Working Backwards summary

In too many companies, business-critical decisions are treated as trivial. Imagine you’re a senior leader tasked with buying a multi-million-dollar factory to manufacture your company’s products. The decision you make will have a significant impact on the company’s bottom line for years to come, so you should have a rigorous process to ensure that you choose the right factory. 

Yet when it comes to hiring the right people, many companies have no rigor in their recruitment processes at all. This is a big problem. After all, your hiring choices also affect your company’s performance in the long term. That’s why Amazon is so precise in its recruitment decisions. 

What does a meeting at Amazon look like? The answer might surprise you. For starters, there are no PowerPoint presentations – ever. Second, the first twenty minutes of every meeting is spent in total silence. This silence is the key to Amazon’s effective decision-making. 

Jeff Bezos decided in 2004 that PowerPoint was derailing his senior management meetings. Up until then, every week, his senior managers took turns standing up and presenting on an important topic. But these presentations often weren’t effective. To truly understand the topic at hand, the attendees needed to examine a lot of information. Not only that, but they also needed to explore this information in depth, so that they could understand how different ideas and pieces of data fitted together. 

What does working backwards mean? At Amazon it means thinking of the customer first. When Amazonians develop ideas for new products, they don’t start by thinking about Amazon’s needs and capabilities. Instead, they only consider what would make their customers’ lives better. 

Once they’ve hit upon an answer, they work backwards to make the customer-centric product a reality.

In 2004, Amazon had a problem. Its e-commerce sales were growing in every category, but its rate of growth was slowing. At the same time, the global e-commerce market was getting bigger every year. If things continued as they were, Amazon was going to become a smaller and smaller player in an ever-larger industry. Luckily, Jeff Bezos had a plan that would change Amazon’s fortunes, and change the face of e-commerce, forever. 

Bezos eventually realized that Amazon’s biggest stumbling block wasn’t its pricing or its product range; it was its convenience – or the lack of it. 

Not even Amazon gets things right all the time. In 2005, senior managers were on stage at an Amazon launch party. The product they were launching was called Unbox, a service that would enable customers to download films and tv shows and watch them on their PCs. At the launch, the audience was given a demonstration of how Unbox would work. As a movie was downloaded and flickered onto a big screen, the audience laughed nervously; the image was upside down. It was an omen of things to come.

The key message is this: Amazon’s first video-on-demand service ignored the company’s leadership principles. 

Amazon doesn’t mind being misunderstood. In 2005, Apple unveiled iTunes, the groundbreaking application that would allow customers to buy and store music digitally. Within months, senior leaders from across the music industry were asking Jeff Bezos when Amazon would release its own digital music product and start competing with Apple. Some music executives even tried to goad Bezos into action. But Bezos wasn’t thinking about the music industry at all. Instead, he was thinking about books. 

Rushing to create a copycat digital music product to compete with iTunes would have gone against Amazon’s leadership principles. If Amazon had focused on rivaling Apple’s iTunes offering, it would have been prioritizing the competition and not its customers. After all, iTunes was a fantastic product. Were customers really yearning for an alternative?