Key components of a world-class operating plan
When I joined Amazon in 1999, we did not build good operating plans. By the time I left in 2015, our plans were world-class. Here are the components of a great plan so you can skip the 15 years of work that it took us to figure it out: 1) Introduction The Introduction is very […]
by Bill Carr
Understanding the investment envelope in annual planning
At Amazon, one of the most important and misunderstood parts of the Annual Operating Plan is the Investment Envelope. When done right, it aligns executive priorities with the plans of each business unit. When skipped or rushed, it leaves teams planning in a vacuum. The Investment Envelope is the first major step in the OP1 […]
by Bill Carr
Building an effective annual planning calendar at amazon
We iterated and improved Amazon’s annual planning process over many years. One of the mistakes we made early on was not setting out a hyper-detailed calendar for each step of this complex process. Without this detailed calendar, the process could be super frustrating for operating teams who felt whiplashed by ever-changing deadlines, templates, and expectations. […]
by Bill Carr
How amazon executives review and evaluate operating plans
When I was at Amazon, Annual Operating Plans (OP1) went through multiple rounds of review before being finalized, first with the VP who owned the function, then with their SVP, and finally with Jeff Bezos and the S-team. Once each OP1 document was completed, it was up to each Amazon Executive leader (the S-team) to […]
by Bill Carr
How to write a vision document for strategic planning
A key part of a strong operating plan is the Vision Document. Vision Planning is an optional step in Amazon’s Annual Operating Planning process, but I recommend it to all teams. Here’s why and how you can write yours: A Vision Document allows a team to zoom out from the typical 12-to-18-month operating window and […]
by Bill Carr
Dos and don’ts of creating a strong annual operating plan
At Amazon, the Annual Operating Plan was a mechanism to align on initiatives, allocate resources, and assign ownership. The best plans followed a few essential practices and avoided several common pitfalls. Here are the most important Dos and Don’ts. 1) Do: Lead with Metrics The best plans start with controllable input metrics. Begin by clarifying […]
by Bill Carr
Refining amazon’s retail growth flywheel strategy
Amazon has one of the clearest, most effective, and durable strategies in the history of business. However, after working there for 15 years and doing years of advisory work, I think it can be even better. I would make two changes: 1) Remove “Traffic” 2) Define the term “Customer Experience.” Amazon’s retail growth flywheel has […]
by Bill Carr
The history and impact of amazon’s bar raiser hiring program
One famous Amazon process is the “Bar Raiser” system for hiring. It was developed around 1999 as a response to the hiring challenges that came with rapid scaling. Here is some history and how you can choose bar raisers to maintain quality hiring as you scale: 1) How and why the Bar Raiser program was […]
by Bill Carr
Why amazon’s fitness function failed and what replaced it
A predecessor to Amazon’s successful system of measuring input metrics was the attempted “fitness function.” The goal was to create a composite metric for business performance, and it was a disaster. Here’s why: The fitness function was an idea formed by senior leadership, and it came alongside the creation of two-pizza teams—autonomous, single-threaded teams. The […]
by Bill Carr
Amazon’s process innovations from 2001 to 2005 explained
Amazon’s most innovative systems were all invented or refined during a remarkable 4-year window from 2001-2005. Here is what led to such a fruitful environment for process innovation. The processes invented during this time include Working Backwards, Single-Threaded Leaders, Two-Pizza Teams, Input Metrics, and 1-way/2-way Doors. They came about like this: First, Jeff Bezos fostered […]
by Bill Carr