Many people are surprised that the Amazon S-Team does not spend their meetings talking about big picture or high-level strategy issues. Jeff Bezos explained exactly why this is the case:
“We’ve already done the hard work of identifying what we need to do for the year in our annual planning process. Our job as the S-Team is to make sure those things happen. So let’s devote 75% of our meeting time to making sure we execute well on those goals.”
As Amazon scaled, so did the number of goals. When it came to monitoring our progress toward our goals, Jeff insisted that the entire S-Team attend the meeting, even though not every member would have relevant input on every topic or S-Team goal. For example, the SVP of Sales, the CFO, and the General Counsel are unlikely to weigh in on a review of the IT Infrastructure engineering team’s goals.
In the short term, this is painfully inefficient. Busy executives have no shortage of problems to resolve in their organizations, rather than sitting and listening to reviews that don’t involve them.
But in the long term, this approach proved highly effective, yielding a leadership team with a detailed understanding of the company’s goals and the operational challenges of achieving them. The process prepared the S Team to perform at its best when it mattered most — to help Jeff make consequential, one-way-door decisions each year.
The S-Team didn’t expect to hit 100% of its goals each year. The target was directional accuracy, and on average, about 70% of the goals were achieved annually. Some missed goals required additional quarters to reach the desired outcome.
S-Team reviews were conducted on a rolling basis to review every S-Team goal at least once. With hundreds of goals (452 S Team goals in 2010), this work occupied “75% of meeting time”—three hours per week devoted to deep dives into progress toward the most important goals.
Contrary to expectation, these meetings weren’t spent reviewing financial results. The S-Team goals focused on controllable input metrics and improvements to the customer experience, including maintaining high in-stock levels for the most popular items, improving delivery speed, quality, and cost, and building new products, processes, or geographies.
Green goals weren’t discussed. The meetings zeroed in on yellow and red goals. The VP who owned each goal came prepared to explain the status of each goal and present a specific plan to get any that were “yellow” or “red” back on track.
These VPs were expected to know the details of their work and be prepared for a rigorous cross-examination by Jeff and other S-Team members. There was no tolerance for improvised or vague answers.
The structure of these S-Team reviews reinforced the importance and integrity of the goals set in the annual operating planning process. Considerable time and effort went into each of these each Fall, and we would stick to our planned goals while maintaining flexibility to adapt to new information.
