Andy Jassy’s 8 Keys to Building a Reinvention Culture

by | Dec 14, 2020

Andy Jassy, CEO, AWS

AWS is conducting the 9th edition of AWS re:Invent, between 1 – 17 December (three weeks). In his opening keynote, Andy Jassy, CEO, Amazon Web Services spoke about its growth and financial successes, its culture of continually reinventing itself, and announced many new products and services. Jassy offered 8 keys to build a reinvention culture and said these 8 keys helped Amazon grow quickly and attain leadership in the cloud market.

Jassy said it is “really hard” to build a business that sustains for an extended period of time. He reminded the audiences watching his keynote online from the Fortune 500 companies around 50 years ago, in 1970, only 83 companies or 17% are still on this list today. 

“If you look at just 20 years ago (the year 2000), the Fortune 500, only half of them are still on that list. It is really hard to build a business that lasts successfully for many years. And to do it, you are going to have to reinvent yourself, and often multiple times over,” said Jassy.

He said AWS itself did much introspection in the last nine months and “thought a lot” about reinvention.

“Typically, what you see is the desperate kind of reinvention. You see companies that are on the verge of falling apart; some are going bankrupt, deciding they need to reinvent themselves. When you wait to that point, it is uncertain whether you are going to be successful or not. You want to be reinventing when you are healthy — not when the business is in bad shape. And you want to be reinventing all the time.

Some of it is about building the right reinvention culture and some of it is on what technology is available to you and jumping on it to make that reinvention happen,” advised Jassy.

Edited excerpts from his keynote follow (in verbatim and first-person prose):

1. The leadership will to invent and reinvent

People often think that “invent” means creating a new product or concept and “reinvent” means reimaging an existing concept. But there’s a lot more to it.

Look at companies like Airbnb (hospitality space) and Peloton (exercise bicycle space).

Look at what Stripe has done in the payments space. A huge amount of reinvention has gone into reimagining these spaces.

A leader has to have a maniacal pursuit of getting to the truth. You have to know what competitors are doing in your space, you have to know what your customers think about your product and where you sit, relatively speaking. You have to know what is working and what’s not working. There will be people within the company who will try to obfuscate that data from you.

It’s hard to get that data and you have to be relentless about it, you have to challenge people. Often people know a lot more about a subject than you do. But you’ve got to get to the truth.

2. Acknowledge that you can’t fight gravity 

When you realize that there is something you have to reinvent and change, you have to have the courage to pick the company up and force them to change and move. And part of that is acknowledging that you can’t find gravity.

If you have the conviction that something is going to change because it will offer a better experience for customers, it is going to change. Whether you want it or not, whether it is convenient for you or not, it is going to change. So, you are much better off cannibalizing yourself than having someone do it to you.

Look at what Reed Hastings and Netflix did several years ago, where they cannibalized their own DVD rental business because they saw where it was heading with streaming. That turned out to be a pretty good decision for them.

Look at what Amazon did in the late 90s. We had our own inventory retail business. We bought all these products from publishers and distributors, we stored them in our warehouses and then we shipped them to customers. We saw others like eBay and half.com offering third-party sellers products and they were shipping products to customers.  And we had a debate within the company whether we should support that or not. We did not expect someone to take care of customers the way we did. So, we set up a culture to work as an inventory business. We had to make some hard decisions. Ultimately, we decided to set up a marketplace for third-party sellers. We did it because we know that you cannot fight gravity. It was better for customers and it provided better selection with more assortment on price.

3. Talent that’s hungry to invent

The third thing you have to ensure is that you have talent that’s hungry to invent. People in the company are comfortable doing things the way they have been doing for a long time. Notice that when there is new blood in the company, they lead the transformation. It’s not that existing people can’t lead the reinvention. It’s just that you are asking them to reinvent something that they built. It’s hard for them to do that because they have spent a lot of time and energy and dedication to do that/build that. It means you have to learn new skills and you have to be curious about being trained on other technologies.

4. Solving real customer problems with builders

You need to make sure that you have builders that are curious about learning, and who are excited about leaning forward about inventing and reinventing their customer experiences. And you want people who solve problems for customers, as opposed to solving problems because they like technology.

In the enterprise space, you see some companies who are competitor focused. They look at what competitors are doing, and they try to fast, foul one-up on them. Then there are providers who are product-focused. They want to leave the product idea to the experts. That’s the group that you need to be careful about. They often are building things that they think are cool as opposed to what really solves the problem for customers.

Your engineers should be working on problems that really matter to your customers.

5. Speed

Speed disproportionally matters at every stage of your business and in every size company. Many leaders have resigned themselves that they have to move slowly. It’s the nature of how big they are, and the nature of their culture. Their engineering teams tell them it is too big or too risky.

Speed is not pre-ordained, Speed is a choice. You can make this choice. You have to set up a culture that has urgency and that actually wants to experiment. You can’t flip a switch and suddenly get speed. You have to be doing it all the time. That time is happening right now, and a lot more frequently than companies realize.

If you do not have speed, you will not have the ability to reinvent when you need to.

6. Don’t Complexify

Complexity is one of the enemies of speed. Don’t over complexify what you are doing. When companies decide to make transformations and big shifts, a plethora of companies and providers descend on them, and tell them all the ways how to use their products.

They don’t deal with the complexity that you have to deal with, in managing all those different technologies and capabilities.

The reality is, for companies that are making big transformations and shifts, it is much easier to be successful if you predominantly chose a partner and you learn how to do it, and you get momentum and you get success, and you get real results for the company.

You can’t have too much complexity upfront if you want to start a reinvention.

7. Use the platform with the broadest and deepest set of tools

One of the ways to help you avoid complexity is making sure you use the platform that has the most capabilities and the broadest set of tools.

When you think about the cloud, with all its services, you only pay for those as you consume them — you don’t pay for them upfront.

Why would you go with a platform that has a fraction of the functionality? If you go with a platform that has the most capabilities and gives you the right tools for the job you need to do, it not only makes it easier for you to migrate all your existing applications but also to enable your builders to build anything they can imagine.

8. Put everything together with aggressive top-down goals

The leadership team has to build aggressive top-down goals that force the organization to move faster organically than it otherwise would. There are lots of examples. Take GE, where 10 years ago, their CIO decided that they were going to move 50 applications to AWS in 30 days. The entire team told the CIO it was a terrible idea. But the CIO went ahead anyway and got to 42 applications in 30 days (moved to AWS). But in the process, they figured out their security and governance model; they figured out how to operate in the cloud, and they had success. This built momentum and the ideas came flowing in, such that the CIO could set that second big top-down goal — to move 9,000 applications to AWS in a few years, which they are now largely done with.

Capital One did the same thing. They set this big audacious top-down goal, that they are going to reinvent their consumer digital banking platform on AWS. They were on their way to moving everything to the cloud and AWS.

Setting an aggressive top-down goal forces the organization to understand that they are not going to be able to dip their toe in the water for a number of years. That you mean business, and you are going to make this change in setting up the right mechanisms to inspect whether you are getting the right progress — and if not, getting the issues on the table so you can solve them as really important.

You will notice that all these keys, maybe except for one, are not technical. They are really about leadership. You’ve got to make sure that you embrace these types of keys to building a reinvention culture.

It is very doable.


RELATED STORY

Build a Culture of Reinvention to Sustain and Succeed In Business: Andy Jassy, CEO, AWS

The writer was invited by Amazon Web Services to attend re:Invent 2020, virtual edition.

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Brian Pereira
Brian Pereira
Brian Pereira is an Indian journalist and editor based in Mumbai. He founded Digital Creed in 2015. A technology buff, former computer instructor, and software developer, Brian has 29 years of journalism experience (since 1994). Brian is the former Editor of CHIP India, InformationWeek India and CISO Mag. He has served India's leading newspaper groups: The Times of India and The Indian Express. Presently, he serves the Information Security Media Group, as Sr. Director, Editorial. You'll find his most current work on CIO Inc. During his career he wrote (and continues to write) 5000+ technology articles. He conducted more than 450 industry interviews. Brian writes on aviation, drones, cybersecurity, tech startups, cloud, data center, AI/ML/Gen AI, IoT, Blockchain etc. He achieved certifications from the EC-Council (Certified Secure Computer User) and from IBM (Basics of Cloud Computing). Apart from those, he has successfully completed many courses on Content Marketing and Business Writing. He recently achieved a Certificate in Cybersecurity (CC) from the international certification body ISC2. Follow Brian on Twitter (@creed_digital) and LinkedIn. Email Brian at: [email protected]
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