How Amazon’s compensation drives long-term thinking
Most companies’ compensation models push their employees to optimize for the short term. Annual compensation incentivizes us to think about the next 12 months, not the next 12 years. Here’s how Amazon pays people differently to make them think differently. In most companies, you set annual goals, pay employees annually, and tie bonuses to annual […]
by Bill Carr
Amazon’s correction of error process for lasting improvement
At Amazon, the Correction of Error (COE) process is a structured, scalable tool designed to ensure that customer-impacting problems are not only fixed, but truly understood. Here’s a template any company can use: Most companies will execute “post-mortems”—focusing on addressing symptoms. In contrast, Amazon’s COE framework insists on identifying and eliminating root causes. The approach […]
by Bill Carr
Avoiding common pitfalls in setting effective OKRs
During my 15 years at Amazon, we did not use OKRs. However, many other successful companies, like Google and LinkedIn, use OKRs. So, it must be effective… right? I haven’t worked for a company using OKRs, so I can’t provide an honest assessment. But, since my time at Amazon, I have advised CXOs at dozens […]
by Bill Carr
Jeff Bezos and the power of long-term thinking
I spent thousands of hours in meetings with Jeff Bezos. I learned so much about the modes of thinking he applies to problems and opportunities. One of his most remarkable modes of thinking is a longer time scale than most humans. Here’s an example: Jeff is funding the construction of a 10,000-year clock. It’s being […]
by Bill Carr
How Amazon uses input metrics to drive results
One of the most common mistakes that companies make is to focus too narrowly on a small set of metrics while overlooking the broader ecosystem of inputs that drive results. At Amazon, we rejected the conventional wisdom that Executives should focus on just a few high-level metrics. Instead, we spent years developing mechanisms to measure, […]
by Bill Carr
Why great leaders rely on judgment over perfect data
Jeff Bezos taught me that the best leaders don’t wait to have 100% of the data to make decisions. That either takes too long or is impossible. Data and research don’t deliver decisions—good decisions are the products of good judgment. Jeff said it is best to make decisions with ~70% of the data needed, otherwise […]
by Bill Carr
How Amazon’s simple flywheel drives long-term success
I joined Amazon in 1999. In those early years, Jeff and the leadership team would tweak our strategy every year. Often, the strategy revolved around very specific goals for the next year. This changed in 2002. The “old way” was consistent with how many companies operate. They update or revise their strategy annually. We stopped […]
by Bill Carr
Understanding Amazon’s enduring growth flywheel strategy
Jim Collins’ book “Good to Great” introduced the concept of a growth flywheel to Amazon leaders. The model describes a set of reinforcing activities that drive sustained business success. Amazon’s core flywheel consists of three primary inputs: 1. Selection – Increasing the number of available products makes Amazon more attractive to customers. 2. Cost Reduction […]
by Bill Carr
Six principles for writing effective business reviews
A well-written Monthly or Quarterly Business Review (M/QBR) will increase the CEO’s confidence in your leadership and decision-making. Based on my 15 years at Amazon and four years advising companies on Amazon principles, here are the six key principles for writing effective M/QBRs: 1. Start with Input Metrics → Weak M/QBRs focus exclusively on output […]
by Bill Carr
The precision of executive communication at Amazon
There is a common idea that executive communication needs to be short and high-level, not detailed or “in the weeds.” Hence the term “executive summary.” This is not true at Amazon. Executive communication at Amazon is built on examining issues with precision, based on data and in-depth analysis. This is one of the mechanisms that […]
by Bill Carr