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How to Think Like Amazon with John Rossman



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welcome to the remarkable leadership

podcast we're here each week to talk

about leadership teamwork organizational

culture and human potential with experts

from every walk of life your host is

Kevin Eikenberry a best-selling author

and leadership thought leader for 25

years this episode is sponsored by

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order your copy today at remarkable

podcast.com forward slash book and now

here's your host Kevin hey everybody

welcome to another episode of the

remarkable leadership podcast my guest

today is John Rossman and he has a brand

new book out we're gonna talk about it

let me tell you about John John is the

author of think like Amazon here it is

what 50 and 1/2 ideas to become a

digital leader he is a former Anam

Amazon executive who launched and scaled

the marketplace business which now

accounts for more than 50% of all units

sold at amazon.com

he's also led the enterprise services

business with responsibilities for

target.com nba.com Toys R Us and other

top brands he now heads rossmann

partners a niche business advisory firm

that helps clients succeed and thrive in

the digital era he has worked with the

Gates Foundation Microsoft Nordstrom's

Target Walmart and many more he is a

highly sought after expert for

commentary regarding Amazon by global

news media such as the New York Times

CNBC Bloomberg and others but we're not

gonna talk about Amazon today John

really that's right correctly right

welcome glad to have you well thanks and

and that is a good tip which is a lot of

people think this is about Amazon but to

me it's really about your business and

your leadership and what are you gonna

do differently to compete differently

and get different results in a time of

you know in competition much more

customer expectations higher customer

expectations where where technology

seems to be so important and people

think it's the hardest thing but

honestly it's not the hardest thing

strategy and changes the hardest thing

and I'm just taking some tools and

tricks from Amazon to help help you

think differently and for all of you

listening listen how often you eat the

chance to sit across the table

metaphorically from an Amazon executive

but we got him right here and so John

let's start a little bit here you know

it's when I introduce people we know

where they are today and tells us a

little bit about your path but not

really so tell us a little about the

journey about how you got there and how

you ended up where you are now just

quick synopsis is sort of the path that

and tells us a little bit more about who

you are yeah sure so I was an engineer

and I've always enjoyed you know kind of

processed development systems

integration and making change happen

improving business outcomes improving

efficiency I had the opportunity in

early 2002 to join Amazon and launch the

marketplace business so I was at Amazon

from early 2002 through late 2005

interesting time at Amazon that's really

when we started to understand that

Amazon was at its core two types of

business we were a retailer and we were

a company that built capabilities that

other companies use right so platform

strategies um I got the opportunity to

start and launch and scale the

marketplace business and then run

Enterprise Services as you noted and

when I left Amazon in late 2005 and I

started to work with my clients on

digital strategy and digital change I

started to see the impact of all the

little anecdotes and strategies and

mindset maneuvers we would do to get

different types of results and it was it

was six or seven years after I left the

Amazon I had one client at the Gates

Foundation who just said John you oughta

write a book and so I started writing

these books and this book I think like

Amazon really comes from the past four

or five years where I've been out

talking to a lot of audiences working

with teams and just all the variety of

questions of like how would Amazon think

about the law right and so that's that's

where the the 50 and a half ideas came

from was

was really in response to everything

that everybody ever asked but I try to

always give kind of recommendations and

actions that people can take hopefully

without asking for permission to get a

different type of result perfect so the

subtitle of the book does have this

fifty and a half ideas thing but the key

line in the subtitle is to become a

digital leader and you talk in the but

you say in the book like I can write a

whole book about what that even means

you don't have time for a whole book

here Jon but I would love to know how

you would define a digital leader

because some people here might be

thinking well that's isn't me because

I'm in you know I'm in this business or

I'm in that business or whatever so what

do you what do you mean when you say a

digital leader and I think pretty much

everyone who's listening is gonna say

okay that's me but tell me tell us a

description or yeah well there's lots of

ways to define what does being digital

mean but to me being digital is really

two core attributes and while they sound

similar they're actually distinctly

different and while they sound like kind

of athletic attributes they're actually

business and leadership attributes too

and so the first attribute that I think

defines digital is speed and if you

think about speed speed is about

repetitive motion right it's about being

effective in world class at one

particular motion right and so really

that's about operational excellence and

I think that people under index are

under-recognized

that the best competitors are

operationally excellent but then you

have to couple that with the other

attribute which is agility and agility

is the is the capability of both sensing

or recognizing when a change is needed

and then the ability to make change

happen small change in big change right

and so the best companies and the best

leaders out there are able to be both

operational experts and and have

operational excellence and have the

ability to make change happen right

launch new products launch new services

bring in new new capabilities for their

customers on a can

basis and it's really the combination of

those two attributes which define the

digital company and the digital leader

going forward and and as I say kind of

like it's no big stretch to say Amazon

is a great example of a company and a

set of leaders who demonstrate

systematically how to be both

operationally excellence and innovation

in innovative it doesn't happen by

accident right but it's a big playbook

that's why there's a lot of ideas here

but there is a system of for how Amazon

gets these results and that's what I try

to I try to demystify and break down

yeah I think you do a great job and by

the way 50 and a half ideas doesn't mean

you know 22 pages everybody on each idea

so it is readable and attainable and

we're going to talk about four of those

ideas in a second but that I've selected

but first I want to comment on something

you just said and that is that a lot of

people listening might think about

operational excellence and kind of and

while they everyone would nod politely

and say we ought to do that a lot of

people say well that's sort of boring

and yet you connect it to speed which i

think is so important and so valuable

and I think you dare I say John you made

that sound sexy and and and quite

honestly I think it's the reason I say

that I think it's important because I

think that sometimes people want to

overlook that they want to move to the

agility sort of thing they want to move

to that whole piece and I think they

have to be tied together and I think you

do a great job in the book of helping

make that connection so so thanks well

two things I would I would unpack

relative to that and thank you for that

is first is if you can now tell people

that Kevin said I made operational

excellent

I can see a t-shirt there and everything

so it's purses if you're truly gonna be

customer obsessed right well what's the

first thing you have to do you have to

deliver perfection to them right you

have to develop trust by doing what

you're saying you're going to do deliver

to what your brand promises right well

that's what operational excellence

delivered

and the second thing that operational

excellent deliver to you is that by

forcing yourself to try to get to

perfection

you're gonna develop ideas for

innovation Bezos has said that 90% of

all Amazon innovations come from

operational excellence they don't come

from this big lightning bolt or market

recognition opportunity they come from

asking the question how do we get to

perfect and so I think that that people

as you noted really don't recognize the

connected nature of operational

excellence to innovation and they just

want to jump to you know the developing

new ideas without that insight of how to

actually operate things I think you're

really hampered in your ability to do

that I think you're right and I think

that at the end of the day execution is

gonna win right so you've got to be able

to have that piece you just asked an

incredible question a second ago and it

relates to one of the four of the ideas

that I thought we'd chat about a little

bit and the first of those is idea

number 28 which everyone in for everyone

we are talking with John John Rossman

who wrote the book think like Amazon and

each chapter is one of the ideas and he

introduces it with a statement and idea

28 says improve your questions for

disruption and so talk to us about I

mean used as this great question how do

we get to perfection but how do what

would you tell all of us as leaders how

do we do that idea how do we do idea 28

well I think the most important thing is

to understand is that most often times

our solutions are framed by the

questions that were asking right and

what the natural tendency is is to skip

over and rush through the framing or the

questioning part of that exercise and

immediately jump to getting two

solutions getting the answers right

Einstein has a quote if I was given a

problem and my life depended upon

solving it if I had an hour for it I

would spend 55 minutes

um asking questions and five minutes

coming up with the solution and I think

that that is an amazing insight and what

I see teams doing repetitive repeatedly

is not thinking about truly like what

are the questions we're asking and so

you know what they'll ask is well you

know how do we fix it for this

particular instance or how do we fix it

this one time or how do we fix it in

this one use case today all right you

know and then the other thing is once

they come up with one I answer even if

they ask a better question than that

then they start going off of that one

and do all the next work and they never

go back and say well what about five

other of options right so that so we

dive in and then we dive in and then we

dive in then we dive in and we're way

from where we need to be and we take the

easy fix typically right and so so the

first recommendation is you've got to

slow down on really understanding what

problem are we trying to solve which I

frame is really the question means that

we're asking right so like what you

could say is you know the situation

might be well what happened with this

order right but the underlying questions

might be is well why did the customer

have to tell us that order was late

why didn't we recognize that early why

didn't we have monitoring in place right

um what were the upstream true root

causes for why that order was late

oftentimes it's things that are our

upstream from that particular step of

you know shipping or delivery or

something like that it could be in in

how the order was described it could be

how the vendor packaged it it could be

many other root cause issues and then

finally the questions about how would we

measure for this differently like did

our metrics actually tell us about this

or what do our metrics tell us about the

root cause of this those are the types

of questions that I would encourage

people that ask and slow down the

conversations before leaping to the

solutions and a final one that is a

classic Amazon move is if if you go oh

great I'm gonna build a tool or service

or improvement for this

particular example ask yourself the

question how would I have an external

client for that capability and how would

I make it self-service how would I make

it highly available how would I make it

price competitive so maybe this would be

like a payment service or an image

service or a promotion service thinking

about how you build the tool and asking

how that tool or service would be

available to external clients whether

you do it or not always tease out

important aspects of how you could

deliver a better solution that doesn't

just fit this one time that becomes a

generalized like Lego piece that you can

use in multiple cases and and so those

are those are some of the repeated

tricks that Amazon does perfect thank

you so III guess I started near about

halfway through the book I mean I've

read most of the book but I started with

the ones that I selected I'm going I'm

continuing on through because the next

one I have is idea 32 an idea 32 is

process versus bureaucracy and I love

the way you talk about this I'll really

do and I think that we all none of us

love bureaucracy and some people don't

love process but let's talk about those

two and I think you really you put them

in a great perspective well a lot of us

don't love process because it really is

bureaucracy right and and I remember in

All Hands meeting with Bezos and the

question was brought up like hey how do

we you know differentiate process from

bureaucracy right and and just you know

kind of gave this like well you know you

just you know bureaucracy when you see

it but actually good process helps avoid

bureaucracy and I would tell you just

biggest concern for Amazon is slowing

down becoming bureaucratic having less

accountability and being a less fun

place to work and so a good process at

Amazon has a set of attributes or

capabilities to it that actually help

avoid bureaucracy versus

hide it or or obfuscate what that

bureaucracy is right and so the things

that a good process has at Amazon are a

process has a written definition right

and so it actually again thinking about

forming blocks of capability right and

so you can't have a block of capability

if you don't have a deep written

definition of what that is where does it

stop where does it start

what does it take in what is it deliver

and something that all of your customers

internal and external would recognize a

good process has one owner and that

owner is the process and sometimes they

run that process but sometimes they just

deliver a process that others in the

enterprise use a process always has a

set of metrics and you're always able to

answer the question did my customers

have a good day today yes or no and why

and then the last thing I mentioned is

that a process we always had this notion

of a roadmap at Amazon and most people

roadmaps are this high stress you know

PowerPoint presentation at Amazon we had

this notion of kind of a lazy right and

the road map was simply a place where we

wrote down the ideas for what future

things we could do and build and service

to improve our business deliver

operational excellence add new features

and so it it formed the habit of us four

always be capturing and talking about

what could we do better so when the

moment came when we actually had to say

well how are we going to innovate on top

of this what are we going to do

differently what types of resources

would you need all that hard thinking

was done which gets to one of the

mistakes people make about innovation is

they go they think it can happen in a

day or you know innovation I always I

always liken it it's Jerry Seinfeld did

a great documentary about ten years ago

and it's called comedian and and what

the premise was was he was putting away

all of his old material and developing

new material and he talks about that he

had to go to the clubs at night to start

new routine from scratch he said you

know you've got to go to the sweaty gym

every single day right and so if you

want to be innovative you got to go to

the sweaty gym every day and be thinking

about how you're gonna innovate and be

capturing those ideas it does you don't

become a world-class athlete at the game

time you develop you become a

world-class athlete in your preparation

we could do a bunch of these ideas but

there's one that really captured my

imagination and and I've I've used a

similar idea with groups but not quite

this rich and I don't know where I got

the idea heard the ideas long long

before Amazon even but I love this idea

it's idea 45 in the book it's called the

future press release and it sounds like

it's something that Amazon does as a

process and I'd love for you to talk

about this because I think it's such a

powerful powerful idea yes I think teams

can use it at any I mean backup team can

use it at any level right right that's

right so the future press release oh so

part of how Amazon rationalizes ideas

right any project any proposal any any

big idea is they really have this

mandate of kind of starting with the

customer and working backwards and so

one of the steps they do is called the

Future press release and a future press

release is a is a short document right

it's a press release eyes to think of it

as a page and it's an articulation of

what the new project what the new

service delivers and the most important

thing about the or the first thing about

the future press release is it it's not

for when you launch the new product or

the new service and change it early year

after and you always talk first about

what delighted my customers about this

and try to make it as rich as possible

so you can actually taste it or feel

exactly why did customers delight it

love it the second thing you would do is

put talked about the metrics that you

might be measuring the success by maybe

the business case and the third piece

would be what were the big topics and

the issues that we tackled in order to

solve this now you wouldn't

to find how you solve form because you

haven't done that yet right you just hot

get the organization used to hey here

are the problems we have to solve

together right and then the other kind

of judo move that we would do on the

future press release is you give that

future press release to one leader in

the organization and the CEO preferably

or a very senior person would say we all

work for that person relative to making

this vision of the future press release

it come to life right and so it starts

orienting us to outcomes and delivering

things that matter versus paying

attention to things that don't matter

like organization structure jobs title

seniority those things don't deliver

value to customers right getting things

done delivered value to customers and so

the future press release is a great you

know change management tool to envision

what the future is and anoint a person

to be effective at delivering that

across the organization they're the

owner of that vision or whatever however

you want to describe it but they're the

person that we're well I love that we're

anointing them as that person so I love

both parts about I love the process of

the press release itself and then as you

described so well really someone is

responsible and we're all working for

them to make this happen which is great

so there are another what forty seven

and a half ideas in the book and I'm

just curious if at this point John in

istic in just a minute or two is there

another one that you maybe you'd like us

to talk about that maybe you thought I

would ask or hope that I would ask about

well one that I always think about is um

idea 42 which is called one-way door

two-way doors make better and faster

decisions and you know what is so ironic

is is that the most important things

that senior leadership does is allocate

resources right and to make decisions

but so few of us actually take the time

to think about what's the tour the

pattern of the framework

for how we make decisions right and so

in this idea I outline a couple of the

frameworks that Amazon uses for making

decisions and one of those frameworks is

called one-way doors versus two-way

doors Amazon thinks it's imperative if

you're going to be agile if you're going

to be competitive and deliver well you

have to make

yeah keep decision-making velocity going

right and one-way door decisions are

decisions that you actually need to slow

down right they're hard to reverse from

once you go through the door but to

weight your decisions are ones that are

more easily reversible you can go

through it evaluate and come back and

the natural inclination for most people

is to make most decisions one-way door

decisions when they're truly not there

truly to weight or decisions and so just

by thinking through is this a one-way -

or decision or to wait or decision and

how could I make what appears to be one

way towards decision actually a two-way

door decision then you can speed up

decision making in the organization you

can make people more accountable you can

grow leaders faster and you can make the

organization more agile so that that's

idea 42 one-way door versus two red

doors and of course that could lead us

to a whole conversation about innovation

and mistakes and all that stuff which we

don't have time for today John everybody

else sorry about that but I do have some

more things we're going to do before

we're finished and the next section of

the program if you will John and we call

the fast break and the fast break is

brought to you everybody by our

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most innovative way to really learn how

to be a leader a one day at a time one

month of time one year at time so with

that I have three ideas in the fastbreak

John I have three ideas for you and I

just I'm just gonna share the idea and

then I want you to just whatever your

first thoughts whatever you want to say

about them longer short that's up to you

okay the first process since we're

talking digital today I had to throw one

in that sort of you know technology

this is your this is the only one that's

that okay you ready

artificial intelligence what do you

think about what do we need to know

about what do you think we got to talk

about well I think it's gonna um people

there's lots of different types of AIS

and lots of different settings for AI

the one I'm most interested in is in

decision-making management science and

how AI can complement back-office

white-collar types of decision making

but the predecessor for being able to

apply algorithms and and machine

learning is you actually have to

understand really well what is the

decision I am trying to make and have a

well-defined process for it so that

you're capturing the data along with it

because all of these technologies AI in

particular its thrives on data so you

have to have a well understood process

you have to have a well decomposed

question the decision you're trying to

answer and you have to have an

instrumented process so you're capturing

the data that can then drive into that

AI component right and so you know your

the the decision you're trying to make

might be do I approve this loan or don't

I approve this loan do I call on this

customer don't I call on this customer

do i price it at X or do I price it at

wise all of those are the types of

decisions that AI will fundamentally

help help change and make real time but

if we don't have a good process around

them you won't have the opportunity to

use that to your benefit or we will get

the wrong wrong answer because question

right so next one a little less esoteric

is problem-solving about what do you

want to say or what are your thoughts

about problem solving well to some

degree we kind of covered it already

which is which is leaping to answers too

quickly without understanding the

question that you're being asked or the

problem that you have right um one of

the the I would call it like

championship disciplines is getting to

root cause right and getting to root

causes a luxury because it takes time

you have to

slow down the conversation you have to

have an abundance of data so that you

can actually get to the root cause so

you know one of the familiar techniques

is asking the five why's right why did

this happen why did that happen why did

that happen why did that happen by the

fifth why you start finally getting to

the root cause and so again I think it

comes to being very thoughtful about

truly understanding the problem and its

stakeholders what your solution options

are the risks and values behind those

solutions and and and how to get you

know I always think of this concept of

two for one right wait well if I solve

this problem how do I solve for

something else along with rights I hate

I hate situations where I can't get

leverage right that's really a type of

leverage right I always like to be

solving for leverage and so I think

that's a creative or nimble mindset to

take is is never do something one-off it

should always provide multiple points of

value so I always seem to think and I

guess I'll well I'll say it now and I

always seem to think that when I leave

one of these episodes and for all of you

watching or listening you know you you

are having a very similar experience

that I am actually is that there's

always a one big idea that I leave with

at least one big idea that I leave with

and I think that that will be the one

it's not a new idea to me but it's been

read refreshed and I think set a new and

valuable ways today John and that is the

question get the right question slow

down enough to get the right question

right you've said it four or five times

I can agree with you completely I've

said it to people but that doesn't mean

that it isn't a super important thing

and maybe the big idea that you might as

an individual kind of the future press

releases is be willing to take the time

to write out both the situation as well

as how you're thinking about solving and

if you're not willing to write it out

then what you you leave yourself open to

is misinterpretation and always having

to restart the conversation and so

that's one of the champ

ship disappoints of Amazon and quite

honestly until we write down we aren't

clear anyway not really clear till we

write it down one more thing in the

fastbreak I've got a sidetracked last

one simplification well I would start

with Amazon leadership principle number

three is invent and simplify and I think

maybe simplify it's surprising that

that's part of the leadership principle

but what we learned was that in order to

scale our processes we had to make them

as simple as possible but what gets in

the way of that is you know having

different procedures multiple job titles

not having simple data flows not really

merging when we do M&A activities and

not forcing simplification in our

process because we want you know every

divided to be heard we want to cover

every single use case we aren't willing

to do the job of changing or evolving or

being flexible and so making processes

simple is the key to scaling them here

you go so before we go

John so thank you for doing an excellent

job with the facts before we go I have a

couple more questions for you and one

the next two are ones I asked everyone

that I have on because I think anytime

that we get the chance to talk to

someone

and I'm saying this now to everyone

listening every time we get the chance

to talk someone interesting every time

you touch it talk to someone who's

accomplished and smart and wise like

Johnny is then I think we want to know

more about them and one of the questions

that I love to ask is what is something

that you do for fun John well I have two

boys in college and they both play water

polo and so I like a lot of water polo I

watch water polo in particular in the

fall and stuff so it's you know one of

these small esoteric sports but it's a

lot of fun it's a great community they

learn a lot of leadership skills being

involved in it and and so that's one of

the things I am blessed to get to go do

and and I really enjoy hey it may be

esoteric but it's an Olympic sport baby

and and the second one is what are you

reading

III think it's why I think it's smart

for all of us

ask other smart people what they're

reading because it expands our idea base

it expands our thoughts and I know what

you're gonna share and I think it's

really cool so well yeah well I am a bit

of a I'm not a history buff but I enjoy

history and I enjoy biographies and I

had a book recommended to me called the

spy in the traitor by Ben MacIntyre and

it's really a Cold War era so 1980s era

story of how the British m16 which is

the equivalent to the CIA turned a KGB

officer into a spy and a fascinating

story of that person and of all those

involved in the incredible bravery

involved there and then the other one

that I just finished which was a great

book which was called bad blood right

and so that was the the story of

fairness and and you know I always think

like hey you know how could this type of

you know we're well beyond that day

we're you know massive fraud can happen

and things like that it's like no we're

not you know and because human beings

John and people love a good story right

and they and obviously like they are

willing to skip over good management

practices like trust and verify versus

just trusting and so bad blood is a

really good story all right and so last

question for you the one you've been

wanting me to ask all along how can

people learn more about your work and

this book will think like Amazon is

available in hardback Kindle and audio

versions available obviously at Amazon

and all your other great book retailers

you can find out more about me at

rossmann partners comm and I really

question for all of you it's the same

one I ask you every single week watched

before listen before you should know I'm

gonna ask you now what what are you

gonna do with this and certainly the

whole conversation about slowing down to

ask better questions making sure you ask

the right question might be the thing

maybe

you had something else come to you maybe

it was something around the bureaucracy

piece maybe it was the phrase one of the

phrases that I wrote down which was

which was to to create decision-making

velocity think back to what you took

from this time and say what am I going

to do what action can I take as a leader

as an individual contributor what can I

do to make my world better might make my

team better to make our lives better

because I listened that's the question

so I'll leave you with that challenge

and John I will thank you one more time

for being here it was a pleasure to have

you I enjoyed the book and thanks so

much for being here

thank you very much all right and so

everybody before I go and we would love

to have you join in the conversation get

updates on what's going on with his

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over time let us know who you want to

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for with that I will say goodbye and

wish you all a great day and I look

forward to seeing you again next week

with another episode of the remarkable

leadership

[Music]