Discover Amazon’s leadership secrets in a deep dive with former executive John Rossman

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10/09/2023

Show Notes:

Staying ahead of the curve has never been as important as it is in today’s business landscape. That’s why it’s essential to learn from the best of the best and shape your business for success. Our guest today has a lot of wisdom to share about leadership, innovation, and growth.

Meet John Rossman. John is currently the Managing Partner at Rossman Partners, a business consulting firm helping leaders innovate, compete and win in the digital era. He’s a seasoned business advisor, visionary business strategist, and leading expert in the realms of digital transformation, leadership, and business reinvention. After working on launching Amazon Marketplace and running its enterprise services division, John went on to work with the world’s most renowned brands to help them innovate and compete with more agility and effectiveness. Some of his clients were big names like Novartis, Fidelity Investments, Microsoft, Walmart, and Nordstrom. He has also written three influential books: The Amazon Way, Think Like Amazon and  The Amazon Way on IoT.

John is all about solving real-world business challenges and crafting smart solutions that meet customer needs. A thought leader in digital and innovation strategies, he thrives on helping companies stay competitive in today’s fast-paced era.

In this episode of the Think Business with Tyler podcast, we talk about the importance of putting the mission first, how frugality drives innovation, the power of customer-centric leadership, and why metrics are a vital tool for company growth.

If you want to hear more about Amazon’s leadership principles, make sure you tune into this episode to hear John’s valuable insights.

Guest-At-A-Glance

💡 Name: John Rossman

💡 What he does: He’s the Managing Partner at Rossman Partners.

💡 Noteworthy: John is a former Amazon executive who played a vital role in launching and scaling the Amazon marketplace business, which is now over 50% of all units sold at Amazon.com.

💡 Key Quote: “It’s that strategic customer obsession that really took Amazon from being a books, music, video retailer to this conglomerate business today was because they’re always curious about what’s going on with the customer bigger and broader. And so they always think about it as customer obsessions is about hustle. It is about hustle, but it’s also about curiosity.”

💡 Where to find John: LinkedIn

Key Insights

Your business mission always comes first. It’s important to put your mission first, especially when you’re faced with complexities and challenges in your business. As John explains, organizational structures can sometimes act as roadblocks, so make sure you prioritize the mission if you want to see positive results. He says, “You’ve got to work for the mission. Don’t let your org chart get in the way, especially when you’re doing something new, something hard. Org structures really get in the way, and especially in bigger businesses, people get so territorial, and everything has to go up and down in the organization. What does that do? Well, it adds risk. It adds complexity and adds time. So if you can be more mission-oriented and go orthogonally across the organization, that’s a power play for big companies to be able to make change happen better.”

Frugality powers innovation. Frugality is not always an obstacle in business. It can be a powerful tool for innovation especially when used as a creative constraint. John explains, “Frugality is really a constraint, and it’s much more oriented, especially today, in design processes, design approaches, solve problems by having cost be a constraint and working from a target cost model back is a really stealth move of how to innovate. If you look at all of Elon Musk’s companies, X aside, but Tesla, the Boring Company, or SpaceX. All of them, their core innovation is they dramatically change the cost structure of their fundamental industry. And then he’s used that target cost model and work back to well, how does the design, the production, the first principles of our product have to fit to that target cost structure. So I do that move a lot with my clients. […] So think of frugality more in the spirit of a constraint in which we use to innovate and improve our capability.”

Customer obsession is a vital leadership principle. The most successful companies know that keeping customers happy is a crucial leadership principle. When you lead with customer obsession, you inspire your team to put customers first and build customer-centric products. John says, “You can’t live with just customer obsession, or there would have been just one leadership principle at Amazon. I think there’s fundamentally two types of customer obsession. One is tactical customer obsession, and the other is strategic customer obsession. Tactical customer obsession is like, Hey, we got to get today’s order, today’s customers, today’s thing right and perfect. […] Strategic customer obsession is completely different. Strategic customer obsession is giving yourself the luxury to be curious about your customer bigger and broader than just how you’re working with them today.”

Metrics drive business success. Instead of looking at your metrics as just financial numbers, think of them as tools that can steer your business in the right direction. Metrics can help you understand what you’re doing well and what you should improve in your operations. John explains,  “Too many people focus on solely the financial metrics and a few market metrics in their business, and I learned a whole new playbook of metrics at Amazon. So, the move I would suggest for anybody is to triple down on the metrics you put in your business. And I always say metrics are not a noun. Metrics are verb. We have metrics to drive insights and action in our business. So, use those metrics as a signal to what’s not good enough today and what are your customers asking for.”

Top Quotes

“It was awesome, and it was intense, and it was a place that you could make a difference, and I absolutely loved it. It had a high bar in every way that you can think about relative to impact and contribution and effort that you needed to make and everything, but it was a great environment, and I always joke it was the one time in my life that I paid attention in class. I took so much from it.”

“Nobody saw the combination of Marketplace Prime and FBA that those three things are all going to line up together and work, so the ambition was there, the vision was there, but the moving parts of it weren’t clear and weren’t known. […] it’s really because we kept exploring like, ‘What’s the job to be done for our customer or for our seller, and let’s figure out how we can make their business or life better and make a great business out of it.’”

“The world’s hard enough as it is, and there’s enough uncontrollable factors. Don’t let internal things become the hard things in your business. And, to that point, Neil and I had let a hard thing, and it was only because we weren’t willing to have bold, assertive, hard conversations with our colleagues, and basically what Jeff was telling me was, ‘Hey, your title might be director of merchant integration, but you drive the marketplace and don’t confuse organizational structures with that accountability.’”

“It’s that strategic customer obsession that really took Amazon from being a books, music, video retailer to this conglomerate business today was because they’re always curious about what’s going on with the customer bigger and broader. And so they always think about it as customer obsessions is about hustle. It is about hustle, but it’s also about curiosity.”

“The spirit of the principle ‘earn trust’ is about being vocally self-critical and that always approach any situation like, well, what role did I play in that? What can I learn from that? How do I take accountability relative to that? And when you do that, one of the things is you become more anti-fragile, right? So, you build systems, processes, mindsets, approaches that assume that other things are going to fail. How do I create something that is anti-fragile so that at some point you’re going to disappoint me, you’re going to fail me. I’m not going to let that impact my business as much as it might otherwise.”

“You can’t take these leadership principles in isolation and just focus on one. Every situation, it’s typically a combination of 2 or 3 that you use as a tool to help either orient to a better approach or as a kind of a leadership or learning moment and stuff, and oftentimes, it feels like they’re battling against each other, but that forces you to a better place.”

“The most important decisions you make as a senior leader, whether it’s a team of one or a team of a million, is resource allocation. Where are we going to spend and deploy our precious few resources? And that is a decision-making process that you want to inform with data and facts and experimentation, but also, there’s a high degree of intuition that goes into it and everything. And the more strategic a decision, the more intuition tends to go into how it plays out. You can’t be all intuition. You can’t be all data-driven at these strategic decisions.”

“True strategy is solving a hard problem in the business and deciding how do we proceed relative to it, how do we allocate resources to it? And those are the most important decisions that enterprises make.”

“Over the next five to 10 years, I think you are going to start to see operating models and productivity in the back office of companies take a big step up relative to what it takes to get things done today, and we are just seeing the very tip of the iceberg of how AI can impact productivity in most organizations.”

“As a country, we need to focus on is encouraging an environment of innovation while taking care and helping people make the leap to those new skills that make them relevant in the market. And so I think in the short term, it can create negative impact on short-term jobs, but at a macro level, it will be a great thing for our country and for the economy.”

Links

The Amazon Way: Amazon’s 14 Leadership Principles

Think Like Amazon: 50 1/2 Ideas to Become a Digital Leader

Get a Free Kindle Version at Big Bet Leadership (Coming Soon).

Rossman Partners Website

Email John at info@rossmanpartners.com

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