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Bill Carr (author of Working Backwards)02 November 2023

Unpacking Amazon’s unique ways of working

6Frameworks
12Insights

Frameworks in this episode

Communication4 steps

Have Backbone, Disagree and Commit

Dissent is an obligation, not a right — and commitment only starts once you've been genuinely heard.

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Strategy5 steps

Input Metrics Over Output Metrics

Stop managing the revenue number. Instrument the controllable customer-experience inputs that produce it.

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Leadership5 steps

Single-Threaded Leadership

Kill resource contention by giving one leader one mission and every function they need to deliver it.

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Innovation5 steps

Structural Conditions for Innovation

Companies that say they tolerate failure but punish it in comp and career don't get innovation. Change the structure.

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Leadership5 steps

The Bar Raiser Hiring Process

Put a trained, independent standard-keeper with veto power on every interview loop — and let them run the debrief.

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Innovation5 steps

The Working Backwards PR/FAQ Process

Start every new product from the customer's problem, written as a press release, before any constraint enters the room.

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Insights & moments

The myth-busts, hot takes, explainers, and tools worth keeping.

Myth Buster· 1

Myth Buster10:30

The 'Fitness Function' Failure: Why Compound Metrics Don't Work

Carr shares an Amazon idea that never worked — the 'fitness function,' which blended a team's five or six most important metrics into a single weighted index. He explains that compound metrics obscure cause and effect, making it impossible to learn which actions drive results, and now actively discourages companies from building them.

  • The fitness function munged multiple important metrics into one weighted index
  • Compound metrics become meaningless because you can't see which action drives which output
  • The fix is to break each metric out and manage it individually
  • There's usually one metric that impacts the bigger goal most, so you end up working on that anyway

“so I today I discourage teams and companies from creating any sort of compound metrics I've done that once and it was a terrible idea”

Bill Carr · 11:30
#metrics#amazon#failure#management

Hot Take· 3

Hot Take06:30

Amazon Was as Obsessed With Process Innovation as Product Innovation

Bill Carr argues the underappreciated half of Amazon's story is process innovation, not just famous products like Kindle, AWS, and Alexa. He also stresses Amazon didn't invent most of these ideas from scratch — it built on and adapted work others had done, which he says all great companies should do.

  • People remember Amazon for products (Kindle, AWS, Alexa, Prime) but overlook its equal focus on process innovation
  • Amazon borrowed or was inspired by others for most of its processes rather than inventing them
  • Part of why they wrote the book was to let others 'stand on Amazon's shoulders'

“what people don't realize is that Amazon was actually to some degree equally focused on process innovation”

Bill Carr · 06:30
#amazon#innovation#process#culture
Hot Take37:00

Serving Customers as an 'Article of Faith'

Carr describes Amazon's core belief that if you prioritize and serve customers well, financial outcomes like revenue, active customers, share price, and free cash flow will follow. He's candid that this was never provable — it was a genuine article of faith that shaped how every decision started from the customer and worked backward.

  • Amazon started decisions with what's best for the customer, then worked backward
  • Sales, revenue, share price, and free cash flow were treated as downstream outputs
  • Carr admits there is no objective proof the belief is true — it was faith, not evidence

“we took it as an article of faith that then things like sales things like revenue and active customers and things like the share price…”

Bill Carr · 37:30
#customer-obsession#amazon#philosophy#strategy
Hot Take49:00

Build a Product Funnel, Not a Product Tunnel

Carr contrasts a product funnel (many ideas in, few shipped) with a product tunnel (everything that enters comes out the other side). He argues teams should act like venture capitalists who fund only a small percentage of what they see, killing good ideas in favor of better ones with bigger potential impact.

  • A funnel narrows: lots of ideas at the top, few at the bottom
  • A tunnel ships everything, meaning there's no real comparison or selection
  • Treat yourself like a VC — fund only a very low percentage of ideas
  • Amazon killed plenty of good PR/FAQs because better ones had bigger potential impact

“what you're really trying to create is a product funnel not a product tunnel”

Bill Carr · 49:30

“you should think of yourself honestly as like a venture capitalist they don't fund every company that they meet with they actually fund a very…”

Bill Carr · 49:30
#prioritization#product#amazon#strategy

Explainer· 2

Explainer09:00

Bezos Ran Amazon's Scaling Problem Like a Scientist

Carr describes how Bezos, with a quant and computer-science background, approached the challenge of managing a complex company as a scientific problem. Rather than adopting a fixed playbook, he treated management practices as hypotheses to implement, test, and iteratively improve.

  • Bezos came from a scientific and analytical background (computer science, quant work at De Shaw)
  • He framed company management as needing a system or mechanism, not intuition
  • The approach applied to both process and product innovation

“I'm going to experiment like a scientist would with you know different ideas different hypotheses Implement them and see what works and iteratively improve”

Bill Carr · 09:30
#bezos#leadership#experimentation#management
Explainer1:10:30

How Amazon's Comp Structure Made Risk-Taking Safe

Carr explains two structural reasons Amazon employees would take big bets. Compensation was tied to the stock price rather than performance bonuses, so a killer year brought no kicker and a bad year brought no penalty — letting him move from Amazon's largest P&L to a zero-revenue digital media business without financial downside.

  • There were no performance bonuses; compensation was based on the stock price
  • A great year gave no extra kicker; a bad year carried no financial penalty
  • This let Carr move to a zero-revenue new business without pay changing
  • Performance reviews weighted what you actually built and contributed (an input method)

“one was our compensation system so there were no performance bonuses”

Bill Carr · 1:10:30

“there was no Financial penalty for me either because our compensation was based on the stock price”

Bill Carr · 1:11:00
#compensation#risk#amazon#incentives

Story· 3

Story07:30

Almost Every Amazon Practice Came From One 2003–2007 Window

Carr explains that virtually all of Amazon's landmark products and processes emerged in a single four-year period from 2003 to 2007. This was the moment Amazon shifted from hyper-growth startup to a complex company where the CEO could no longer be in every meeting, forcing the invention of scalable systems.

  • All the products and all but one of the processes were developed between 2003 and 2007
  • This coincided with Amazon going from 'zero to one' into a complex multi-business, multi-country company
  • The trigger was scale: the CEO could no longer be in every important meeting or hire everyone

“this period of both product and process Innovation actually occurred in this this one narrow window of 2003 to 2007”

Bill Carr · 07:30
#amazon#scaling#history#complexity
Story56:30

Why 'Good to Great' Was Amazon's Most Influential Book

Carr recounts how Bezos and the S-team read Good to Great around the time Amazon was struggling with quarterly fire drills to hit revenue targets. He credits it as the single most influential management book for the company because it helped them codify their growth flywheel and shift from short-term revenue chasing to improving durable inputs.

  • Quarterly 'chickens with heads cut off' fire drills to hit numbers didn't produce meaningful progress
  • Good to Great helped Amazon codify its growth flywheel of inputs (selection, experience, low prices)
  • It shifted focus from short-term revenue to long-term input improvement

“if you ask me I think that this was the single most influential and effective management book uh for our company”

Bill Carr · 57:00
#books#flywheel#amazon#management
Story1:05:00

The Fire Phone: A Solution In Search of a Problem

Carr uses Amazon's failed Fire Phone to illustrate that even a great process like the PR/FAQ doesn't guarantee good decisions. In his view, the team started with a technology solution — 3D effects — and then went looking for a problem it might solve, rather than starting from a real customer problem.

  • The Fire Phone started from a technology (3D effects), not a customer problem
  • Carr couldn't see how 3D made discovering or watching media better for customers
  • The simplest diagnostic for a failed product is asking what problem it solved
  • Tools help you make decisions but don't guarantee the right answer

“I would argue this is a case where we made the mistake of what we had a technology solution in mind which was 3D effects…”

Bill Carr · 1:05:30

“the simplest place to go when you see a failed product is to ask yourself what problem did you solve”

Bill Carr · 1:06:00
#fire-phone#failure#product#amazon

Tool· 2

Tool1:26:00

Bill Carr's Most-Recommended Books

In the lightning round, Carr names the books he recommends most. On management he cites Good to Great and Drucker (The Effective Executive), plus the Steve Jobs biography as a window into a tech company going through product innovation and big growth. His recent favorites are Seveneves by Neal Stephenson and A Gentleman in Moscow.

  • Management: Good to Great and Drucker's The Effective Executive
  • The Steve Jobs biography as a parallel to his Amazon experience
  • Recent fiction favorites: Seveneves and A Gentleman in Moscow

“not surprisingly you'll hear good to great”

Bill Carr · 1:26:00

“I'd recommend the Steve Jobs biography”

Bill Carr · 1:26:30
#books#recommendations#management
Tool1:28:30

Carr's Favorite Interview Question

Carr's go-to interview question is deceptively simple: tell me about your most significant professional accomplishment. He clarifies he means something the candidate actually built — a product, process, or organization — not an award or promotion, and says he can fill an entire hour probing that single example using the STAR method.

  • Ask about the candidate's most significant professional accomplishment
  • It must be something built, not an award won or promotion received
  • One well-chosen example can fill an entire hour of probing follow-ups
  • He uses the STAR method to understand situation, actions, and result

“tell me about their most significant professional accomplishment”

Bill Carr · 1:28:30

“I mean not some award you won or some promotion you got I mean something you built”

Bill Carr · 1:29:00
#hiring#interviewing#star-method

Takeaway· 1

Takeaway1:29:30

Slow Is Smooth, Smooth Is Fast

Carr's favorite motto, which he traces to the Marine Corps Scout Snipers, is 'slow is smooth and smooth is fast.' He applied it often at Amazon: to genuinely go fast you need to slow down first and get clear on where you're going, because most people confuse raw speed with velocity, which also requires a clear destination.

  • The motto originates with the Marine Corps Scout Snipers
  • To go fast you often need to go slow first and get clarity
  • Speed vs. velocity: velocity adds a vector/destination, not just pace
  • Many people move very fast without a clear destination

“slow is smooth and smooth is fast”

Bill Carr · 1:30:00

“often times to really to go fast you actually need to kind of go slow first”

Bill Carr · 1:30:00
#mindset#productivity#leadership#motto