How is hand-held training related to Amazon’s internal standards and how has it impacted the company's worldview?
Jeff Bezos, Amazon CEO, writes a letter to shareholders every year, and RUSSOL startup school volunteers translate them to answer these questions, inspire readers to create their Amazon. We read the translation of the letter to shareholders published by Bezos 20 years later. It's big
Jeff Bezos, CEO of Amazon, at the opening of Spheres. Photo Source: heraldnet.com
Jeff Bezos, April 18, 2018
To our shareholders
The American Consumer Satisfaction Index recently announced the results of its annual survey, and in it, for the eighth consecutive year, consumers ranked Amazon first. In the UK there is a similar index, the UK Customer Satisfaction Index, which is published by the Institute for Consumer Services. For the fifth consecutive time, Amazon UK comes first in this study. LinkedIn also recently placed Amazon in first place in the list of the best companies of 2018. This list ranks the companies in which specialists in the States would like to work the most. And just a few weeks ago, Harris Poll published its annual reputation rating (Reputation Quotient), for the compilation of which more than 25 thousand consumers are interviewed on a wide range of topics, ranging from the work environment to social responsibility and goods and services. For the third consecutive year, Amazon has come first on this list.
I congratulate and thank the 560 thousand Amazons who come to work every day and show an unrelenting obsession with their clients and a commitment to excellence in everything related to their work. And on behalf of the Amazons of all countries, I express my deep gratitude to our customers. We are incredibly inspired by your ratings in these polls.
What I love most about our customers is that they are amazingly demanding. Their expectations never stand still, they always grow. This is human nature. If we were happy with everything, we would still be engaged in hunting and gathering. People’s appetite for a better life is never saturated, and what looked like “wow” yesterday is quite common today. I observe that today this path from “wow” to “the way it should be” has become shorter than ever before. Perhaps this is happening because access to information has become easier. In a few seconds and a couple of touches on the phone screen, consumers can read reviews, compare prices of many retailers, see what is available, find out how quickly it will be sent or where to pick it up, and much more. I give examples from the retail sector, but I observe that a similar strengthening of consumer power is everywhere in all areas of the business where Amazon works, and in other industries too. In this world you cannot rest on your laurels. Clients have no laurels for you.
How to stay ahead of ever-growing user expectations? The only true way does not exist - it is always a combination of many factors. But the high standards of attitude to work used in your company at every step and in all details is, of course, an essential part. Over the years, we have had some success in our efforts to meet the high expectations of consumers. We also had certain failures along the way, which cost us billions of dollars. Given both of these, I would like to share with you the most important thing that we have been able to still learn and understand about the high standards of attitude towards working within the company.
Firstly, there is the most important question: is the pursuit of excellence something inherent in a person from the beginning or can this be taught? If you challenge me to your basketball team, you can teach me a lot, but you cannot teach me how to grow taller. Should we, from the very beginning and first of all, select people who already have a desire for excellence in work? If so, then my letter to you should mainly be devoted to hiring techniques, but I think differently. I am sure that the pursuit of excellence can be taught. In life in general, people well adopt high standards when they are in sight and everything around them is transparent. The pursuit of excellence is contagious. Put the newcomer in a team that is in trouble, and he will quickly take this approach. The converse is also true. If indifference prevails, it will quickly spread everywhere. And although transparency in the company, when everything is in plain sight, works well when teaching high standards of attitude to one’s work, this process can be accelerated by formulating several basic principles that I hope to convey to you in this letter.
Another important question is whether the pursuit of excellence is a universal principle or whether they depend on the application. In other words, if you have a responsible attitude in one area, will it be the same in another field? I am convinced that the pursuit of excellence always has an adjustment for the place, and you will have to learn the right approach separately for each area of your interests. When I created Amazon, I strove for excellence in terms of invention, customer care, and (fortunately) in terms of hiring staff. But I didn’t have a high standard regarding everyday work processes: how to keep control of the problems once solved, how to get rid of flaws while they are in the bud, how to check work processes and much more. I had to learn and develop high standards in these areas, and my colleagues were my mentors.
It is important to understand this position, because thanks to it you remain humble, do not lose your sense of reality. You can consider yourself a person as a whole responsible and having high standards, but you will still have dangerous “blind spots”. These can be entire areas of business where you do not even notice that your requirements are too low or simply absent, and certainly far from the world level. It is critical to be prepared to admit that there is such a probability, and it is not equal to zero.
What do you need to set high standards in a certain field? Firstly, you should be able to find out and determine what is really included in the concept of “good” for this area, which is a guideline in it. Secondly, you must have realistic estimates of how difficult it is to reach such a landmark, how much work you need to do to reach it - and this is your distance.
Let me give you two examples. One is a bit of a funny illustration that denotes the subject well, and the second is from real life, from a situation that arises with some regularity at Amazon.
Photo source: Karolina Gaewska
One of my close friends recently decided to learn how to make an ideal handstand without leaning against anything. Without leaning on the wall. Not so much for a few seconds, but to be suitable for Instagram. She decided to start her journey by enrolling in a master class in her yoga studio, which she attended. Then she practiced for some time, but did not achieve the desired result. Then she hired a handstand coach. Yes, I understand what you just thought, but believe me, this is a real person. In the very first lesson, this coach gave her amazing advice. “Most people,” he said, “think that if they work hard, they can make an ideal handstand for about two weeks. But the truth is that it takes about six months of daily exercise. If you think that you should be able to do it in two weeks, then then you will drop it more than your expectations. ” Unrealistic estimates of distance - often implicit or unspoken - they kill high standards. To achieve a high standard yourself or as a team, you need to form and actively convey, realize a realistic assessment of how much you have to plow. And this coach understands such things very well.
At Amazon, we do not make presentations in PowerPoint or other slide-oriented programs. Instead, we write six-page memos structured as narrative, as narrative. We read them silently at the beginning of each meeting, which are held in a kind of training room. Of course, the quality of these services can vary greatly. Some of them have such crystal clarity that angels singing is heard. They are brilliant, thoughtful and set the tone for a high-quality discussion. Sometimes, of course, there are notes from the other end of the spectrum.
In the example of a handstand, the criterion of a high standard is easy to recognize and define. It is easy to describe in detail all the requirements for a well-executed handstand, and in the end, you will either do it or not. The example of how people write is very different. The difference between a magnificent memo and a mediocre one is much more blurry. It would be extremely difficult to describe the detailed requirements for creating a great service. However, I observe most of the time that readers react to a well-written document in a similar way. They distinguish their quality in reading, in fact. So a high standard exists, it is real, even if it is not easy to describe.
And this is what we came to as a result. Even if the memo is not very good, it’s not the inability of its author to realize the high standard, but quite another - in erroneous expectations about the distance. They believe in vain that an excellent six-page service can be written in a day or two or even in a few hours, although in fact it takes a week or more! As if they are trying to do a handstand in two weeks, and we are not training them the way we need. Magnificent memos are written and corresponded, discussed with colleagues who are asked to improve the text, then they are put off for a couple of days, and then again reinstated. All of this is simply impossible to do in a day or two. The most important consideration is that you can improve the result by simply increasing the training period, conveying to them the fact that a great memo should take them a week or more.
In addition to determining the bar for yourself and have a realistic assessment of the distance, the question arises - what about skills? Of course, in order to write a document at the global level, you need to be highly skilled in writing. So skills and abilities is another required element? In my opinion, not so much. At least, it is not so critical for one employee who works in a team. A football coach does not have to be able to hit a penalty, and a director does not have to be able to play any role in front of the camera. But both of them should be able to determine the quality of execution for these things and teach a realistic perception of the amount of labor that will have to be spent to achieve them. Even if we talk about a six-page memo, this is a collective work. Someone in the team must have the necessary skills, but it does not have to be just you. (I note that traditionally in Amazon, the names of the authors are never mentioned in the memo - it is submitted by the whole team).
Building a company culture of commitment to excellence is worth the effort and gives a lot of advantages. It is obvious and natural that you will create the best products or services for your customers, and this reason alone would be enough! Perhaps a little less obvious that people accustomed to the pursuit of excellence will help you in hiring better staff and retaining customers. And an even more subtle thing: the culture of striving for excellence hides all the “invisible”, but extremely important work that is done every day in the company. I am talking about work that no one sees. This work is done there when there is no one to watch it. In a culture of high standards, the good performance of such work is a reward in itself, part of what is included in the concept of professionalism.
Well, and, after all, the pursuit of excellence is fun. After you try out how to strive to work to high standards, you will no longer have a return trip.
So, there are four elements in the quest for excellence, as we see it now: it can be taught, it depends on the field of application, you must set a benchmark, you must clearly teach to see the realistic distance that you must go to achieve a benchmark. For us, it worked at all levels - from the most general to the smallest. Starting from the compilation of memos up to created from scratch projects of new business areas. We hope that this approach will help you.
The high standards that our leaders adhere to have helped us a lot. And although I myself can’t do a handstand, I’m proud to tell you about our most important achievements last year, each of which is the result of many years of collective work. None of them were given to us for nothing.
13 years have passed since the launch of the subscription and we have more than 100 million subscribers around the world. In 2017, Amazon delivered more than 5 billion products to Prime subscribers and this year more new subscribers appeared than in any other year (both in the US and abroad). Subscribers in the United States now receive unlimited free delivery within 2 days to more than 100 million different items. We now provide Prime service in Mexico, Singapore, the Netherlands and Luxembourg and have introduced Prime for business in the USA and Germany. We are constantly speeding up subscription delivery, now in more than 8,000 locations Prime subscribers receive goods the same or next day with free delivery. Prime Now is now available in more than 50 cities in 9 countries. In 2017, Prime Day became our largest global action (but then its record was broken on Cyber Monday) when we got more Prime subscribers than on any other day in the history of our company.
It is gratifying to see how AWS, a business with a projected annual revenue of $ 20 billion, reinforces already good growth. AWS has also accelerated innovation — especially in areas such as machine learning, artificial intelligence, the Internet of Things, and serverless data processing. In 2017 AWS, we announced over 1,400 services and tools, including Amazon SageMaker, that drastically simplify the process of creating complex machine learning models. Tens of thousands of customers also use a wide range of AWS machine learning services, whose share of active users increased by more than 250% last year, due in part to the widespread adoption of Amazon SageMaker. And in November, we held our sixth re: Invent conference, which was attended by more than 40 thousand people and more than 60 thousand watched it online.
In 2017, for the first time in our history, more than half of the products bought on Amazon around the world were provided by independent sellers, including small and medium-sized businesses. More than 300 thousand small and medium-sized enterprises began trading on Amazon in 2017. Our fulfillment service delivers billions of goods for small and medium-sized businesses around the world. During the Prime Day promotion in 2017, customers ordered more than 40 million products from small and medium-sized enterprises, which is 60% more than during the promotion in 2016. Our Amazon Global Selling service (which simplifies small business selling abroad) grew in 2017. 50% and now more than 25% of all sales of independent sellers is the international electronic commerce of small and medium-sized businesses.
Alexa is gaining more and more consumers. Alexa-enabled devices are among Amazon's best sellers. We are witnessing an active implementation of support by other companies and developers. Alexa now has over 30,000 third-party skills. Alexa support is available for customers on more than 4000 smart home devices from 1200 brands. Every day we improve the ability of Alexa. We have developed and implemented the technology of acoustic imprint, thanks to which your speaker does not respond when he hears Alexa ads on TV. Thanks to this, millions of devices did not “wake up” during Alexa advertising during the break of the American Football Super Cup match. Speech recognition at a distance, and it is already quite good, has improved over the past year by 15%. In the US, UK and Germany, we have improved Alexa's ability to understand the language by more than 25% thanks to machine learning and supervised learning components. These supervised learning technologies have reduced by 40 times the amount of labeled data required to achieve the same accuracy! We have also seriously reduced the amount of time required for Alexa to learn new languages using machine translation and learning transfer technology. Thanks to them, we can now work in new countries, such as India and Japan.
2017 was our record year for equipment sales. Consumers have acquired tens of millions of Echo, while Echo Dot and Fire TV Stick with Alexa have become best sellers of all Amazon products, regardless of brand or category. This year during the holiday purchases, twice as many Fire TV Sticks and Fire children's tablets were sold. In 2017, a completely new Echo speaker was released with improved design, sound and at a reduced price; Echo Plus with integrated hub and Echo Spot, compact and beautiful, with a round screen. We released the next generation Fire TV with 4K Ultra HD and HDR and a Fire HD 10 tablet with 1080p Full HD display resolution. We also celebrated the 10th anniversary of the Kindle with the launch of the new Kindle Oasis, our very best reader. It is waterproof and can be taken to the bathroom. The screen is enlarged to 7 inches, a resolution of 300ppi. Sound is also integrated. Now you can listen to books from your library on Audible.
The Prime Video service continues to be a driver for attracting and retaining subscribers. Last year, we improved our service by adding new award-winning original content, such as “The Amazing Mrs. Maisel” (awarded two critics and two Golden Globes), and the Oscar-nominated “Love-Disease”. We have expanded our program guide around the world by launching the new season of “Bosch”, “Despicable Pete” in the USA, “Grand Tour” in the UK and “Wanted” in Germany, we have added new Sentosha shows in Japan, “Breathe for us” and “Inside Edge” from India. Also this year, we expanded our offerings on our Prime channels, adding CBS All Access to the United States and launching channels in the UK and Germany.
We started showing broadcasts of matches of the national football league on Thursdays: 18 games were watched by 18 million spectators. In 2017, Prime Video Direct bought the rights to more than 3 thousand feature films, transferring more than $ 18 million in royalties to independent film makers and other copyright holders. “Jack Ryan” for Tom Clancy with John Krasinski has already been planned for Prime Original in the future; “King Lear” with Anthony Hopkins and Emma Thompson; The Romanovs, produced by Matt Weiner, The Carnival Row with Orlando Bloom and Cara Delevingne; “The Good Signs” with John Ham; “Homecoming” with Julia Roberts (her first work on the series). We bought the rights to The Lord of the Rings, as well as the Cortes mini-series about Hernan Cortes, produced by Stephen Spielberg and Javier Bardem. We plan to start work on these series this year.
Amazon Music continues to grow and already has tens of millions of subscribers. In 2017, we were able to provide Amazon Music Unlimited, an ad-free subscription, in more than 30 countries, and the number of subscribers has doubled over the past six months.
Amazon has become the venue for tens of millions of fashion-conscious people to update their wardrobe. In 2017, we introduced the first bonus for fashion subscribers, Prime Wardrobe, a new service that organizes a fitting room for Prime subscribers right at their home, allowing them to try on all the latest trends before buying. We started a partnership with Nike and UGG, introduced new collections of celebrities like Drew Barrymore and Dwayne Wade, as well as dozens of new brands such as Goodthreads and Core10. We also continue to help thousands of designers and artists offer exclusive designs and prints through the Merch by Amazon service. We ended 2017 with the launch of an interactive with the Calvin Klein brand, including pop-ups, on-site customization, fitting rooms with lighting and music running Alexa, etc.
At Amazon Whole Foods. Photo Source: GeekWire photo / Taylor Soper
When we acquired Whole Foods last year, we announced our commitment to making quality organic food available to everyone, and immediately cut prices on popular basic foods, including avocados, organic eggs, and salmon grown responsibly. This was followed by a second round of price cuts in November, and our Prime promotions broke the Thanksgiving turkey record for Whole Foods.
Since February, in some cities, we have offered Prime subscribers free delivery for 2 hours of orders worth more than $ 35. In March and April, we expanded the list of these cities and continue to expand it throughout the United States. We have also expanded the benefits of Amazon Prime Rewards Visa Cards by providing a 5% discount on the Whole Foods Market. In addition, Amazon can now purchase products under Whole Foods labels, such as 365 Everyday Value. In more than a hundred Whole Foods stores, you can buy Echo and other Amazon devices, as well as pick up or return Amazon packages from Amazon Lockers. We also started work on technical support for recognizing Prime subscribers at the Whole Foods box office to offer them even more benefits.
A new type of store - a store without an Amazon Go cash desk - opened in January in Seattle. Since the opening, we’ve been happy to hear customer reviews that describe Amazon Go’s shopping experience as a “miracle.” The miracle effect is achieved by a combination of our own developments in the field of computer vision, combining information from various sensors and deep learning. All this together allowed us to create a store that operates without cash desks on the principle of Just Walk Out. In the JWO store, it is much more convenient for customers to purchase their favorite breakfast, lunch, dinner, snack or some basic products. The list of the most popular products is not surprising - naturally, coffee-containing drinks and water are popular, but this list includes Chicken Banh Mi Chicken Sandwich, chocolate chip cookies, sliced fruits, gamma bears and our semi-finished Amazon Meal Kits.
Our Treasure Truck is now not only in Seattle. There are already 35 of them and they travel around 25 cities of the USA and 12 cities of Great Britain. Our soap bubble trucks and music have delivered hundreds of thousands of orders, from sirloin steaks to the latest Nintendo releases. Also, throughout the year, our treasure trucks lifted our spirits and helped those in need, including the free delivery of hundreds of baby seats, thousands of toys, tens of thousands of socks and other necessary things, to people who need help, from the victims of Hurricane Harvey to the homeless and children who just need cheer up the holiday.
Amazon.in is the fastest growing e-marketplace in India. According to comScore and SimilarWeb, this is the most visited site from both desktop and mobile devices. Also, according to the AppAnnie, Amazon.in's mobile app was the most downloaded India shopping app in 2017. The growth of Prime subscribers from users from India in the first year was more than in any other country where Amazon works. Prime selection in India includes over 40 million local products from independent vendors, and Prime Video invests in original content for India, including two recent premieres and even more than a dozen new shows in production.
We strive to reduce carbon emissions by optimizing our transportation network, improving packaging and improving energy efficiency in operations. Our long-term goal is to operate our entire global infrastructure with 100% renewable energy. We recently launched a Texas-based wind farm, our largest at the moment. With its 100 turbines, it generates more than 1 million megawatts of clean energy annually. We plan to have solar generators in more than 50 fulfillment centers by 2020, and have already launched 24 projects to generate solar and wind energy in the United States. In the near future, another 29 such projects. All Amazon generation could already supply electricity to more than 330 thousand households annually.
In 2017, we celebrated the 10th anniversary of the start of our packaging project, Frustration-Free Packaging, the first of our endeavors in the field of responsible packaging of goods. Thanks to him, we were able to abandon 244 thousand tons of packaging materials over the past 10 years. In 2017, our projects significantly reduced the amount of packaging waste, which is equivalent to 305 million packaging boxes. Worldwide, Amazon contracts with suppliers for our last mile low emissions fleet. Already now part of our fleet in Europe is made up of electric or gas cars, and we also have about 40 thousand electric scooters and bicycles that perform local delivery.
Millions of small and medium-sized enterprises around the world offer their products on Amazon to have access to consumers around the world. This is a small business from every US state and from more than 130 countries. More than 140,000 small businesses overcame the revenue bar of $ 100,000 in 2017 and more than a thousand independent authors overcame the bar of $ 100,000 in royalty payments through the Kindle Direct Publishing service.
Since 2011, we have invested more than 150 billion US dollars in our fulfillment network, transportation facilities and infrastructure, including AWS data centers.
In 2017 alone, we created more than 130 thousand new jobs at Amazon (not including business acquisitions), bringing the total number of employees to 560 thousand. Our jobs are diverse: from scientists studying artificial intelligence, to packers or fulfillment center employees . In addition to this direct hiring of personnel, we estimate that more than 900 thousand jobs were created through our trading platform around the world, and Amazon investments created another 260 thousand jobs in areas such as construction, logistics, etc.
We are especially proud of our Career Choice employee program. We cover 95% of tuition fees (and textbooks up to $ 12 thousand) for hourly workers who have worked for more than a year in such areas as aircraft mechanics, computer design, machine tool technology, experimental technologies in the field of medicine and patient care. We pay for the development of popular professions, even if they are not needed for a career at Amazon. More than 16 thousand employees worldwide (including 12 thousand in the USA) have benefited from this program since launch in 2012. This program operates in ten countries and expands to South Africa, Costa Rica and Slovakia next year. The most popular courses were truck driving, medicine and information technology.
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Jeff Bezos, CEO of Amazon, at the opening of Spheres. Photo Source: heraldnet.com
Jeff Bezos, April 18, 2018
To our shareholders
The American Consumer Satisfaction Index recently announced the results of its annual survey, and in it, for the eighth consecutive year, consumers ranked Amazon first. In the UK there is a similar index, the UK Customer Satisfaction Index, which is published by the Institute for Consumer Services. For the fifth consecutive time, Amazon UK comes first in this study. LinkedIn also recently placed Amazon in first place in the list of the best companies of 2018. This list ranks the companies in which specialists in the States would like to work the most. And just a few weeks ago, Harris Poll published its annual reputation rating (Reputation Quotient), for the compilation of which more than 25 thousand consumers are interviewed on a wide range of topics, ranging from the work environment to social responsibility and goods and services. For the third consecutive year, Amazon has come first on this list.
I congratulate and thank the 560 thousand Amazons who come to work every day and show an unrelenting obsession with their clients and a commitment to excellence in everything related to their work. And on behalf of the Amazons of all countries, I express my deep gratitude to our customers. We are incredibly inspired by your ratings in these polls.
What I love most about our customers is that they are amazingly demanding. Their expectations never stand still, they always grow. This is human nature. If we were happy with everything, we would still be engaged in hunting and gathering. People’s appetite for a better life is never saturated, and what looked like “wow” yesterday is quite common today. I observe that today this path from “wow” to “the way it should be” has become shorter than ever before. Perhaps this is happening because access to information has become easier. In a few seconds and a couple of touches on the phone screen, consumers can read reviews, compare prices of many retailers, see what is available, find out how quickly it will be sent or where to pick it up, and much more. I give examples from the retail sector, but I observe that a similar strengthening of consumer power is everywhere in all areas of the business where Amazon works, and in other industries too. In this world you cannot rest on your laurels. Clients have no laurels for you.
How to stay ahead of ever-growing user expectations? The only true way does not exist - it is always a combination of many factors. But the high standards of attitude to work used in your company at every step and in all details is, of course, an essential part. Over the years, we have had some success in our efforts to meet the high expectations of consumers. We also had certain failures along the way, which cost us billions of dollars. Given both of these, I would like to share with you the most important thing that we have been able to still learn and understand about the high standards of attitude towards working within the company.
Congenital or can you teach?
Firstly, there is the most important question: is the pursuit of excellence something inherent in a person from the beginning or can this be taught? If you challenge me to your basketball team, you can teach me a lot, but you cannot teach me how to grow taller. Should we, from the very beginning and first of all, select people who already have a desire for excellence in work? If so, then my letter to you should mainly be devoted to hiring techniques, but I think differently. I am sure that the pursuit of excellence can be taught. In life in general, people well adopt high standards when they are in sight and everything around them is transparent. The pursuit of excellence is contagious. Put the newcomer in a team that is in trouble, and he will quickly take this approach. The converse is also true. If indifference prevails, it will quickly spread everywhere. And although transparency in the company, when everything is in plain sight, works well when teaching high standards of attitude to one’s work, this process can be accelerated by formulating several basic principles that I hope to convey to you in this letter.
Generic or field specific?
Another important question is whether the pursuit of excellence is a universal principle or whether they depend on the application. In other words, if you have a responsible attitude in one area, will it be the same in another field? I am convinced that the pursuit of excellence always has an adjustment for the place, and you will have to learn the right approach separately for each area of your interests. When I created Amazon, I strove for excellence in terms of invention, customer care, and (fortunately) in terms of hiring staff. But I didn’t have a high standard regarding everyday work processes: how to keep control of the problems once solved, how to get rid of flaws while they are in the bud, how to check work processes and much more. I had to learn and develop high standards in these areas, and my colleagues were my mentors.
It is important to understand this position, because thanks to it you remain humble, do not lose your sense of reality. You can consider yourself a person as a whole responsible and having high standards, but you will still have dangerous “blind spots”. These can be entire areas of business where you do not even notice that your requirements are too low or simply absent, and certainly far from the world level. It is critical to be prepared to admit that there is such a probability, and it is not equal to zero.
Landmark and distance
What do you need to set high standards in a certain field? Firstly, you should be able to find out and determine what is really included in the concept of “good” for this area, which is a guideline in it. Secondly, you must have realistic estimates of how difficult it is to reach such a landmark, how much work you need to do to reach it - and this is your distance.
Let me give you two examples. One is a bit of a funny illustration that denotes the subject well, and the second is from real life, from a situation that arises with some regularity at Amazon.
The perfect handstand
Photo source: Karolina Gaewska
One of my close friends recently decided to learn how to make an ideal handstand without leaning against anything. Without leaning on the wall. Not so much for a few seconds, but to be suitable for Instagram. She decided to start her journey by enrolling in a master class in her yoga studio, which she attended. Then she practiced for some time, but did not achieve the desired result. Then she hired a handstand coach. Yes, I understand what you just thought, but believe me, this is a real person. In the very first lesson, this coach gave her amazing advice. “Most people,” he said, “think that if they work hard, they can make an ideal handstand for about two weeks. But the truth is that it takes about six months of daily exercise. If you think that you should be able to do it in two weeks, then then you will drop it more than your expectations. ” Unrealistic estimates of distance - often implicit or unspoken - they kill high standards. To achieve a high standard yourself or as a team, you need to form and actively convey, realize a realistic assessment of how much you have to plow. And this coach understands such things very well.
Six page narratives
At Amazon, we do not make presentations in PowerPoint or other slide-oriented programs. Instead, we write six-page memos structured as narrative, as narrative. We read them silently at the beginning of each meeting, which are held in a kind of training room. Of course, the quality of these services can vary greatly. Some of them have such crystal clarity that angels singing is heard. They are brilliant, thoughtful and set the tone for a high-quality discussion. Sometimes, of course, there are notes from the other end of the spectrum.
In the example of a handstand, the criterion of a high standard is easy to recognize and define. It is easy to describe in detail all the requirements for a well-executed handstand, and in the end, you will either do it or not. The example of how people write is very different. The difference between a magnificent memo and a mediocre one is much more blurry. It would be extremely difficult to describe the detailed requirements for creating a great service. However, I observe most of the time that readers react to a well-written document in a similar way. They distinguish their quality in reading, in fact. So a high standard exists, it is real, even if it is not easy to describe.
And this is what we came to as a result. Even if the memo is not very good, it’s not the inability of its author to realize the high standard, but quite another - in erroneous expectations about the distance. They believe in vain that an excellent six-page service can be written in a day or two or even in a few hours, although in fact it takes a week or more! As if they are trying to do a handstand in two weeks, and we are not training them the way we need. Magnificent memos are written and corresponded, discussed with colleagues who are asked to improve the text, then they are put off for a couple of days, and then again reinstated. All of this is simply impossible to do in a day or two. The most important consideration is that you can improve the result by simply increasing the training period, conveying to them the fact that a great memo should take them a week or more.
Abilities
In addition to determining the bar for yourself and have a realistic assessment of the distance, the question arises - what about skills? Of course, in order to write a document at the global level, you need to be highly skilled in writing. So skills and abilities is another required element? In my opinion, not so much. At least, it is not so critical for one employee who works in a team. A football coach does not have to be able to hit a penalty, and a director does not have to be able to play any role in front of the camera. But both of them should be able to determine the quality of execution for these things and teach a realistic perception of the amount of labor that will have to be spent to achieve them. Even if we talk about a six-page memo, this is a collective work. Someone in the team must have the necessary skills, but it does not have to be just you. (I note that traditionally in Amazon, the names of the authors are never mentioned in the memo - it is submitted by the whole team).
The benefits of high standards
Building a company culture of commitment to excellence is worth the effort and gives a lot of advantages. It is obvious and natural that you will create the best products or services for your customers, and this reason alone would be enough! Perhaps a little less obvious that people accustomed to the pursuit of excellence will help you in hiring better staff and retaining customers. And an even more subtle thing: the culture of striving for excellence hides all the “invisible”, but extremely important work that is done every day in the company. I am talking about work that no one sees. This work is done there when there is no one to watch it. In a culture of high standards, the good performance of such work is a reward in itself, part of what is included in the concept of professionalism.
Well, and, after all, the pursuit of excellence is fun. After you try out how to strive to work to high standards, you will no longer have a return trip.
So, there are four elements in the quest for excellence, as we see it now: it can be taught, it depends on the field of application, you must set a benchmark, you must clearly teach to see the realistic distance that you must go to achieve a benchmark. For us, it worked at all levels - from the most general to the smallest. Starting from the compilation of memos up to created from scratch projects of new business areas. We hope that this approach will help you.
Do not deviate from high standards. Leaders do not lower the bar, which for many people may seem too high.
- from Amazon leadership principles
Recent Achievements
The high standards that our leaders adhere to have helped us a lot. And although I myself can’t do a handstand, I’m proud to tell you about our most important achievements last year, each of which is the result of many years of collective work. None of them were given to us for nothing.
Amazon prime
13 years have passed since the launch of the subscription and we have more than 100 million subscribers around the world. In 2017, Amazon delivered more than 5 billion products to Prime subscribers and this year more new subscribers appeared than in any other year (both in the US and abroad). Subscribers in the United States now receive unlimited free delivery within 2 days to more than 100 million different items. We now provide Prime service in Mexico, Singapore, the Netherlands and Luxembourg and have introduced Prime for business in the USA and Germany. We are constantly speeding up subscription delivery, now in more than 8,000 locations Prime subscribers receive goods the same or next day with free delivery. Prime Now is now available in more than 50 cities in 9 countries. In 2017, Prime Day became our largest global action (but then its record was broken on Cyber Monday) when we got more Prime subscribers than on any other day in the history of our company.
Amazon web services
It is gratifying to see how AWS, a business with a projected annual revenue of $ 20 billion, reinforces already good growth. AWS has also accelerated innovation — especially in areas such as machine learning, artificial intelligence, the Internet of Things, and serverless data processing. In 2017 AWS, we announced over 1,400 services and tools, including Amazon SageMaker, that drastically simplify the process of creating complex machine learning models. Tens of thousands of customers also use a wide range of AWS machine learning services, whose share of active users increased by more than 250% last year, due in part to the widespread adoption of Amazon SageMaker. And in November, we held our sixth re: Invent conference, which was attended by more than 40 thousand people and more than 60 thousand watched it online.
Trading floor
In 2017, for the first time in our history, more than half of the products bought on Amazon around the world were provided by independent sellers, including small and medium-sized businesses. More than 300 thousand small and medium-sized enterprises began trading on Amazon in 2017. Our fulfillment service delivers billions of goods for small and medium-sized businesses around the world. During the Prime Day promotion in 2017, customers ordered more than 40 million products from small and medium-sized enterprises, which is 60% more than during the promotion in 2016. Our Amazon Global Selling service (which simplifies small business selling abroad) grew in 2017. 50% and now more than 25% of all sales of independent sellers is the international electronic commerce of small and medium-sized businesses.
Alexa
Alexa is gaining more and more consumers. Alexa-enabled devices are among Amazon's best sellers. We are witnessing an active implementation of support by other companies and developers. Alexa now has over 30,000 third-party skills. Alexa support is available for customers on more than 4000 smart home devices from 1200 brands. Every day we improve the ability of Alexa. We have developed and implemented the technology of acoustic imprint, thanks to which your speaker does not respond when he hears Alexa ads on TV. Thanks to this, millions of devices did not “wake up” during Alexa advertising during the break of the American Football Super Cup match. Speech recognition at a distance, and it is already quite good, has improved over the past year by 15%. In the US, UK and Germany, we have improved Alexa's ability to understand the language by more than 25% thanks to machine learning and supervised learning components. These supervised learning technologies have reduced by 40 times the amount of labeled data required to achieve the same accuracy! We have also seriously reduced the amount of time required for Alexa to learn new languages using machine translation and learning transfer technology. Thanks to them, we can now work in new countries, such as India and Japan.
Amazon branded devices
2017 was our record year for equipment sales. Consumers have acquired tens of millions of Echo, while Echo Dot and Fire TV Stick with Alexa have become best sellers of all Amazon products, regardless of brand or category. This year during the holiday purchases, twice as many Fire TV Sticks and Fire children's tablets were sold. In 2017, a completely new Echo speaker was released with improved design, sound and at a reduced price; Echo Plus with integrated hub and Echo Spot, compact and beautiful, with a round screen. We released the next generation Fire TV with 4K Ultra HD and HDR and a Fire HD 10 tablet with 1080p Full HD display resolution. We also celebrated the 10th anniversary of the Kindle with the launch of the new Kindle Oasis, our very best reader. It is waterproof and can be taken to the bathroom. The screen is enlarged to 7 inches, a resolution of 300ppi. Sound is also integrated. Now you can listen to books from your library on Audible.
Prime video
The Prime Video service continues to be a driver for attracting and retaining subscribers. Last year, we improved our service by adding new award-winning original content, such as “The Amazing Mrs. Maisel” (awarded two critics and two Golden Globes), and the Oscar-nominated “Love-Disease”. We have expanded our program guide around the world by launching the new season of “Bosch”, “Despicable Pete” in the USA, “Grand Tour” in the UK and “Wanted” in Germany, we have added new Sentosha shows in Japan, “Breathe for us” and “Inside Edge” from India. Also this year, we expanded our offerings on our Prime channels, adding CBS All Access to the United States and launching channels in the UK and Germany.
We started showing broadcasts of matches of the national football league on Thursdays: 18 games were watched by 18 million spectators. In 2017, Prime Video Direct bought the rights to more than 3 thousand feature films, transferring more than $ 18 million in royalties to independent film makers and other copyright holders. “Jack Ryan” for Tom Clancy with John Krasinski has already been planned for Prime Original in the future; “King Lear” with Anthony Hopkins and Emma Thompson; The Romanovs, produced by Matt Weiner, The Carnival Row with Orlando Bloom and Cara Delevingne; “The Good Signs” with John Ham; “Homecoming” with Julia Roberts (her first work on the series). We bought the rights to The Lord of the Rings, as well as the Cortes mini-series about Hernan Cortes, produced by Stephen Spielberg and Javier Bardem. We plan to start work on these series this year.
Amazon music
Amazon Music continues to grow and already has tens of millions of subscribers. In 2017, we were able to provide Amazon Music Unlimited, an ad-free subscription, in more than 30 countries, and the number of subscribers has doubled over the past six months.
Fashion
Amazon has become the venue for tens of millions of fashion-conscious people to update their wardrobe. In 2017, we introduced the first bonus for fashion subscribers, Prime Wardrobe, a new service that organizes a fitting room for Prime subscribers right at their home, allowing them to try on all the latest trends before buying. We started a partnership with Nike and UGG, introduced new collections of celebrities like Drew Barrymore and Dwayne Wade, as well as dozens of new brands such as Goodthreads and Core10. We also continue to help thousands of designers and artists offer exclusive designs and prints through the Merch by Amazon service. We ended 2017 with the launch of an interactive with the Calvin Klein brand, including pop-ups, on-site customization, fitting rooms with lighting and music running Alexa, etc.
Whole foods
At Amazon Whole Foods. Photo Source: GeekWire photo / Taylor Soper
When we acquired Whole Foods last year, we announced our commitment to making quality organic food available to everyone, and immediately cut prices on popular basic foods, including avocados, organic eggs, and salmon grown responsibly. This was followed by a second round of price cuts in November, and our Prime promotions broke the Thanksgiving turkey record for Whole Foods.
Since February, in some cities, we have offered Prime subscribers free delivery for 2 hours of orders worth more than $ 35. In March and April, we expanded the list of these cities and continue to expand it throughout the United States. We have also expanded the benefits of Amazon Prime Rewards Visa Cards by providing a 5% discount on the Whole Foods Market. In addition, Amazon can now purchase products under Whole Foods labels, such as 365 Everyday Value. In more than a hundred Whole Foods stores, you can buy Echo and other Amazon devices, as well as pick up or return Amazon packages from Amazon Lockers. We also started work on technical support for recognizing Prime subscribers at the Whole Foods box office to offer them even more benefits.
Amazon go
A new type of store - a store without an Amazon Go cash desk - opened in January in Seattle. Since the opening, we’ve been happy to hear customer reviews that describe Amazon Go’s shopping experience as a “miracle.” The miracle effect is achieved by a combination of our own developments in the field of computer vision, combining information from various sensors and deep learning. All this together allowed us to create a store that operates without cash desks on the principle of Just Walk Out. In the JWO store, it is much more convenient for customers to purchase their favorite breakfast, lunch, dinner, snack or some basic products. The list of the most popular products is not surprising - naturally, coffee-containing drinks and water are popular, but this list includes Chicken Banh Mi Chicken Sandwich, chocolate chip cookies, sliced fruits, gamma bears and our semi-finished Amazon Meal Kits.
Treasure truck
Our Treasure Truck is now not only in Seattle. There are already 35 of them and they travel around 25 cities of the USA and 12 cities of Great Britain. Our soap bubble trucks and music have delivered hundreds of thousands of orders, from sirloin steaks to the latest Nintendo releases. Also, throughout the year, our treasure trucks lifted our spirits and helped those in need, including the free delivery of hundreds of baby seats, thousands of toys, tens of thousands of socks and other necessary things, to people who need help, from the victims of Hurricane Harvey to the homeless and children who just need cheer up the holiday.
India
Amazon.in is the fastest growing e-marketplace in India. According to comScore and SimilarWeb, this is the most visited site from both desktop and mobile devices. Also, according to the AppAnnie, Amazon.in's mobile app was the most downloaded India shopping app in 2017. The growth of Prime subscribers from users from India in the first year was more than in any other country where Amazon works. Prime selection in India includes over 40 million local products from independent vendors, and Prime Video invests in original content for India, including two recent premieres and even more than a dozen new shows in production.
Responsible Resource Use
We strive to reduce carbon emissions by optimizing our transportation network, improving packaging and improving energy efficiency in operations. Our long-term goal is to operate our entire global infrastructure with 100% renewable energy. We recently launched a Texas-based wind farm, our largest at the moment. With its 100 turbines, it generates more than 1 million megawatts of clean energy annually. We plan to have solar generators in more than 50 fulfillment centers by 2020, and have already launched 24 projects to generate solar and wind energy in the United States. In the near future, another 29 such projects. All Amazon generation could already supply electricity to more than 330 thousand households annually.
In 2017, we celebrated the 10th anniversary of the start of our packaging project, Frustration-Free Packaging, the first of our endeavors in the field of responsible packaging of goods. Thanks to him, we were able to abandon 244 thousand tons of packaging materials over the past 10 years. In 2017, our projects significantly reduced the amount of packaging waste, which is equivalent to 305 million packaging boxes. Worldwide, Amazon contracts with suppliers for our last mile low emissions fleet. Already now part of our fleet in Europe is made up of electric or gas cars, and we also have about 40 thousand electric scooters and bicycles that perform local delivery.
Small Business Support
Millions of small and medium-sized enterprises around the world offer their products on Amazon to have access to consumers around the world. This is a small business from every US state and from more than 130 countries. More than 140,000 small businesses overcame the revenue bar of $ 100,000 in 2017 and more than a thousand independent authors overcame the bar of $ 100,000 in royalty payments through the Kindle Direct Publishing service.
Investment and job creation
Since 2011, we have invested more than 150 billion US dollars in our fulfillment network, transportation facilities and infrastructure, including AWS data centers.
In 2017 alone, we created more than 130 thousand new jobs at Amazon (not including business acquisitions), bringing the total number of employees to 560 thousand. Our jobs are diverse: from scientists studying artificial intelligence, to packers or fulfillment center employees . In addition to this direct hiring of personnel, we estimate that more than 900 thousand jobs were created through our trading platform around the world, and Amazon investments created another 260 thousand jobs in areas such as construction, logistics, etc.
Career
We are especially proud of our Career Choice employee program. We cover 95% of tuition fees (and textbooks up to $ 12 thousand) for hourly workers who have worked for more than a year in such areas as aircraft mechanics, computer design, machine tool technology, experimental technologies in the field of medicine and patient care. We pay for the development of popular professions, even if they are not needed for a career at Amazon. More than 16 thousand employees worldwide (including 12 thousand in the USA) have benefited from this program since launch in 2012. This program operates in ten countries and expands to South Africa, Costa Rica and Slovakia next year. The most popular courses were truck driving, medicine and information technology.
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