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Pendekatan Working Backwards

Metode Working Backward adalah kerangka kerja yang berguna untuk membangun produk, yang dimulai dengan mendefinisikan karakter dan permasalahan pelanggan, merumuskan hipotesis hasil jadi produk, kemudian bekerja dengan alur mundur hingga tim mencapai kejelasan pemikiran tentang produk yang harus dikembangkan.

Kerangka kerja ini secara utuh berfokus pada kebutuhan customer.

Framework ini digunakan untuk mendapatkan kejelasan dimana fokus utamanya adalah untuk memenuhi kebutuhan dan keinginan pelanggan, bukan untuk mendokumentasikan apa yang telah diputuskan untuk dilakukan

Dalam Metode Working Backwards terdapat tiga dokumen yang dirumuskan untuk membentuk satu gambaran solusi inovasi yang matang. Ketiga dokumen ini berbentuk narasi dan visual untuk memastikan innovator tidak memberikan penjelasan yang ambigu akan produk yang dikembangkan. Ketiga dokumen ini juga terus diiterasi sesuai dengan insight dari customer seiring perkembangan produk.  Ide utama Bezos ada pada iterasi artefak Working Backwards yang lebih mudah dilakukan ketimbang iterasi pada produk, sehingga pengembangan  produk sudah matang sejak awal, ketiga dokumen ini yakni:

1. Press Release

2. FAQ List

3. Visual Story Board / Mockup / Prototype

Namun, dalam penyusunan ketiga dokumen ini dilakukan proses validasi permasalahan dan solusi yang dijabarkan melalui Five Customer Questions. Kelima pertanyaan ini akan mempertajam pemahaman innovator akan identitas customer dan berempati akan permasalahan yang dihadapinya dalam situasi tertentu.

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FAQ Amazon adalah dokumen kunci dalam product discovery atau working backwards process, yang digunakan untuk memastikan bahwa semua pemangku kepentingan memiliki pemahaman yang sama tentang gagasan tersebut.

Ini adalah titik awal untuk semua dokumen dan market produk lainnya.

Dokumen FAQ harus dapat menjawab pertanyaan dari eksternal/customer dan internal/stakeholder pengembang

Dokumen pertanyaan umum (FAQ) include 2 customer utama :

FAQ eksternal (pertanyaan yang mungkin  terima dari pelanggan masa depan)

FAQ internal (pertanyaan yang mungkin diterima dari tim yang berdekatan, pemangku kepentingan fungsional yang berbeda, dan sebagainya).

FAQ ini terutama berupa pertanyaan hard question, mencakup semua pertanyaan yang mungkin ditanyakan oleh para eksternal atau internal, seperti 'Seberapa besar pasar ini? Menurut Anda mengapa Anda dapat mengenakan harga tersebut?  Apakah proyek ini akan menguntungkan? Apakah hal ini berdampak pada tim atau departemen lain?’.

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Dokumen Press Release dirumuskan sebagai suatu pengumuman berupa narasi dengan maksimal satu lembar atas produk inovasi baru, bernilai, dan dapat dipahami oleh target pelanggannya.

Untuk menghindari ambiguitas Press Release menghindari jargon dan penyampaiannya lugas dan jelas.

Dokumen Press Release terdiri dari:

1. Headline, nama produk yang mudah dipahami oleh pembaca (yaitu target customer).

2. Subheading, jelaskan pasar untuk produk tersebut dan manfaat apa yang customer dapatkan dalam bentuk deskripsi satu kalimat di bawah judul.

3. Summary, berikan ringkasan produk dan manfaatnya. Asumsikan pembaca tidak akan membaca bagian dari press release lainnya, sehingga summary harus dibuat menarik.

4. Problem and Opportunity, permasalahan dan potensi customer yang dihadapi

5. Solution, penjabaran mengenai bagaimana produk inovasi menyelesaikan permasalahan customer

6. Leaders Testimonial, hipotesis testimoni dari Top Management mengenai produk yang dikembangkan

7. Customer Experience, hipotesis testimoni dari customer mengenai produk yang dikembangkan

8. Call to Action, akhiri dan berikan petunjuk ke mana pembaca harus melanjutkan.

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Five Customer Questions tersebut adalah:

Who is the customer, and what insights do we have about them?

Siapa pelanggannya, dan karakter apa yang tergambarkan dari mereka?

Menetapkan target pelanggan secara spesifik dan menjabarkan karakter dan kebutuhannya

What is the prevailing customer problem or opportunity?

Apa masalah atau peluang pelanggan yang ada?

Penjabaran permasalahan atau peluang yang dihadapi pelanggan dalam suatu situasi saat pelanggan memiliki kebutuhan tertentu

What is the solution and the most important customer benefit?

Apa solusinya dan manfaat terpenting bagi pelanggan?

Identifikasi solusi inti yang ditawarkan oleh produk atau layanan dalam menentukan manfaat utama bagi customer.

How do we describe the solution and the experience to customers?

Bagaimana kami menjelaskan solusi dan pengalaman kepada pelanggan?

Bahasan strategi komunikasi yang digunakan untuk menyampaikan nilai solusi dan pengalaman keseluruhan pelanggan.

How do we test the solution with customers and measure success?

Bagaimana kita menguji solusi dengan pelanggan dan mengukur keberhasilan?

Pendefinisian metode dan metrik yang digunakan untuk menguji solusi dengan pelanggan sebenarnya dan menentukan efektivitasnya.

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Untuk perkenalan dapat dibaca dulu dari sini

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The Amazon working backward method is a product development approach that starts with the team imagining the product is ready to ship.

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Dalam Working Backward Visual membantu dalam proses mengilustrasikan ide dengan lebih baik dan membantu semua orang mendapatkan ide yang lebih mendalam tentang seperti apa ide tersebut dalam praktiknya.

Ada beberapa cara melakukan hal ini, mulai dari storyboard, hingga wireframe atau low fidelity.

Tergantung pada produknya dan bagaimana menurut Anda cara terbaik untuk menyampaikan ide tersebut.

(Jelaskan alur dalam bentuk narasi/story dan Lampirkan link dokumen visual anda dibawah ini )

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Buatlah Dokumen FAQ untuk calon customer, minimal 10 QnA

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Buatlah dokumen Press Release disini

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Who is the customer and your insight ?

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summary dari buku working backwards

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The Book in a Few Sentences

If you love business, and life, this book contains more wisdom than meets the eye. For the first time ever, Amazon's 14 leadership principles are illustrated with real-world in-the-room examples. Written by former executives who worked directly with Jeff Bezos. This insider's guide shares what "Being Amazonian" is like.

Working Backwards summary

This is my book summary of Working Backwards by Colin Bryar & Bill Carr. My summary and notes include the key lessons and most important insights from the book.

Introduction

Part One: Being Amazonian

Introduction to Part One

Hand in hand with the Leadership Principles go the mechanisms, which we also discuss in chapter one. These are he consistent, repeated processes that ensure the Leadership Principles are reinforced year to year and day to day in the company.

The Bar Raiser provides teams with methods to make the strongest hires efficiently and quickly, but without cutting corners.

The basic premise is, for each initiative or project, there is a single leader whose focus is that project and that project alone, and that leader oversees teams of people whose attention is similarly focused on that one project.

We found, instead, that a six-page narrative by a given team is the method that best enables everyone in a meeting to get up to speed quickly and efficiently on the project that team is working on.

Our emphasis is on what we call controllable input metrics, rather than output metrics.

1: Building Blocks

Leadership Principles and Mechanisms

From the tone of customer emails to the condition of the books and their packaging, Jeff had one simple rule: "It has to be perfect." He'd remind his team that one bad customer experience would undo the goodwill of hundreds of perfect ones.

Another of Jeff's frequent exhortations to his small staff was that Amazon should always underpromise and overdeliver, to ensure that ensure that customer expectations were exceeded.

Because these processes and practices are embedded in every meeting, document, decision, interview, and performance discussion, following them becomes second nature over time. And any employee who violates them draws attention to themselves like a person loudly scratching their fingernails across a chalkboard.

"Leaders do not believe their body odor smells of perfume."

In early 2005, with the principles completed, Jeff sent an email to all managers at Amazon, formally announcing the ten Amazon Leadership Principles.

"Leaders have relentlessly high standards-many people may think these standards are unreasonably high."

Another important Amazon phrase often appears alongside the Amazon Leadership Principles and key tenets: "Unless you know better ones." This reminds people to always seek to improve the status quo.

Amazon now has 14 Leadership Principles.

The longer you work at Amazon, the more these 14 principles become part of you and how you look at the world.

If you expose the workings of any major Amazon process, you'll see these principles playing a prominent role.

Amazon's Leadership Principles are the company's living, breathing constitution.

Amazon's Leadership Principles

1. Customer Obsession. Leaders start with the customer and work backwards. They work vigorously to earn and keep customer trust. Although leaders pay attention to competitors, they obsess over customers.

2. Ownership. Leaders are owners. They think long term and don't sacrifice long-term value for short-term results. They act on behalf of the entire company, beyond just their own team. They never say, "that's not my job."

3. Invent and Simplify. Leaders expect and require innovation and invention from their teams and always find ways to simplify. They are externally aware, look for new ideas from everywhere, and are not limited by "not invented here." As we do new things, we accept that we may be misunderstood for long periods of time.

4. Are Right, A Lot. Leaders are right a lot. They have strong judgment and good instincts. They seek diverse perspectives and work to disconfirm their beliefs.

5. Learn and Be Curious. Leaders are never done learning and always seek to improve themselves. They are curious about new possibilities and act to explore them.

6. Hire and Develop the Best. Leaders raise the performance bar with every hire and promotion. They recognize exceptional talent, and willingly move them throughout the organization. Leaders develop leaders and take seriously their role in coaching others. We work on behalf of our people to invent mechanisms for development like Career Choice.

7. Insist on the Highest Standards. Leaders have relentlessly high standards-many people may think these standards are unreasonably high. Leaders are continually raising the bar and drive their teams to deliver high-quality products, services, and processes. Leaders ensure that defects do not get sent down the line and that problems are fixed so they stay fixed.

8. Think Big. Thinking small is a self-fulfilling prophecy. Leaders create and communicate a bold direction that inspires results. They think differently and look around corners for ways to serve customers.

9. Bias for Action. Speed matters in business. Many decisions and actions are reversible and do not need extensive study. We value calculated risk-taking.

10. Frugality. Accomplish more with less. Constraints breed resourcefulness, self-sufficiency, and invention. There are no extra points for growing headcount, budget size, or fixed expense.

11. Earn Trust. Leaders listen attentively, speak candidly, and treat others respectfully. They are vocally self-critical, even when doing so is awkward or embarrassing. Leaders do not believe their or their team's body odor smells of perfume. They benchmark themselves and their teams against the best.

12. Dive Deep. Leaders operate at all levels, stay connected to the details, audit frequently, and are skeptical when metrics and anecdotes differ. No task is beneath them.

13. Have Backbone; Disagree and Commit. Leaders are obligated to respectfully challenge decisions when they disagree, even when doing so is uncomfortable or exhausting. Leaders have conviction and are tenacious. They do not compromise for the sake of social cohesion. Once a decision is determined, they commit wholly.

14. Deliver Results. Leaders focus on the key inputs for their business and deliver them with the right quality and in a timely fashion. Despite setbacks, they rise to the occasion and never settle.

15. Strive to be Earth's Best Employer. Leaders work every day to create a safer, more productive, higher performing, more diverse, and more just work environment. They lead with empathy, have fun at work, and make it easy for others to have fun. Leaders ask themselves: Are my fellow employees growing? Are they empowered? Are they ready for what's next? Leaders have a vision for and commitment to their employees' personal success, whether that be at Amazon or elsewhere.

16. Success and Scale Bring Broad Responsibility. We started in a garage, but we're not there anymore. We are big, we impact the world, and we are far from perfect. We must be humble and thoughtful about even the secondary effects of our actions. Our local communities, planet, and future generations need us to be better every day. We must begin each day with a determination to make better, do better, and be better for our customers, our employees, our partners, and the world at large. And we must end every day knowing we can do even more tomorrow. Leaders create more than they consume and always leave things better than how they found them.

The nature of the Amazon Leadership Principles is borne out in processes and practices throughout the company.

Mechanisms: Reinforcing the Leadership Principles

There's a saying often heard at Amazon: "Good intentions don't work. Mechanisms do."

Amazon realized early on that if you don't change the underlying condition that created a problem, you should expect the problem to recur.

Over time, Amazon refined such broad goals into a longer list of increasingly detailed objectives. Examples have included:
revenue growth targets by geography and business segment; operating leverage targets; improving productivity and giving back those savings to customers in the form of lower prices; generating strong free cash flow; and understanding the level of investment in new businesses, products, and services.

Once these high-level expectations are established, each group begins work on its own more granular operating plan-known as OP1-which sets out the individual group's "bottom-up" proposal.

Through the narrative process (described in chapter four), Amazon aims to evaluate about ten times as much information as the typical company does in a similar time frame.

The main components of an OP1 narrative are:

S-Team Goals

Amazon Compensation Reinforces Long-Term Thinking

2: Hiring

The Effects of Personal Bias and Hiring Urgency

According to Sequoia capital, the average start up in Silicon Valley spends 990 hours to hire twelve 12 software engineers!

It takes almost no time to spot the superstars and to weed out the duds, but the majority of candidates, alas, Falls somewhere in between, and that is when biases tend to kick in.

Another force that works against successful hiring is the lack of a formal process and training.

Brent Gleeson, a leadership coach and Navy SEAL combat veteran, writes, "Organizational culture comes about in one of two ways. It's either decisively defined, nurtured and protected from the inception of the organization; or-more typically-it comes about haphazardly as a collective sum of the beliefs, experiences and behaviors of those on the team. Either way, you will have a culture. For better or worse.

Hiring at Amazon Before the Bar Raiser

The Bar Raiser Solution

There are eight steps in the Bar Raiser process:

Job Description

At Amazon, it is the hiring manager's responsibility to write the description, which the Bar Raiser can review for clarify. A good job description (JD) must be specific and focused.

The hiring process will inevitably run into trouble-even fail-if the JD does not clearly articulate the job responsibilities and required skills period

Resume Review

The recruiter-usually but not always an Amazon employee-and the hiring manager search for candidates by networking, using LinkedIn, and reviewing the resumes collected in response to a job posting. The recruiter selects the most worthy candidates based on how their resumes fulfill the job requirements as defined in the JD.

Phone Screen

In-Hour Interview Loop

1. Behavioral Interviewing

The method that Amazon interviewers use for drilling down goes by the acronym STAR (Situation, Task, Action, Result):

2. The Bar Raiser

The Bar Raiser is involved in every interview, and ensures the process is followed and bad hiring decisions are avoided.

Bar Raisers are trained to become experts in every aspect of the interviewing process.

Written Feedback

Debrief/Hiring Meeting

Once the in-house interviews are complete in the written feedback and votes have been collected, the interviewers get together in person or via video conference to debrief and make a hiring decision.

The Bar Raiser leads the meeting, which should be held as soon as possible, usually no more than a few days after the interviews have been completed.

The meeting begins with everyone reading all the interview feedback.

"Now that everyone has had a chance to read all the feedback, would anyone like to change their vote?"

There is no shame in changing your vote based on the presence of additional data.

Another method for the Bar Raiser to help get the meeting started is to create a two-column list on a whiteboard of Leadership Principles where the candidate meets the bar in one column and falls short and the other.

The meeting is concluded with a decision from the hiring manager (validated by the Var Raiser) to hire or not hire. If the hiring manager or Bar Raiser feels that they don't have enough information to make a decision, then there was a failure in the process upstream.

It is extremely rare for a Bar Raiser to exercise their veto power.

The role of the interviewers is to help the hiring manager gather data and make an informed decision, not to block the hire.

The best practice for the hiring manager is to listen and learn to speak infrequently.

Reference Check

One question that often gets a telling response is, "If given the chance, would you hire this person again?" Another is, "Of the people you have managed or worked with, and what percentile would replace this candidate?"

Offer Through Onboarding

Hire and Develop the Best

The Amazon Bar Raiser process has been instrumental in reinforcing a key Amazon Leadership principle: Hire and Develop the Best.

Ideally, the bar continues to be set higher, so much that, eventually, employees should be able to say to themselves, "I'm glad I joined when I did. If I interviewed for a job today I'm not sure I'd get hired!"

3: Organizing

Separable, Single-Threaded Leadership

With all other things being equal, the organization that moves faster will innovate more, simple because it will be able to conduct a higher number of experiments per unit of time.

The answer lies in an Amazon innovation called "single-threaded leadership," in which a single person, unencumbered by competing responsibilities, owns a single major initiative and heads up a separable, largely autonomous team to deliver its goals.

Growth Multiplied Our Challenges

As Amazon crew, we realized that despite our best efforts, we were spending too much time coordinating and not enough time building.

Dependencies-A Practical Example

The project did launch successfully. But I noticed that in the areas where we controlled our own destiny-that is, the reporting, accounting, and payment changes, as well as our marketing plan-we were able to move fast. And in the areas where we had to make very minor changes to Obidos and acb, we moved painfully slow. Why was that? Dependencies.

The variations in technical dependencies are endless, but each one binds teams more tightly together, turning a rapid sprint into a stumbling sack race where only the most coordinated will cross the finish line.

Organizational Dependencies

Better Coordination Was the Wrong Answer

It wasn't just that we had had the wrong solution in mind; we'd been trying to solve the wrong problem altogether.

We didn't yet have the new solution, but we finally grasped the true identity of our problem: the ever expanding cost of coordination among teams.

NPI-An Early Response to Organizational Dependencies

Meanwhile, we faced no shortage of good business ideas. Indeed, we had many more ideas than we could support or execute-we could only take on a few big projects each quarter.

This gave rise to a process called New Project Initiative (NPI), whose job was global prioritization.

Choosing our Priorities

First Proposed Solution: Two-Pizza Team

These largely independent teams could do their work in parallel. Instead of coordinating better they could coordinate less and build more.

... then came back with a clearly defined model that people would talk about for years to come: the two-pizza team, so named because the teams would be no larger than the number of people that could be adequately fed by two large pizzas.

A two-pizza team will:

Tearing Down Monoliths

The First Autonomous Teams

Fitness Functions Were Actually Worse Than Their Component Metrics

After experimenting over many months across many teams, we realized that as long as we did the up-front work to agree on the specific metrics for a team, and we agreed on specific goals for each input metric, that was sufficient to ensure the team would move in the right direction.

Sometimes You Need More Than Two Pizzas

But we later came to realize that the biggest predictor of a team's success was not whether it was small but whether it had a leader with the appropriate skills, authority, and experienced to staff and manage a team whose sole focus was to get the job done.

Bigger and Bitter Still-The Single-Threaded Leader

The Payback

But it was worth it, because where we landed was an approach to innovation that is so fundamentally sound and adaptable that it survives at Amazon to this day.

This journey is also a great example of another phrase you'll hear that Amazon: be stubborn on the vision but flexible on the details.

4: Communicating

Narratives and the Six-Pager

The end of PowerPoint at S-Team Meetings

Tufte identified in one sentence the problem we'd been experiencing: "As analysis becomes more casual, multivariate, comparative, evidence based, and resolution-intense," he writes, "the more damaging the bullet list becomes."

That description fits our discussions at the S-Team meetings: complex, interconnected, requiring plenty of information to explore, with greater and greater consequences connected to decisions. Such analysis is not well served by a linear progression of slides that makes it difficult to refer one idea to another, sparsely worded bits of text that don't fully express an idea, and visual effects that are more distracting than enlightening.

Jeff offered a short explanation of the reason behind the change.

"The reason writing a good 4 page memo is harder than "writing" a 20 page powerpoint is because the narrative structure of a good memo forces better thought and better understanding of what's more important than what, and how things are related. Powerpoint-style presentations somehow give permission to gloss over ideas, flatten out any sense of relative importance, and ignore the interconnectedness of ideas."

Gradually, we settled on a standard format. Maximum blank: six pages, no desperate tricks in formatting please. Appendices with further information or supporting detail could be attached, but would not be required reading in the meeting.

How to Write an Effective Six-Pager

Six-Pagers Vary in Structure and Content

The New Meeting Format

We mentioned earlier the estimated reading speed of three minutes per page, which led to the six-page limit. If yours is a 30-minute meeting, a three-page a narrative would therefore be more appropriate. Our goal has been to leave two-thirds thirds of the meeting time for discussing what we've read.

First-time presenters often start by saying, "Let me orally walk you through the document." Resist the temptation.

The key goal of the meeting, after all, it is to seek the truth about the proposed idea or topic.

During the discussion stage, it's also important that notes be taken on behalf of the entire audience, preferably by someone knowledgeable about the subject who was not the primary presenter.

Feedback as Collaboration

Final Thoughts About Narratives

Narratives are designed to increase the quantity and quality of effective communication in your organization-buy an order of magnitude over traditional methods. Creating solid narratives requires hard work and some risk-taking.

5: Working Backwards

Start with the Desired Customer Experience

Most of Amazon's major products and initiatives since 2004 have one very Amazonian thing in common-they were created through a process called Working Backwards.

Trial and Error, Then Success

In the end, what turned out to work best was relying on the core Amazon principle of customer obsession in a simple yet flexible way of writing narrative documents.

These two elements from the Working Backwards process-starting from the customer experience and working backwards from that by writing a press release that literally announces the product as if it were ready to launch and an FAQ anticipating the tough questions.

Where Are the Mock-Ups? Bill and the Launch of Digital

Writing up our ideas was hard work. It required us to be thorough and precise we had to describe features, pricing, how the service woodwork, why consumers want it.

Half-baked thinking was harder to disguise on the written page then in PowerPoint slides. It could not be glossed over through personal charm and the presentation.

The Kindle Press Release

In other words, the FAQ section is where the writer shares the details of the plan from a consumer point of view and addresses the various risks and challenges from internal operations, technical, product, marketing, legal, business development, and financial points of view.

The Working Backwards document became known as the PR/FAQ.

The Features and Benefits of the PR/FAQ

Press Release Components

Heading: name the product in a way the reader (i.e., your target customers) will understand. One sentence under the title.

"Blue Corp. announces the launch of Melinda, the smart mailbox."

Subheading: Describe the customer for the product and what benefits they will gain from using it. One sentence only underneath the heading.

"Melinda is the physical mailbox design to securely receive and keep safe all your e-commerce and grocery deliveries."

Summary paragraph: Begin with the city, media outlet, and your proposed launch date. Give a summary of the product and the benefit.

"PR Newswire, Atlanta, GA, November 5, 2019. Today Blue Corp. Announced the launch of Melinda, a smart mailbox that ensures secure and properly chilled delivery and storage for your online purchases and groceries."

Problem paragraph: this is where you describe the problem that your product is designed to solve. Make sure that you write this paragraph from the customers point of view.

"Today, 23% of online shoppers report having packages stolen from their front porch, and 19% complain of grocery delivery is being spoiled."

Solution paragraph(s): Describe your product in some detail and how it simply and easily solves the customer's problem. For more complex products, you may need more than one paragraph.

"With Melinda, you no longer need to worry about getting your online purchases and deliveries stolen..."

Quotes and Getting Started: Add one quote from you or your company's spokesperson and a second quote from a hypothetical customer in which they describe the benefits they're getting from using your new product. Describe how easy it is to get started, and provide a link to your website where customers can get more information and purchase the product.

"Melinda is a breakthrough in safety and convenience for online shoppers..."

FAQ Components

Unlike the PR, the FAQ section has a more free-form feel to it-there are no mandatory FAQs.
...It is more appropriate to include tables, graphs, and charts in the FAQ.

You must include things like your pro forma P&L for a new business for product. If you have high-quality mock-ups for wireframes, they can be included as an appendix.

Consumer Needs and Total Addressable Market (TAM)

These consumer questions will enable you to identify, the core customers by filtering out those who don't meet the product constraints.

don't have enough space on their front porch for this product.

don't have a suitable source of electricity

Economics and P&L

Dependencies

How will we convince couriers (USPS, UPS, FedEx, Amazon fulfillment, Instacart, etc.) To actually use this device instead of their current/standard delivery methods?

Won't it take more time (which is precious) for them to make a delivery then it does today?

Feasibility‍

Go Ahead?

6: Metrics

Manage Your Inputs, Not Your Outputs

The Metrics Life Cycle

Should you decide to implement a Weekly Business Review for your business, we recommend the following DMAIC steps as well.

Define

The Flywheel: Input Metrics Lead to Output Metrics and Back Again

Better customer experience leads to more traffic.

More traffic attracts more sellers seeking those buyers.

More sellers lead to wider selection.

Wider selection enhances customer experience, completing the circle.

The cycle drives growth, which in turn lowers cost structure.

Lower costs lead to lower prices, improving customer experience, and the flywheel spins faster.

The Amazon flywheel captures the major aspect of what makes Amazon's retail business successful.

Identify the Correct, Controllable Input Metric

Measure

Analyze

If you have progressed through the prior three steps, then your actions to improve the metric will have a higher chance of succeeding because you'll be responding to signals instead of noise.

If you immediately jump to the improve stage, you'll be working with imperfect information on a process you likely don't fully understand yet, and the actions you take will be much less likely to generate desired results.

Improve

The final stage is all about ensuring that your processes are operating normally and performance is not degrading overtime.

Another thing that can happen in this stage is that you'll identify processes that can be automated.

Control

At Amazon, the Weekly Business Review (WBR) is the place where metrics are put into action.

The WBR: Metrics at Work

Each meeting begins with a virtual or printed distribution of the data package, which contains the weekly snapshot of graphs, tables, and occasional explanatory notes for all your metrics.

The Deck

Amazon deck's distinctive features:

... the data in the deck are certified as accurate by finance.

Metrics dashboards and reports are established by every engineering, operations, and business unit at the company.

In many cases metrics are monitored in real time, and each critical technical and operational service receives an "alarm" to ensure that failures and outages are identified instantly.

‍We use consistent and familiar formatting to speed interpretation. Amazon thereby looks at the same set of data every week, in the same order, and gets a holistic view of the business.

‍We focus on variances and don't waste time on expected

Our business owners own metrics and are prepared to explain variances. By the time the WBR meeting occurs, each metric owner should have thoroughly analyzed the metrics they own.

‍We keep operational and strategic discussions separate

We try not to browbeat (it's not the Inquisition). It's okay to dig into a meaningful variation that needs more attention, and to point out when high standards have not been met. Still, success demands an environment where people don't feel intimidated when talking about something that went wrong in their area. If people become afraid of pointing out their own mistakes because they will feel humiliated in front of their peers, it's human nature for them to do whatever they can to hide those mistakes in future meetings....we think it's better to establish a culture where it's not just okay, it's actually encouraged to openly discuss mistakes.

‍We make transitions easy. The WBR is most expensive and impactful weekly meeting, and every second counts-plan ahead and run the meeting efficiently.

The Meeting

Eight WBR can easily include charts that number in the hundreds, and that much data benefits enormously from consistency a presentation.

Anatomy of a Metrics Chart

Data Combined with Anecdote to Tell the Whole Story

Pitfall 1: Disaster Meetings

One Amazonian still recalls those disaster meetings even though they occurred more than 15 years ago. He said,

Pitfall 2: Noise Obscuring the Signal

Part Two: The Invention Machine at Work

In 2015 Jeff wrote, "We want to be a large company that's also an invention machine. We want to combine the extraordinary customer-serving capabilities that are enabled by size with the speed of movement, nimbleness, and risk-acceptance mentality normally associated with entrepreneurial start-ups."

Of course, Jeff also wrote in that same shareholder letter, "I believe we are the best place in he world to fail (we have plenty of practice!), and failure and invention are inseparable twins. To invent you have to experiment, and if you know in advance that it's going to work, it's not an experiment. Most large organizations embrace the idea of invention, but are not willing to suffer the string of failed experiments necessary to get there."

Being Amazonian means approaching invention with long-term thinking and customer obsession, ensuring that the leadership Principles guide the way, and deploying the practices to drive execution. "Long-term thinking levers our existing abilities and lets us do new things we couldn't otherwise contemplate,"

Key word: patiently.

The other key is frugality.

You can't afford to pursue inventions for very long if you spend your money on things that don't lead to a better customer experience, like trade show booths, big teams, and splashy marketing campaigns.

Patience and carefully managed investment over many years can pay off greatly.

The reason: invention works well where differentiation matters.

Differentiation with customers is often one of the key reasons to invent.

When we have invented, our long-term, patient approach-driven by customer need-has been fundamentally different from the more conventional "skills-forward" approach to invention, in which a company looks for new business opportunities that neatly fit with its existing skills and competencies.

While this approach can be rewarding, there is a fundamental problem with it: the company will never be driven to master new skills and develop new competencies, hire new kinds of leaders, or create different types of organizations.

Amazon's Working Backwards process-starting with customer needs, not corporate needs or competencies-often demands that, in Jeff's words, we "exercise new muscles, never mind how uncomfortable and awkward-feeling those first steps might be."

Indeed, the failure of the Fire Phone did not cause Jeff to question the process that created it. "We all know that if you swing for the fences," he wrote, "you're going to strike out a lot, but you're also going to hit some home runs." Unlike baseball, where a home run can bring in no more than four runs, a big business hit can score an almost infinite number of runs.

The magnitude of your inventions, and therefore your mistakes, needs to grow in lockstep with the growth of your organization. If it doesn't, your inventions will likely not be big enough to move the needle.

In 1999 Jeff wrote, "We must be committed to constant improvement, experimentation, and innovation in every initiative. We love to be pioneers, it's in the DNA of the company, and it's a good thing, too, because we'll need that pioneering spirit to succeed."

Introduction to Part Two

Over our long march to building Amazon's digital business, we proved a powerful lessons: it takes exceptionally patient and unwavering leadership to persevere through the prolonged process of building a new business and navigating through transformative times in an established industry with entrenched interests.

The fact that we entered as total beginners and emerged as industry leaders is in no small part a result of our adherence to Being Amazonian in our principles and our way of thinking, including thinking big, thinking long-term, being obsessed with customers, being willing to be misunderstood for long periods of time, and being frugal-principles that few companies are capable of maintaining in the face of quarterly reporting requirements and the daily gyrations of the stock market.

7: Kindle

Making the Turn to Digital

The Startup Phase for Amazon Digital Media and Devices

Our competitive advantage in physical media was based on having the broadest selection of items available on a single website. But this could not be a competitive advantage in digital media, where the barrier to entry was low.

Another key element of our competitive advantage in the physical retail business was our ability to offer consistently low prices.

But cost structure was not a factor in digital. The process and costs associated with hosting and serving digital files were basically the same whether you were Amazon, Google, Apple, or a startup.

In physical retail, Amazon operated at the middle of the value chain. We added value by sourcing and aggregating a vast selection of goods, tens of millions of them, on a single website and delivering them quickly and cheaply to customers.

To win in digital, we needed to identify other parts of the value chain where we could differentiate and serve customers well.

Jeff told Steve that this meant moving out of the middle and venturing to either end of the value chain.

On one end was content, where the value creators were book authors, filmmakers, TV producers, publishers, musicians, record companies, and movie studios.

On the other end was distribution and consumption of content. In digital, that meant focusing on applications and devices consumers used to read, watch, or listen to content, as Apple had already done with iTunes and the iPod.

Steve did not let this get in the way. In one of our meetings, he said that a typical company that wanted to grow would take stock of its existing capabilities and ask, "What can we do next with our skill set?" He emphasized that Amazon's approach was always to start from the customer and work backwards.

We would figure out what the customers' needs were and then ask ourselves, "Do we have the skills necessary to build something that meets those needs? If not, how can we build or acquire them?"

There was another reason we decided to build the device ourselves. If we had outsourced the work and succeeded in creating the first great reader device, much of the knowledge and know-how would accrue outside Amazon, in the minds and methods of the outsourcer.

We wanted to be the keepers of the intellectual property.

The overarching theme in the design stage was that our electronic book reader should "get out of the way" so the reader could make a direct connection with the content.

Once the person started reading, they should not notice they were using a device.

At some point in the debate, someone asked Jeff point blank: "How much more money are you willing to invest in Kindle?" Jeff calmly turned to our CFO, Tom Szkutak, smiled, shrugged his shoulders, and asked the rhetorical question, "How much money do we have?"

Amazon: A Device Maker?!

Kindle Takes Shape

Jeff insisted on this path, which resulted in Amazon Prime.

The good news is that you don't need a Jeff to make this type of decisions. You only need to ruthlessly stick to the simple-to-understand (but sometimes hard-to-follow) principles and process that insist on customer obsessions, encourage thinking long term, value innovation, and stay connected to the details.

8: Prime

Throughout 2004, Amazon sales had continued to grow, but the rate of growth decreased from the prior year, across all lines of business.

The output metric of sales revenue was not growing as fast as we wanted.

The need for Growth

Amazon customers cared about three main things that we could deliver for them:

Everyone in e-commerce knew customers were laser focused on shipping costs.

In every survey, the top answers remained the same: one of the biggest reasons people didn't order online was that they didn't want to pay for shipping.

Free shipping drove sales.

We just had to figure out a sustainable way to offer free shipping.

Relying on promotions over the long term can be a slippery slope for any retailer, especially one-off promotions.

There is danger in training your customers to delay purchases until the next deal comes along.

....a free shipping promotion for orders over $25.

Despite the last-minute time crunch, the promotion launched on time-and was such a hit with customers that we decided to turn it into a permanent program after the holidays.

We formally launched Super Saver Shipping on January 22, 2002, albeit with a higher minimum order of $99.

So Super Saver Shipping reduced our costs and lowered prices for the customer.

The program, which seems laughably primitive today, offered a valuable insight into what our customers wanted.

They were delighted to be given a free shipping option, even if the trade-off was "slow and free" or "fast and expensive."

Free Shipping 1.0-Super Saver Shipping

There Was a Catch

Loyalty Programs

...Jeff's preferred walking-the-store time was early Saturday and Sunday mornings.

It was not unusual for me to wake up at 7 a.m. on a weekend, check my email, and read five or six messages from Jeff to the relevant teams on issues he had found while walking the store that morning.

Walking the Store

...a clear expression of another one of Amazon's Leadership Principles in action, Have Backbone; Disagree and Commit: "Leaders are obligated to respectfully challenge decisions when they disagree, even when doing so is uncomfortable or exhausting."

"Leaders have conviction and are tenacious. They do not compromise for the sake of social cohesion."

"Once a decision is determined, they commit wholly."

Jeff said he wanted to build a moat around our best customers.

Prime would be a premium experience for convenience-oriented customers.

Prime transformed Amazon from a fairly successful company in the e-commerce space to a top player in the retail space.

And Prime changed the way people think about shopping online-and shopping, period.

As one journalist wrote, "Amazon single-handedly-and permanently-raised the bar for convenience in online shopping."

As Jeff announced to shareholders in 2018, "13 years post-launch, we have exceeded 100 million paid Prime members globally."

It's Time

9: Prime Video

In retrospect, it is easy to see the mistakes.

We had rushed Unbox out the door before it was ready.

In the weeks leading up to launch, rumors had been swirling around Hollywood and in the press that Apple was close to launching a digital video service.

We didn't want to come in second to Apple so we were in a frenzy to ship Unbox and ship it fast.

This was directly antithetical to the notion of focusing on the customer, not the competitor.

We were just focused on shipping.

We had prioritized speed, press coverage, and competitor obsession over the customer experience.

We had been decidedly un-Amazonian.

Jeff would say something like this to a leader who had just laid an egg: "Why would I fire you now? I just made a million-dollar investment in you. Now you have an obligation to make that investment pay off."

"Figure out and clearly document where you went wrong. Share what you have learned with other leaders throughout the company."

"Be sure you don't make the same mistake again, and help others avoid making it the first time."

Unbox: A Misstep on the Long and Winding Road to the Living Room

As with all media companies, the decisions made by top Hollywood brass were then, and still are, all about achieving short-term financial goals.

The Issue of Rights

At some point, Jeff came up with a simple idea: "Let's make videos free for Prime members."

There is a difficult chicken-and-egg problem with a subscription service.

You need to have a great offering to attract paying subscribers.

To be able to afford a great offering, you need a lot of paying subscribers.

It's a challenging cold-start problem that generally requires a large up=front investment, which you can hopefully pay back with subscriber growth in future years.

Jeff argued that even if we offered streaming videos to Prime members at no additional cost, the business could still be profitable in the long run. (Long-term thinking = being Amazonian.)

The major benefit of establishing a popular subscription service with a fixed-cost base is that once you exceed a certain number of subscribers, every new dollar of subscription revenue is pure profit.

Prime Instant Video: An Oh-by-the-Way Benefit

We'd known since our first experiments began in 2010 that we wanted our own TV series and movies.

We made no exceptions for the fact that this was Hollywood.

We used the Bar Raiser process to hire each member of the Studios team, and they would have to get accustomed to our frugal ways, including working in small, shared offices or open workspaces, a base salary capped at $160K, no cash bonus program, and riding in coach, not first class.

This made for some hard conversations.

Now we began to operate like a Hollywood studio, with the continuing and important difference that we compensated our team in the same way we compensated all Amazon leaders: no short-term performance targets.

We made all the pilots available to view for free on Amazon before making a decision as to which to greenlight.

Through this process, we were able to gather viewership data and ratings and reviews from real customers in order to make better-informed decisions about which show would attract the most viewers.

So, after all, we did find a way to make the process more customer centric than the studios', and therefore more Amazonian.

Throughout, we were stubborn on the vision and flexible on the details.

Amazon, Hollywood Producer

...in the early 2000s,...Roughly 75 percent of Amazon's business at that time consisted of selling physical books, CDs, and DVDs to customers.

We had to invent or risk becoming an irrelevant has-been in media sales.

Unlike Digital or Prime, however, Amazon Web Services had nothing to do with the core business.

The term "cloud computing"-...wasn't widely used in the early 2000s, and Amazon was likely not on many people's list of companies that were well positioned to offer it.

Further, it involved an entirely new class of customer for Amazon: software developers.

...we will attempt to answer the following two questions, which can help you incorporate key elements of being Amazonian into your organization:

1. What elements of being Amazonian enabled Amazon to move into this completely separate line of business?

2. Why was Amazon able to master cloud computing well before its potential competitors, including entrenched companies with large businesses to protect and well-capitalized web-based tech companies?

The answers to both questions come down to single-threaded teams ruthlessly iterating with the Working Backwards process, and obsessing over the customer experience, in order to discover the fundamental needs of the software developer in the new paradigm of cloud computing.

10: AWS

Influences

Web Services Proof of Concept

The Primitives Are Known, They Just Haven't Been Exposed as Web Services

The Working Backwards process is all about starting from the customer perspective and following a step-by-step process where you question assumptions relentlessly until you have a complete understanding of what you want to build.

It's about seeking truth.

Since we didn't know how developers would use S3, was there a way to structure our pricing so that no matter how it was used, we could ensure that it would be affordable to our customers and to Amazon?

Thus, the discussion moved away from a tiered subscription pricing strategy and toward a cost-following strategy.

"Cost following" means that your pricing model is driven primarily by your cost, which are then passed on to your customer.

This is what construction companies use, because building your customer's gazebo out of redwood will cost you a lot more than building it out of pine.

Based on my experience of going through the Working Backwards process with Jeff for well over a dozen different product teams across AWS, Digital, and other services, I can say confidently that the extra time we spent slowing down to uncover the necessary truths was ultimately a faster path to a large and successful business.

Bias for Action is an important leadership principle at Amazon,...

To put it another way, Working Backwards was the process that enabled us to put into action the principle of Customer Obsession.

AWS as It Started

Conclusion

What's most fascinating to us, and reason we have written this book, is that the elements of being Amazonian are so applicable to other companies, businesses, industries, and endeavors-as well as endeavors outside business, such as not-for-profit or community organizations.

We do not suggest that becoming Amazonian is easy-for an entire organization or for the individuals within it.

The rewards, however, are clear and distinct for both the company and the person.

Amazon is clear up front about seeking people who obsess over the customer experience and who value long-term success and continuous innovation over making a quick buck or earning a fancy title.

Even when a project does not achieve its goals or is deemed a failure, if the effort was admirable and adherent to Amazon practices and principles, the result for the individual is neither dismissal nor shame.

Failure is almost always understood as the failure of a group, a process, a system, as much as that of a single person-many people have been involved, made comments, shaped the idea, and given approvals along the way.

For the company, then, failure is typically viewed as an experiment from which a great deal can be learned that can lead to change and improvement.

Very often, failure is temporary and eventually gives birth to success.

The questions that typically follow a presentation of the ideas in this book are, "How do I start? Where do I start? What do I actually do to bring some of the aspects of being Amazonian into my business?"

Being Amazonian Beyond Amazon

Ban PowerPoint.

Establish the Bar Raiser hiring process.

Focus on controllable input metrics.

Move to an organizational structure that accommodates autonomous teams with single-threaded leaders.

Revise the compensation structure for leaders.

Articulate the core elements of the company's culture.

Define a set of leadership principles.

Depict your flywheel.

Here are a few suggestions:

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Working Backwards by Colin Bryar & Bill Carr

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If you love business, and life, this book contains more wisdom than meets the eye. For the first time ever, Amazon's 14 leadership principles are illustrated with real-world in-the-room examples. Written by former executives who worked directly with Jeff Bezos, this insider's guide shares what "Being Amazonian" is like.

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Buatlah Dokumen FAQ untuk stakeholder pengembang solusi, minimal 10 QnA

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What is the prevailing customer problem or opportunity?

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Describe the Solution and customer Experience

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