Lecture Notes: How Amazon Innovates

Introduction

• Speakers: Thomas Blood, Enterprise Strategist, and Giulia Rossi, Leader of Innovation Practice for Spain, Italy, and Portugal.
• Focus: Innovation at Amazon, specifically the "working backwards" methodology.

Amazon's Innovation Approach

• Customer-Centric: Innovation starts with understanding customer needs and working backwards to find solutions.
• Methodology: Focus on what delights the customer.

Amazon's Mission

• Goal: To be the Earth's most customer-centric company.
• Decision Making: Customer needs are the tie-breaking factor in decision-making.

Importance of Structure in Innovation

• Mechanisms: Used to ensure consistent and customer-focused innovation.
• Working Backwards Mechanism: Start with the customer and work backwards to develop products and services.

Key Concepts and Principles

• Minimum Lovable Products (MLPs): Early stage products designed to delight customers.
• Leadership Principles: 14 principles guide innovation and leadership at Amazon.
  • Customer Obsession: First principle; focuses on satisfying customer needs.
  • Invent and Simplify: Willingness to be misunderstood if it serves customer needs.
  • Bias for Action: Encourage decision-making with 70% of data to not delay progress.

Working Backwards Process

• Tools Used:
  • Press Release: Written before development starts; outlines the solution vision.
  • Frequently Asked Questions (FAQs): Developed from feedback on the press release.
  • Visuals: Represent customer journey and experience.
• Five Working Backwards Questions: Who is the customer? What is their problem? Is the solution relevant?

Organizational Strategies

• Two-Pizza Teams: Small, autonomous teams capable of taking a product from idea to execution.
• Hiring Builders: Empower teams to innovate and execute.

Learning from Failures

• Example: Fire Phone was a major failure but provided learning opportunities.
• Approach: Fail fast, learn, and adapt.

Digital Innovation Program

• Purpose: Helps organizations apply Amazon’s innovation principles to accelerate their own innovation.
• Components:
  • Training and Certification: Enhances technical capabilities.
  • Customer Enablement: Professional services and partnerships to build solutions.

Closing Remarks

• Call to Action: Embrace customer-centric innovation while maintaining the agility of a small company through structured methodologies.
• Tools: Utilize AWS architecture and microservices to enable rapid experimentation and scaling.