Cultivating a Culture of Innovation by Dr. Werner Vogels | The Seamless Podcast

Yeah, there's a famous book, I think by Clayton Christensen, called The Innovator's Dilemma. And he observed that companies that had been successful with their first product actually had trouble with product number two and product number three. They were not going as fast and as successful as product number one. So why was that? And it has to do with the way that we make decisions. Some decisions that you make are what I would call reversible. You can step back. If decisions are reversible, you don't need to have all the information before you can start to get going. And often this is if you build a completely new product and it's the first product you're building, and you're gung-ho because you're really motivated, and you just do it. You take this risk and you move fast, and you make decisions knowing that if it's not really the right decision, I can take two steps back and start again. Nobody's getting hurt. And then there are the other type of decisions, the ones that are irreversible. The things you cannot back out of once you've made that decision. If you sold your car to someone, you can't go there two weeks later saying, 'I changed my mind, I want my car back.' Doesn't work like that. Some decisions are irreversible. That means you need to take time to make that decision, and you need to be deliberate about that. So you need to understand what are the decisions now. Often when you're a young business, your first product, you really know this: you know where you need to move fast, and you know where you need to be a bit more careful. Second product, third product, people are starting to treat reversible decisions as irreversible. Suddenly you're having meetings about everything. Every decision is being taken as if it is irreversible, and we need to talk it to death before we're going to do it. And that means that as a company you become slower, you don't move as fast anymore. So look for those kind of things where you can make fast decisions, because if you messed up, you can get yourself out of it again. And really continue to look for those things that you know here we need to have meetings about, we need to sit down and carefully think about how to do that. Now, let me give you one more mechanism. One more mechanism I really want to get this one out. I don't know how it works in your company, but if someone proposes something new, there's always somebody in the room that says, 'That won't work, our customers won't like that,' or 'Oh, that won't scale.' And these are just what I would call throwaway statements. You just take them, and suddenly the person that proposes something new has to do all the work to convince everybody that sort of claims to know that it won't work. So at Amazon we've turned this one around. It's called the institutional yes. You propose something new. If someone objects to it, they need to do the work. They need to really work to write a document why we should not be doing this. Takes care of 95% of all objections. It does mean that we probably are doing things we shouldn't be doing sometimes. Also, if someone does write that document, you better pay attention, because probably someone has an insight that you didn't have. Now, documents play an extremely important role within Amazon. Meetings, I don't know how you have meetings at Amazon. Meetings: no PowerPoint, no presentations. Why? Because if you do a presentation, you can fake it. You can make broad statements on slides without going really into details. By the way, half of the room is probably arguing with you when you're at slide number three, the other half of the room is on their phone. What we do at Amazon, we have a process called the six-pager. People have to write a document instead of presenting. What then happens: the first 20 minutes of a meeting we read this document in silence. After that 20 minutes, everybody has exactly the same information, and you can have a very informed, high-quality decision-making process. It is also very hard to write those documents, because if you don't have clarity of mind, it is very hard to write a clear document. So if you want to propose something that's half-baked, you write this document and you look at it yourself, you put it in the drawer, you wait a few days, you read the document and go like, 'I don't know yet.' So writing not only that the process seems to be a bit heavyweight, but it means that the proposals come to you, if it's right, very high quality, well thought of, clarity of thought, and you can have a very high-quality process of decision-making. By the way, I've been in enough meetings where after reading two pages of document you go like, 'Maybe you should try this again.' Because there are obvious ways, like making using data, but using data in a way that actually hasn't any basis, like sort of broad statements like '75% of customers like this.' Oh, where did you get that from? How do you know that? Things like that. So it is a heavyweight process. Also means that if you do quite a few of these meetings, I don't have to read before I go into a meeting. Would it be the first time that you come? I mean, if you have to have read documents before you go into a meeting, you ask everybody in the meeting, 'Have you read the document?' and everybody says yes, and half of them are lying. Or you skimmed the document. So like, 'Oh yeah, I know this, oh we're going to talk about that one.' And so as such, you know, the other thing is high-quality decision-making before 12:00. Your mind is much fresher in the morning to take very high-quality decisions and take this information into you. So if you need to make hard decisions, make them in the morning, when your brain is still operating at full scale. And wait a bit. It doesn't mean that the afternoons are useless, but the pure creativity in your head sometimes is just better in the early mornings.