title: The Power Behind the Amazon Way with John Rossman
author: Pfeffer on Power
contenttype: podcast
publication: Pfeffer on Power
published: 2024-04-10T05:00:00-04:00
sourceurl: https://chrt.fm/track/B8G187/afp-233242-injected.calisto.simplecastaudio.com/c3f82ef9-3595-4b97-95d0-6345a04de11a/episodes/27929c92-d593-4c63-b55c-2009773f1e2e/audio/128/default.mp3?aid=rss_feed&awCollectionId=c3f82ef9-3595-4b97-95d0-6345a04de11a&awEpisodeId=27929c92-d593-4c63-b55c-2009773f1e2e&feed=pXyKXLyJ
word_count: 4292
Welcome to the Feffer on Power Podcast. I'm your host, Jeffrey Feffer. A professor at Stanford University's Graduate School of Business, an author of 16 books on a range of topics including the topic of my over-subscribed MBA class and this podcast, Power. Every other week I talk to someone about their path to power and provide you with practical guidance about how to accelerate your career. Today's guest is John Rossman and I am so pleased to have John on the show. John Rossman is a very famous person. He has written three best-selling books, the Amazon Way, Amazon's 14 Leadership Principles, Think like Amazon, 50-and-1-half ideas to become a digital leader and the Amazon Way on the Internet of Things. His fourth book, Big Bat Leadership, your transformation playbook for winning in the hyper-digital era has just come out. I really wanted to talk to John for two important reasons. Number one, John has written these amazing books on Amazon and is an experienced leader that was left Amazon, but an experienced executive in Amazon. And secondly, Amazon is an interesting organization. It is not only pervasive in every aspect of our lives from their web services product to the fact that they deliver now the marketplace of everything and John, by the way, started Amazon marketplace. But they are also interesting because of their organizational culture and the fact that one year, 12 Stanford MBAs left Stanford Business School graduated, went to Amazon one year later, not one of them was still there. So John's ability to navigate Amazon, John's working with some of the largest and most interesting large companies, gives him, I think, a unique perspective on the topic of this podcast, which is, of course, power. When John and I talked about this and we got ready for this podcast, I said to John, you have children, he said, yes, I have two boys. And I said, John, is you prepare for this podcast, think about you are giving advice to you two sons based upon your experience in big corporate America. What advice would you give them about navigating their careers? And this is an assignment that I think John is embraced. But before we get to that, I would love John to begin by just giving us a brief overview of your career, kind of where you went to college, when you joined Amazon, your trajectory in a couple of minutes. And then we'll get into the discussion of today's podcast. Great. Well, Jeffree's been great getting to know you. Thanks for more to me, me on power. Both my boys now have a copy of your book, seven rules of powers, they're early in their careers, you know, it's always better to influence others through other coaches. And so I put your tool to work with my two adult kids. But my career, so I grew up in Portland, Oregon, I went to Oregon, see university, studied engineering, not too glamorous of an academic background. But I went to Accenture, first out of school, got to see the world, got to do a really interesting integration experience. I was a partner then at Arthur Anderson. I got recruited to join Amazon in early 2002 to start the marketplace business. I ran that. And then I also ran another business called enterprise services. I left Amazon in late 2005. I was a partner for 12 years in a firm called Alvaro's and Marcel. The Gates Foundation was my biggest client, ironically, you know, a restructuring firm. But the Gates Foundation was my biggest client. And it was at the Gates Foundation several years after I left Amazon, one of my clients said to me, he goes, John, you do a nice job of delicately inserting the concepts, the strategies for Amazon and you ought to write a book about it. And I talked him into being my partner on these books. And so we released the Amazon way in 2014. And since then, I do a combination of things I do, keynote speaking, and I work with clients on solving really hard complex problems. At the end of the day, I am a problem solver. That's how I would describe myself. And the more unique and the more complex the problem, I feel the better I am or the more differentiated. And it's great to be here today. Thank you for that. And by the way, you have already done something, which I tell people all the time to do, which is you have put yourself in a position in which you are your own boss. So if you don't like, if you don't like your boss, all you got to do is look in the mirror and give that individual some feedback. I do think that your career and getting out of the large corporates and working for yourself is really an interesting thing to do because that saves you from dealing with you and I are going to talk about and what you have observed over your career, which is of course this ability to navigate organizational politics. I would say I still deal heavily with these factors with my client work. And so, you know, if you participate with a company and their executive team, like you either use or are used as part of their politics and our structure. And it's always a fun way for me to understand a new situation. Like, how do I get things done effectively in a new corporate circumstance with a new group of people. So I'm still heavily influenced by all of these factors. And I've learned a lot from your work. Thank you. So you've seen a lot over your time at Amazon and your time working with your client since Amazon, who are for the most part large organizations, lots of internecine warfare. All kinds of politics going on. What advice would you give to your kids about how to navigate this other than, of course, to read my book or take my class. The way I prepared for this was I came up with six rules and a lie relative to Amazon and managing politics at Amazon. And I think that these lessons translate into almost any circumstance and this kind of how I think about navigating power. So here's the first of those rules, which is, trust trust in transparency sound like such a great attribute to have. But most people don't really understand what trust is trust is about setting expectations and hitting expectations. And if you can trust that somebody sets good expectations and then hits those expectations, you can work together through almost anything. And most people don't actually understand what that word trust is. They think it means something like the trust worthy or something like that that you can actually create a formula. And what most people don't do well is they don't set expectations very well. And when you don't set expectations very well, then you each have a vague understanding of what the expectation is. And that's where so many things go sideways. So rule number one is on trust. Yeah. And I like the emphasis on expectations because if you're not clear about what you're going to deliver and I'm not clear about what I want you to deliver. As you said, we're going to talk past each other. That's for sure. All right. What's rule number two rule number two. And you know, I'm in the change making business, right? Like my job is never to maintain the status quo. It typically isn't at Amazon for people from an NBA program going into Amazon. The job is always about making change and people don't understand risk management very well. And so rule number two is about how to be an active risk manager. And so you need risk like risk is where we create alpha risk is where we create new innovations. And so you have to be extremely good at communicating your concept and where it's going. You have to be very good at teaming network and internal negotiating relatively. So this builds off of the trust aspect of setting expectations. And the next thing you have to do is negotiate and understanding because all of your bigger types of initiatives. You never have those things underneath your control, right? They always span the organization. There's always others along with you that are either impacted or you're dependent upon. And so rule number two is being active and early risk manager. Yep. And it's interesting that you would talk about negotiation. I have a colleague Margaret Neil who until she retired taught negotiation here. And she would say the job of a manager is in fact a negotiate that you're always negotiating. You're negotiating around resources. You're negotiating around expectations are your first rule. You're negotiating around what you're going to give and what you're going to get in every deal. You're going to negotiate over strategy because different people see the world differently depending upon where they sit and what information they're exposed to. And certainly you want to negotiate over the risk and how much risk you want to take and what is going to be risky and what isn't and what you think is going to happen. So that's an interesting rule. And the third rule is. Third rule builds off of those two, which is you have to manage dependencies. So the 14th leadership principle at Amazon is deliver results. And the other ones tend to get the fanfare. But I'm telling you the 14th is the one that differentiates Amazon. Like you have to deliver results. Well, most things are not within your control. Then you're really managing dependencies. And so you see this very active dependency management process. And so it's all based off of kind of trust but verify like you're always featuring the bad news. You're always having check in meetings. You don't trust what they say you ask more for proof points and demonstrations and you don't assume anything. Sometimes that gets into that hedging and creating alternate paths. But people that are successful at Amazon are extremely good at managing dependencies upon others. That's an interesting comment. Organizations are of course, entered dependent systems. At a colleague Jerry Solansik who used to say Enter dependence is why things never turn out the way you want because in fact as you pointed out John and you're completely right. In a large complex system, which is what companies are what all organizations are. Your ability to get things done is not completely under your control. It never is. You never have all of the resources or all the pieces of the technology or all the pieces of the business that you would need in order to get things done. And so therefore your ability to negotiate and manage those dependencies really is critical. And that is, I think, one of the reasons why power and influence becomes so important because you don't control everything. And so therefore, if I'm going to get John to do what I need John to do, I have to be able to influence John. And I have to be able to build a relationship with John so that I can get my job done. So managing dependencies and influence is not optional. It's part of your job. No, especially in the world, you know, I'm an advisor to teams today. I never have any direct control. And so it's always through influence and understanding but personal motivations as well as the corporate motivation that you get things done. And that's really the story you're telling. So rule number four is having the right sense of urgency. So it's not just about having a sense of urgency, but it's the right sense of urgency, the right things at the right time. And people fail on this rule on both sides. They either have too much of an urgency on something that we actually should be patient on. And they have a poor sense of urgency on something that should have more attention and a higher sense of urgency on. And so the sub rules to this or the steps on this are really understanding the critical assumptions are hypotheses, the real risk that you're tackling. And how to bring those forward we really re emphasize this in my current book big that leadership. It's the third critical habit, which is big bet legends accelerate risk and value deferring out other activities until they've tested the high risk notions. So you want to have urgency on those things quick escalation, especially entering a company like Amazon, you probably are an individual contributor. You need to understand how to escalate really effectively to your boss who can help you get these things resolved. You need to be a master of root cause identification to have the right sense of urgency really understand not the surface area, where the veneer of a situation, but what the real root causes. Therefore, you can also influence people better if you understand the root cause. And you know, one of Amazon's leadership principles is built around this, which is about having a bias for action, but it's about having that bias for action on the right things at the right time. Yeah, I agree with that also. It's interesting. There's a soul saying the urgent drives out the important. And to me, that's an aphorism that speaks to people don't have the right set of priorities that they don't actually understand what needs immediate attention and what doesn't. You know, I think doctors are very good in this, particularly emergency room physicians, where you come into the emergency room, you have to figure out breathing first, you know, and then the broken arm later triage triage. Did you have to make sure the things are in the right order? So that's that I think is exactly right. So you have to understand how to prioritize. You have to understand what needs to attention today, what doesn't. I think the phrase you just use with triage. I think that's right. You have to the right sense of organizational triage. I like that. Let's rule five rules vibes. And I caught up with the number of colleagues and people I mentor that are at Amazon to get their sense on a few of these and everything. And the one that came to me from those conversations that I didn't have on my list was rule number five, which is manage up. And all of the people I checked in with talked about how at Amazon, it is a command and control type of organization, talk down, commitments get floated down. And you need to be highly aware of both your direct boss, probably skip level above that and maybe even the SVPs, make sure you understand their goals. And what they're working towards bigger than just what you are working at and understand the context, which your boss, your boss is boss, with their on the accountability list to deliver and where you fit in. It's amazingly smart, just heads up play to truly be managing up, understand their goals bigger than just your own, but a lot of people forget to do that. You know, I would make your rule five rule number one, everyone has a boss, keep your boss happy. If your boss is happy, you're probably going to have a decent career. If your boss is pissed off, you're going to have big trouble. And you're right, your boss's purview extends beyond you and your work. And so therefore, you really need to understand the scope of what they're interested in, you would need to understand their context. And mostly you need to understand that your job, and this is true, whether you're the CEO or wherever you are in the organization, your job is to keep your boss happy. And I have seen so many startup founders are for that matter CEOs lose their jobs because they forget that even though the CEO, they have a board of directors that even though you may be, you know, wherever you are, whatever level you are, everybody has a boss or bosses. And you need to keep the boss satisfied and happy, you need to understand how they're evaluating you, what they're thinking about. So I love your rule five, I would make it rule one and rule six. Rule number clicks is clarified in your communications. So a lot of the Amazon's, I think, real superpower of how to think through very complex operational situations or what we're going to be doing in the future innovation capabilities is based on their working backwards approach, right, which is all about memo writing and debating relative to that. The underlying essence of that in complex topics is you need to be a clarifier in your communication. I have a partner, we were partners together Arthur Anderson before I was at Amazon, we were partners at Al Verismo or sell after Amazon. And the thing Steve always says to me is he goes, when you came out of Amazon, what you're always doing is simplifying and clarifying the meeting, the situation that's at hand. And I think that that is what I figured out I'm extremely good at and that is the real effectiveness driver in these complex situations is how to clarify and simplify the communication. And therefore you can do all these other things, you can set expectations, you can understand the risk, you can manage dependencies, you can have the right sets of urgency, the things, you can manage up, but you can't do those things if you actually don't communicate effectively. And this is what I think Amazon really leads on in both their operational scaling and their innovation. And I like that example and I like that rule of power because it really speaks to I think a capacity that not many people have, which is to look at a situation in order to effectively communicate about that situation, you have to be able to figure out what is really important and what isn't. You have to be able to understand if you will the terrain of that situation and this goes back actually to something you talked about earlier about the right sense of urgency because this also goes back to your ability, which you obviously have and still have as an advisor to large companies. The ability to really see the situation for what it is and not get diverted by unimportant things and get to the essence, what is the essence of the business problem? You know, Peter Drucker in his writing, I think was fabulous at this. He once said I was in a conference with him once and he said, business is actually simple. Every business needs to keep its customers happy. If you keep your customers happy, you'll make money. If you upset your customers and don't deliver value to them, you won't have customers and you'll go out of business. And you know, I think the brilliance of Peter Drucker was he understood the essence of business, you know, it discuss back to the triage notion as well. I think a good doctor understands how to diagnose a patient and you're really talking about in rule six organizational diagnosis. And the killer habit that I learned from Amazon is writing things out as a memo, even if you only do it for yourself. It's a different way to work. It's a different way to think. It's a different way to communicate to others. The one at Pendix, we have in big bet leadership is called why memos and a lightweight version of the research that behind why working in memos is a different way when it's complexity is the rule. How do you get to simplifying the understanding of the situation, simplifying your plan so you can deliver. I think memos is the absolute different way to work and is a difference maker here. You're completely right. Keith Foratzie is a friend of mine who wrote never read alone. When he came to my class said, write things down. You know, he said, if you have a vague understanding of something, maybe you can do a PowerPoint. But the more you write writing will help you clarify as exactly as you suggested writing will help you clarify your ideas and make sure you're communicating them effectively, but it goes back to your point. And there's an exponential curve on this topic, which is the more complex and the more people involved in the situation, the more benefit you get from writing out the memos relative to the situation. Yep, I agree with that. And now you want to finish with with a lie. Okay. So the pretense the setup for this discussion was Amazon's a very political place was I think kind of the general notion of it. And I would say personally, and this is where healthy debate and multiple opinions could lie, Amazon is not a highly political place. It is a political place, but not a highly political place relative to other big corporates. What it is, it's an ambitious organization and it's the ambition that drives high intensity, high accountability, high demands across all of these rules that we've talked about. It is less forgiving than other places relative to its culture and its expectations. And I think that can be easily confused with being a highly political place. But I have clients where you know, if you didn't go to the right school, you are immediately discounted like to me, that's what highly political is is like factors that don't have anything to do with. Are you right? Are you clear? Are you effective? Like that to me is what a highly political organization is. Yeah, I would agree with that. The other aspect of a highly political organization is that your biggest factor in your performance evaluation is your relationship with your boss. You would agree with that. I think I see you're shaking your head. Yeah, I think that's a good way to frame what a highly political situation is versus having more meritocracy to it. Like what did you do contribute? Were you effective in getting things done through others? Yeah, no, I think that's exactly right. Well, you know, this has been an amazing conversation. I very much have enjoyed hearing your perspective on organizational operations and politics from the perspective of someone who has done a lot of consulting with many important organizations in the economy and has this fabulous experience at Amazon. And I'm going to end with one final question, which you can answer or not. Why did you leave Amazon? Oh, great question. Thanks for setting me back on my therapy, you know, and everything, right? But just kidding. So it was a couple of factors. People generally remember the last essentially 14, 15 years where Amazon stock has done nothing but kind of up into the right. There was a nine year period where the stock was effectively flat. That was from 2001 through 2009. I was there in the middle of that. And so as a senior person there, the vast majority of my compensation was based on stock options. It wasn't even RSC use at that point, right? And so with a stock flat, I was losing time in the market relative to my economic opportunity. Nobody at Amazon saw this coming. And the second thing was I wanted more control over the commitments that were being made for me. I wanted to make my own commitments. My boys were six and four at the time. And I ended up leading an effort that was going on in London. I had these clients around the country with Amazon. And I had the opportunity to join a really good firm, a young firm, Alvaro's Marcel. And I just wanted more control. And so those were the reasons that I left Amazon. But obviously I took so much from it. I always joke it was the first time I paid attention in class. And so I took so much from it that obviously impacted the way that I operate. And I got to capture in all these books. Thank you so much. I really understand that in an earlier book on power, I quoted a colleague of mine who said, you can have autonomy or you can have power. You cannot have both. In part, it was an economic decision. But in part, it was also a decision for autonomy. And I completely understand and sympathize with that. This has been the Fefferon Power Podcast where every other week we talk to an interesting person about how to accelerate your career. Today, we've been talking with John Rossman, the author of four books, including his most recent big, bad leadership, your transformation playbook for winning in the hyper digital era. John, thank you for being part of the Fefferon Power Podcast. Thank you. This has been the Fefferon Power Podcast where every other week we talk to an accomplished individual about their path to power and the practical lessons for you. If you enjoyed the episode, please subscribe to the podcast on any of your favorite sources and buy my most recent book on power, Seven Rules of Power. Connect with me on LinkedIn, Twitter, and Geoffreyfeffer.com. Fefferon Power is a production of Stanford University and University FM.