In Andy Jassy’s first letter to Amazon shareholders, he writes that it took 18 hours to get an order through fulfillment in the early 2000s. By 2022, the same process took only 2 hours. He explains how the company made such incredible improvements:
“Going back to the pandemic, there’s no way we could have started working on our fulfillment network in March 2020 and satisfied anything close to what our customers needed. We’d been innovating in our fulfillment network for 20 years, constantly trying to shorten the time to get items to customers… It’s been hard-earned by putting ourselves in the shoes of our customers, knowing what they wanted, organizing Amazonians to work together to invent better solutions, and investing a large amount of financial and people resources over 20 years… This type of iterative innovation is never finished and has periodic peaks in investment years… but leads to better long-term customer experiences, customer loyalty, and returns for our shareholders.”
The speed and accuracy of Amazon’s fulfillment network are a perfect example of the management style that was pervasive during my time at Amazon. Jeff, Andy, and the other Execs at Amazon were deeply influenced by the findings of Jim Collins’ research, as outlined in his exceptional management book “Good to Great.”
Collins used the analogy of a flywheel to describe how exceptional companies operate differently from average companies:
“Picture a huge, heavy flywheel—a massive metal disk mounted horizontally on an axle, about 30 feet in diameter, 2 feet thick, and weighing about 5,000 pounds. Now imagine that your task is to get the flywheel rotating on the axle as fast and long as possible. Pushing with great effort, you get the flywheel to inch forward, moving almost imperceptibly at first. You keep pushing and, after two or three hours of persistent effort, you get the flywheel to complete one entire turn. You keep pushing, and the flywheel begins to move a bit faster…You keep pushing… Three turns … four … five … six … the flywheel builds up speed … seven … eight … you keep pushing … nine … ten … it builds momentum … twenty … thirty … fifty … a hundred.”
Exceptional companies have a simple, clear, and consistent approach. They focus on just one or a few things to create value. They don’t change these each year; they set goals and strategies based on clear thinking, not bravado. They don’t seek to achieve their goals with a single push, but rather through continuous effort over decades, one improvement at a time.
On the outside, it seems like this all happens in a single moment. And because of this, many executives seek to transform their business overnight.
As Andy explains, that isn’t how it works. It requires years of hard work, one push of the flywheel at a time. But over time, you gain momentum, and the flywheel spins faster and faster.
