Interview: “Hire builders and let them build”

PwC Germany: Do we need to think about a “digital corporate culture” and if so, what does this mean for AWS?

Daniel Slater (AWS): At AWS, we do not think of corporate culture in terms of whether it is digital or not. Digital technology helps enable innovation, and what we think about is: “How do we build and maintain a corporate culture that fosters innovation all the way to its edges?”

At AWS, our culture encourages us to make frequent, constant small bets focused primarily on solving a customer problem. We aim not just to invent for the sake of invention, but to create lasting and durable solutions for customers. How you obsess constantly over creating better experiences for your customers helps you build trust, and build durable lines of business, products, and services. It is that imperative of solving customer needs that helps you build resilience in your business and weather unpredictable external trends. And by focusing on constant experimentation, you drive ongoing efficiency and scale. This is how the right type of innovative culture can help you drive your business.

Feras Alsamawi (AWS): To me, the following characteristics become increasingly important in the digital context: Being close to customers, being nimble and fast in the ways that you react to changing customer needs to meet increasing customer expectations.

Why is it so important to have these characteristics in place? Because you have channels through which you can deliver faster and shorten innovation cycles. You will always face increasing customer expectations. More than ever, customers that are consuming digital products and services are asking for better products and features in shorter cycles. Therefore, being close to customers, being able to innovate and stay on top of their needs, and remaining agile are becoming even more important characteristics in the digital context.

PwC Germany: So being digital is part of AWS’ corporate culture?

Slater (AWS): The defining characteristics of driving a performing culture are to start with your customers, to experiment constantly and to iterate ceaselessly on their behalf.

Alsamawi (AWS): We differentiate between Day 1 and Day 2 culture. From our perspective, you can observe the ideal culture in organizations that preserved a lot of the mindset they had when being established. We call that Day 1, where people are close to the customer problems, and show a lot of ownership and a lot of bias for action. We put a lot of effort into maintaining that cultural nucleus that we call Day 1 as we grow and scale over time.

Slater (AWS): To add upon this, we want to remain nimble and agile and boldly experimental. That is all part of that Day 1 culture and helps us drive decentralized innovation to every employee.

We also create consistent mechanisms. That is the second big piece of driving that Day 1 culture: complete, closed loop processes that serve to help your Builders innovate and experiment. You need a robust technical toolset that allows you to go from idea to experimentation in record time. And I think this is where the digital nature really comes into play. 

But you also have to capture what works and what doesn't, constantly iterating, and organizing your teams in a way that allows them to optimize for innovation.

PwC Germany: How do you define Day 2 culture?

Alsamawi (AWS): Day 2 culture is one that does not put the customer in the center of everything. It starts to put proxies in the middle of it, focusing on internal goals instead of caring about the customers; slow decision-making, not allowing risk taking. It would be waiting for others to fail, rather than taking bets. We believe that every company will reach that Day 2 status at some point. The question is: How much can you push it into the future?

PwC Germany: Do you think that AWS has at one point already reached the Day 2 culture?

Slater (AWS): We guard zealously every day about what part of us is moving into Day 2: Where is decision-making slowing down? Where are we becoming less agile? Where is the danger of us moving further from the customer? In addition to building mechanisms that help you inspect your business and iterate, you must do the same thing with your culture. You must inspect it every day. I think that is what the primary role of a leader is: You must constantly innovate, move forward, and expand what you do, but it’s also crucial to constantly review your processes. Pay attention to where you’re deviating from your original intent, re-balance, and correct your course constantly.

PwC Germany: Could you share examples on how AWS manages to establish and live a digital culture?

Slater (AWS): The tools and permission to innovate are very decentralized. We democratize the tools and the framework to innovate. That way you are getting the breadth of your entire organization thinking and aligning around innovation. It also helps to reduce risks in a lot of ways. You are failing or scaling quickly. This drives more frequent value creation, and you can reinvest those savings into future innovation as you go.

Alsamawi (AWS): There is a set of principles that shape the cultural DNA of our company – we call them Leadership Principles. When we talk about leadership or leaders, we mean everyone at AWS. With the Leadership Principles, we have captured some of the mental models and behavioral patterns that have existed since the early days of Amazon. And we make sure that we adhere to them. We actively maintain them.

The way that Leadership Principles unfold is multidimensional. We see them as a our cultural DNA, we review them to review our performance – next to customer-centric metrics – and a way to guide our decision-making. When we hire people, we make sure that they are not just a functional fit, but they also show traits that align to the Leadership Principles.

PwC Germany: Do you have examples from everyday work life about how you enable everyone to participate in innovation?

Alsamawi (AWS): One of the tools that we give people at hand is writing narratives. At Amazon, we have a culture strongly shaped by creating and writing narratives to bring forward ideas and contribute to the overall journey of our company. These ideas can be about new product features or new products and services that we want to launch. We typically write them in a format that looks like a fictitious press release, or they can be around developing an organization and looking 1, 2 or 3 years into the future. Everyone is empowered to participate. One of the things that you do when you onboard as a new Builder is to learn to read and write in a way that encourages bringing forward your ideas.

We use narratives as tools for truth seeking: We dive into these documents, discuss them and look into the data. Sometimes, we have controversial conversations around what we observe and what we are about to decide. A lot of this approach is shaped by the Leadership Principle “Have Backbone”, “Disagree and Commit” and reflected in the way we use these narratives to plan mid- and long-term direction and decide on what products or services are best to launch to suit our customers’ needs.

The Leadership Principles are probably the best example of how culture materializes this. Everyone is a leader on the same mission, and the Leadership Principles empower everyone to act along these lines.

Alsamawi (AWS): Leadership Principles are there to help us refine our thinking. They are not just high-level words. They are not policies on the other end of that spectrum. We do not tell people exactly what to do for every situation. We are operating in ambiguous environments, and it is impossible to create policies that will tell you exactly what to do. This would kill innovation.

Slater (AWS):

PwC Germany: What do you see as common characteristics across top innovators? What does AWS practice on a day-to-day basis?

Slater (AWS): What we are inspired by top innovators, and what we try to do ourselves every day, is to unlock the potential of everyone in the organization, democratize the ability to bring new ideas to the table, and create an environment where Builders can freely experiment and learn. Leaders themselves need to inspire with a bold vision and empower their entire organization with the ability to make high-quality and high velocity decisions.

Experimentation and innovation are never perfect. It can be very messy and nonlinear, and you are going to fail if you are truly experimenting and building the permission to focus on a customer’s long-term durable needs, and then capture what works in scale. That helps your bets become sharper and your innovations become effective at scale. 

Alsamawi (AWS): I just want to double down on the people aspect here. A lot of effort is invested by companies to find and hire the right talent. And we like to think about it as not wasting that effort. By getting people on board and empowering them to make the most out of their talent, you hire Builders and you let them build. This is a crucial concept. I do not think we own the wisdom on this entirely or we have a monopoly on this. It is quite the opposite. This is an ongoing conversation, and we like to get in touch with our AWS customers to learn from each other. We have talented people, and need to nurture that approach to create better outcomes.