Unpacking Amazon's unique ways of working

There were no performance bonuses. So if I was running the book business and I had a killer year from a financial point of view, there was no extra kicker for me. And if I ran the book business and it had a bad year, there was no financial penalty for me either because our compensation was based on the stock price.

Even if you want to have innovation, even if you really do crave it, you're willing to take the risk, if you don't set up the organization in the right way, you're just not going to get it.

Instead of management, senior management refereeing every item on a roadmap, they're refereeing which teams have how many resources, which is more of like a once or twice or three times a year decision versus refereeing everything on the product roadmap. And then all the resource contention issues, that's a daily issue.

I think the simplest place to go when you see a failed product is to ask yourself, what problem did you solve? And I could get into all kinds of other examples outside of Amazon too, but 9 times out of 10, I think that's where... If it wasn't poor execution, if the product was executed correctly, what was wrong with the concept of the product?

Amazon's flywheel refers to their business model framework from "Good to Great" showing how lower prices lead to more customers, more sellers, lower costs, and back to lower prices.

We identified these things on our flywheel. And this identification of these things was such a critical moment for the company because then it realized, 'Okay. Well, what we need to do is spend our time focusing on how do I measure each one of those things, and then how do I improve each one of those things?'

We're going to start by writing a press release describing the feature and describing it in a way that speaks to the customer and to some degree the external press and world where the idea is, in my description of this, it better jump off the page of something like, wow, as a customer I will really need this.

When you're measuring things, you're trying to understand what actions or reactions are creating the good outputs that you want, revenue, customer growth. But by putting them all together, you basically obfuscate that. And what really we realized is we need to just break each one of these out individually and manage them each in its own way.

Jeff would say, we took it as an article of faith. If we served customers well, if we prioritized customers and delivered for them, things like sales, things like revenue and active customers and things like the share price and free cash flow would follow. So therefore, when we're making a decision thinking about a problem, we're going to start with what's best for the customer and then come backward from there.

There's no day that people will wake up 10 years, 20 years, 30 years from now and say, 'All else equal, I'd rather shop at a store with fewer items than more items or a store with higher prices than low prices or a store where things get to me more slowly versus more quickly.'