players?
      1. In most companies, people confuse bureaucracy with process, when actually process prevents bureaucracy
      2. Creates accountability
      3. Sometimes we hide bureaucracy by calling it process
      4. The best performers want to be in a place where they can get things done and make a difference, without having to fight against the bureaucracy machine, while B/C players like to hide behind it.
      5. So As will leave and B/Cs will stay.
    5. Can you talk about the process you went through to get hired at Amazon and why you believe it is that way? I think people would be amazed at the number and intensity of the hiring/interview process.
      1. Focus on fungible skills; the best athlete mentality
      2. Special role called a bar raiser – they aren’t part of the hiring team; is the candidate going to help raise the bar? The bar raiser has complete veto power over the hire with no questions asked
      3. All the interviews are based off of these leadership principles: customer obsession; using data to drive results; collaborate well
      4. Tons of time invested into hiring process; John was interviewed 23 times before being hired
      5. (Daniel) advice on how to implement? Get your definitions clears; what are you looking for? How are you evaluating talent? Don’t compromise! Especially not based on speed. Have thoughtful interviewing approaches.
        1. Past behavior based interviewing is the best way to identify what candidates are capable of in the future
        2. No softball interviews!
      6. My impression of the Amazon culture after reading your book is one of extreme pressure and intensity, but not to the point that it repelled good people or stifled their innovation. Is that a fair categorization?  If so, how does this work?
        1. It is a high intensity, high expectations, high performing environment
        2. Retains and grows great talent
        3. Most high performing teams have the same type of culture
        4. Starts with talent selection, but goes throughout the entire cycle of the employee
        5. Allows you to get big things done without a lot of overhead/bureaucracy
      7. I was struck by the no Powerpoint rule when presenting ideas, and also the future press release technique. Can you talk about those?
        1. Writing a narrative v. building a powerpoint is trying to get clarity and being specific about what is being proposed
        2. Ambiguity is always on the edge, so specifics matter
        3. Must get clarity and scale it across more people, so the knowledge isn’t just with one person
        4. Narratives are either 2 or 6 pages in nature, and instead of a Powerpoint, you have to write it out; audience must “get it”
        5. Future press release makes you put yourself in the customer’s shoes about whey they love the product; also what were the challenges that were overcome in order to achieve the result
        6. (Daniel) Talking about the mistaken use of Powerpoint as the primary (or only) communication method rather than just a tool to efficiently share a more thought out set of ideas (the narrative)
        7. Powerpoint in some ways has dumbed down the content
      8. Why are real-time metrics far superior to traditional weekly/monthly/quarterly/annual metrics?
        1. You can do things with real-time data you can never do with batch data, like real-time adjustments
      9. You mention a quote from former NFL head coach Bill Parcells, “Blame Nobody. Expect Nothing. Do Something.” and conclude he would make an excellent leader at Amazon. Why?
        1. Because it’s the no victim mentality, and that we are here to solve problems. I am an owner and I need to solve the problem, regardless of who created the problem.
        2. There is no “no.” Figure out a way to get to “yes,” and to come to a solution
        3. (Daniel) Referring to Second City/Improv “Yes, and” games/training
      10. How do we make simple things hard? How can we avoid it? And why is that important?
        1. Human/Corporate nature that because we all want to get along/be polite, sometimes we let simple things become hard
        2. It takes wisdom to know what should be hard, and call something that is hard but should be simple for what it is
      11. The ninth principle is to “Earn the trust of others.” You borrow from Michael Hyatt a set of six keys to earning trust. Talk about one of two of those you feel are most important for us to know.
        1. Be self-critical – willing to lead with where you failed/fell short, and always followed up with how you’re going to fix that
        2. Sets a tone of humility/learning
        3. Allows others to be vulnerable as well
        4. Blue Angels debrief sessions (“Safeties”) – takes longer than the show; pilots share what their safeties were, which then allows others to chime in
        5. People do a good job of planning and execution, but do a terrible job of debrief
        6. (Daniel) important to do it very soon after the project/event
      12. The thirteenth principle, “Have Backbone,” I think can be a challenge for many of us who don’t want to cause problems or rock the boat. Can you dispel us of that tendency?
        1. About having (business) courage – knowing the right thing and being committed to doing it
        2. Even if it’s a risk
        3. Jeff Bezos – create an environment where we resist social cohesion
      13. Is there anything from the book we haven’t covered you want to mention before we wrap up?
        1. The principles aren’t in any order
        2. The first one is about leadership obsession – where you always put the customer/organization first and work back from that
        3. The last one is deliver results – leaders must do this regardless of circumstances
        4. Those are the bookends
    6. Where can people go to learn more about you and where can they pick up the book?
      1. The Amazon Way (book)
      2. John’s new book – The Amazon Way on IoT
      3. The-Amazon-Way.com – John’s blog focused on disruption
      4. John is not in the Beta test group for Drone Delivery! Too bad!

Thank Yous/Acknowledgements:

  1. Antioch Live/Clear Day Media Groupmusic
    1. More here.
  2. Jonathan Davis – production
  3. Clint Musslewhite voice over

 

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