The Amazon Management System . Ram Charan

management. Once business outgrows personal and organizational capabilities, growth momentum will slow down, and in some cases, the companies may even collapse.

      Bezos is the opposite. As founder and CEO of Amazon, he has the rare combination of a visionary leader and a down-to-earth builder obsessed with the organization and how it should be run. He is the mastermind behind the design of Amazon’s digital management system, and also the field marshal who forcefully and personally drives the enforcement.

      Why so much effort personally? Because Bezos knows too well that a business model without the right management system won’t fly.

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      To realize his dream, Bezos needs to build a continuous invention machine, a consistent and effective mechanism of high-quality and high-velocity decision-making, and an AI-powered data and metrics system to track, measure, analyze real-time data and automate routine decisions for ultimate speed and quality, while at the same time vigilantly guard against bureaucracy and complacency. Otherwise his company will creep onto the treacherous slippery slope called “Day 2,” thus burying his aspirations of a forever-Day-1 organization.

      This is an endeavor way beyond any single person’s capacity. It requires the combined force of a team or an army of the right people to create a “phenomenon of nature.”

      So who are the right people by the Amazon standards, and how to find them, motivate them and retain them? In the next chapter, let’s explore how Amazon builds its continuous bar-raising talent pool.

REFLECTIONS AND IDEAS TO CONSIDER FOR YOUR COMPANY

      Chapter Highlights

      Building Block 2

      Amazon’s talent pool is carefully defined, meticulously documented, and rigorously chosen; coupled with complete end-to-end follow-through and feedback to ensure continuous bar-raising, both for the talent pool itself and for the self-reinforcing mechanism of talent acquisition and retention.

      Define the right talent

      The builders

      The owners

      The mental toughness

      Recruit the right talent

      The bar raisers

      The rigorous process

      The self-selecting mechanism

      Motivate and retain the right talent

      Dreamland for the builders

      Paradise for the ambitious

      The high standards

Fight for the top talent

      Building Block 2:

      Continuous Bar-Raising Talent Pool

      History tells us that most people who have come up with fascinating new ideas have failed. Why? Because they remained primarily as dreamers themselves, and lacked the solid grip on execution required to convert their dreams into reality as builders do.

      Bezos is rare among visionaries, for in addition to having 20-20 insight into what will transpire, he is also a builder and also a man of his words. His relentless commitment to excellent execution enables him to cut through all factors on the surface and get straight into the single most important factor accountable for success: the right people.

      That’s why back in 1994, before informing his colleagues at D. E. Shaw and Co. of his decision to leave his lucrative job on Wall Street to start his own company, Bezos made a special trip from New York to California to conduct his first round of interviews for experienced programmers. Luckily he lured Shel Kaphan, a startup veteran and a technical genius, to be the first employee of Amazon. Since then he has consistently filled the talent pipeline with individuals who have provided immeasurable value to the company.

      It’s also why if you ask Bezos what the most important decision is at Amazon, his answer will be and has always been from the very beginning: hiring the right talent.

      Many Amazon people will recall Bezos repeatedly telling them so. In fact, Bezos has gone so far as to say that “It’s better to let the perfect person go than to hire the wrong person and to deal with the ramifications.”1