Good morning, everyone. Thank you for coming out this early. I appreciate that. I'm sure you've been in all the lots of sessions.
You've been doing lots of things already. So we really appreciate the effort to come out early, early in the morning. So I'm Thomas Blood.
I'm an enterprise strategist, although I just took over the leadership of digital... for Europe, Middle East and Africa. And I'm not going to say much today because I have with me Giulia Rossi. Giulia Rossi leads our innovation practice for Spain, Italy and Portugal.
and I will leave you in her capable hands. Thank you very much. Thank you, and thank you guys for being here today.
Thanks, Thomas. I'm very excited to be here today. I'm responsible for the digital innovation program in South Europe, and I'm here today to share with you how Amazon innovates and how you can innovate like Amazon.
And in Amazon, when we talk about innovation, we start with the customer and work backwards. So this is the way we make sure we are building the right thing. for our customers. And of course, when you innovate, there are many different ways you can innovate. You can start concentrating on competitors, you can start concentrating on a new technology, or launching a new business model.
But in Amazon, we start with understanding what is the customer need and what would delight the customer, and then work backwards in understanding what is a solution that will really create a delightful customer experience. So I hope this methodology will inspire you and you can use that in your company, and we'll see also how we can do that. But let me dive deep into what is the mission of Amazon.
Amazon's mission is to be the third most customer-centric company. So as you can see, this mission is really broad. It doesn't say anything related to selling cloud, selling e-commerce, or selling books online. It's not related to any geography. any technology, any particular industry.
As this mission is broad, it's also very specific. Because in Amazon, often the tie-breaking question of a decision is what is the best thing for our customers. And you know that whenever organizations grow, and the complexity of decisions increase, the key point is really keeping that customer obsession when you scale it.
And in order to innovate in a distributed consistent and repetitive way. This is the key because often you need to have a quick time to market, you need to reduce the risk of failure and you need to do that both when you create ideas but also when you drive the execution of these ideas. So how do we do in Amazon? So leaders in Amazon use mechanism in order to make sure they drive this customer centric innovation approach not only to generate ideas but also to drive them into the old execution and the old marker of all the mechanism is called the working backwards mechanism so where innovation begins we start with the customer and work backwards so working backwards is the customer centric approach that has created to and as developed as helped us to develop any single product any single service all the different product that you see in the market from Amazon and AWS as well. So as you can see, it's really a customer-centric approach that is used in every part of the organization.
But when we say start with the customer and work backwards, the concept is not really asking the customer what they want or being close to the customer, but the concept is really to understand the customer need in order to be able to innovate on their behalf. And when you want to do that, You don't have to think dependently on the resources you have in a particular moment or the time you have in a particular moment. What you think you know how to do or what you think is even possible.
The concept is really trying to think big, trying to understand what would delight your customer. And then work backwards from there to understand what's the solution that you want to create. So it's not about feasibility or capability.
In Amazon, we like to call our early stage. products, minimum lovable products. So something that would put a smile on the face of your customer, would have a surprise effect like a wow moment for your customer that really creates a delightful customer experience.
And that has been the same over and over the years since 1997 when Jeff Bezos started Amazon.com. And has been consistent over the years. And I usually like to read this sentence because it's the core of the innovation approach of Amazon. And it's stated in the first letter to shareholders in 1997, but has been consistent.
and stated again in 2016 letter to shareholder. And it says that customer are always beautifully and wonderfully dissatisfied. Even if they report being happy and the business is great.
Even when they don't know you know it the customers want something more and your willingness to pursue these Customer delights will really make you insist on the highest standard to really satisfy the customer and create amazing customer experiences So when you do that You really can open up to innovate in many different business line so if you consider that Amazon was created and started in 1997 and then in 1998 we start selling CD and DVD from from selling books online and then we created Kindle video Amazon grocery shops Amazon go Alexa so as you can see do you want to know all of these have in common it has been the consistent methodology that has made us create all of these products and it has been consistent over the years, all of these products were actually created applying the working backwards mechanism. And none of the customers asked us, can you please create an Alexa? None of these products were actually created from a specific request of a customer.
But we were able to understand the need and invent on their behalf. But Jeff Bezos says good intentions don't work. What does it mean?
That sometimes you know we ask our team to really try hard, to really concentrate on their customer needs, so we get our team together. We ask all of them to do a nice brainstorming, and we ask the team really to concentrate on their customer need. But in this way, guys, we are asking our team good intention. We are not really asking for a change. and our people already have good intention to concentrate on the customer.
We are not giving them tools, we are not giving them a structure in order to make sure they innovate in a consistent way. So if good intention don't work, what works? A structure works, a structured approach to innovation.
And in Amazon, we have created this structural approach and we have organized it in these four main pillars, culture, mechanism, architecture, and organization. Organization and believe me that none of them work in isolation. They were correlated with each other So we cannot have a great culture But then don't have mechanism to scale our innovation methodology and don't have an organization that empowers the leaders to innovate So let me go and dive deep on the culture for a few moments Amazon culture is based on 14 leadership principles So that's a really the core of how Amazon innovates, how leaders lead, and how we can keep this distributed customer obsession.
Because actually the first leadership principle is customer obsession. And if you see, delivery result is only the last leadership principle. What does it mean? That if you concentrate on your customer and you do everything right, the result will come automatically if you really apply all the leadership principle. And some of my customers ask me, why, Julia, there are 14 leadership principles?
That seems like quite a lot. But the concept is that these leadership principles are guidelines for people really to be able to innovate in a free way, for people really to understand when they can apply more, for example, bias for action or more insist on the highest standard. So the concept is that leaders are multidimensional.
We need to make people really empowered. and use their superpowers in order to apply one leadership principle in one contest or another one. And you can see there is a DNA there. These leadership principles are really the DNA of the Amazonians. We are hired based on leadership principle.
We are, you know, promoted based on the leadership principle. And they are like a common language that we use everywhere. So we use it in Italy, we use it in Seattle, we use it in Las Vegas, Singapore. every part of the organization because it makes like us understand what we shall apply. in a particular context so the help creates and take fastest decision because if I say to my colleague Thomas you know let's apply most bias for action in in a project he would immediately understand what I mean or like let's apply more insist on the highest standard and in this way you create a common you know glue among the people.
So they are not just written in the wall, but they are lived and breathed by the Amazonians. So let me first concentrate on the invent and simplify. It's one of my favorite leadership principles.
But let me tell you a story. Who knows Kindle? Who has a Kindle?
Can you raise your hand? I'm glad. So let me tell you a story. When we invented Kindle, you know, we have understood that people look who love reading want to read and want to have access to their favorite book in a simple way everywhere they were in every time and in a simple simple way so the main mission of the Kindle was books everywhere in the world in 60 seconds full stop it didn't say anything at the beginning on how we would achieve that and remember that when we launched Kindle we were leading in the market in selling books online.
So remember how the market could have perceived that in the context of maybe guys you are jeopardizing your main business line, you are selling books online and now you are creating an hardware where people could actually download the book. Are you really sure you want to do that? But the concept of inventing and simplifying is the concept of willingness to be misunderstood or risk to be misunderstood for a long period of time.
when you understand that there is a mission, when you understand there is a customer need and you can play a role in satisfying the customer need. And we were a software company. Maybe some of you remember the first version of the Kindle. So we did not know how to build an hardware. We had no capability but we wanted to play a role in satisfying the customer need.
So we started hiring people. We started understanding in which competencies we could get, how we could build an hardware. So, some of you might remember the first version of the Kindle.
I still do and it's still in our main building in Seattle in the reception. And also, the first one, but all the 14 new version of the Kindle up until now, that were developed based on the customer feedback. What does it mean? The concept is we created this minimum lovable product. So we created the first version of the Kindle so we could get early enough market feedback and feedback from our customer because innovation is difficult.
The key part is really to be able to get the customer feedback as early as possible in order for you to tune it and arrive and achieve the customer delight product that you want to create. So the willingness to be misunderstood for a long period of time has also applied for AWS. Some of you. you remember at the beginning when we launched AWS, you know, all of the markets said that, you know, we should have concentrated on, you know, Amazon.com and e-commerce. But we have understood that we could enable people with the technology and the innovation capability in order for them really to accelerate their innovation capability.
And that's why we created the AWS architecture in order to industrialize the concept of free and fast experiments. orientation Let me mention another leadership principle that is really close to my heart this is what we mean with bias for action Because many decisions are reversible and speed matters in business But what do I mean with that? The concept is there there's some time, you know in order to take a decision in our company we really take a lot of time because we want to really understand and get all the data we need to be careful what we invent and we need to be careful what we launch you know we don't want to get the wrong product none of us want But in Amazon, we teach leaders to take decisions as soon as they have 70% of the data they wish to have.
Because if they wait for 90%, that's going to be maybe too late. They might be too slow. And this is what we mean with bias for action. And when we innovate, calculated risk-taking is also very important.
So we need to find out how and when we can apply bias for action or in which circumstances we need to pause and think more deeply into what we want to do. And that's why we have created a mental model. of taking a decision that define decision in one way or two way doors. So what does it mean? So one way door, like that decision that are really important for the company.
They have important... consequences and irreparable consequences, which is like opening a new data center or opening a new fulfillment center. And that decision we shall take in a very careful way. But there are some other decisions that we call two-way door. It's like we can walk out the door, check what the market says, and then if that works, we scale it faster.
If it doesn't work, we just come back. So these type of decisions have really irrelevant consequences, reputable consequences. And this is the concept sometimes when we want to launch a new product, when we want to launch a new service.
Let's get the MLP done, and let's see what the market says, and get the feedback early enough. And this is a way you can really achieve great time to market. But when you enable people to innovate, you really foster this customer-obsessed culture, how do you give the structure that you...
that we were saying before and we do that applying the working backward process and in amazon we do a peculiar way we don't usually use powerpoint but we use you usually write press release frequently asked question and visuals and some of you say okay fine you know we all write press release we launch a product you know we write a product and then we go to the marketing department and we write a press release but this is is a peculiar way in which we do in Amazon. You know, what many companies do is they build the software, they get it all working, all perfectly fine, then they throw it to the marketing department and say, here's what we built, write the press release for it. But this concept is actually backward, because maybe the marketing department would say, this is not the product that our customer wants. So the concept is like writing a press release before even start writing anything. single line of code.
Before even starting the development or the agile process, having a moment in which you pause and you're really sure that you're building the right thing for your customers. But how do you do that? And this is the concept of, we were saying that before, empathizing with the customer, understanding, first of all, who's your customer. And many of you will be working in B2B companies.
Many of you would work in B2C companies where you say okay I have many customers I mean everyone is my customer okay but who do you want to delight who is the target customer that you really want to target in order to improve their customer experience and where you want to play a role in with your company for them and this is how you can understand who is the customer and empathize with their circumstance empathize with their contest. In Amazon we don't create static personas. It's really we empathize with the contest, their problem and really understanding like their life when we want to create a new product.
And when we create a product or we have an idea because we have understood that there is a customer problem, we always ask ourselves the five working backwards question and this is the structure I was mentioning before. Who is the customer? What is the customer problem? How do I know that it's a relevant customer problem? And is the solution or the idea that I have in mind solving that problem, or is it just cool because it's using artificial intelligence, big data, machine learning, and everything?
Is it solving a customer problem? Will it be relevant? Someone will get it, will buy it. And what is the customer experience? So if I ask you, what is the customer experience?
What is the most important word in these five working backwards questions? What would you say? It's customer.
And it's also another important word that I like. It's the. It's the specificity on how you answer to this question because it's like who's the customer, what is the customer problem.
Try to dive deeper, it was another leadership principle, on the problem where you can really play a role and you can take five minutes and you can take five months in answering this question and the concept of the press release really help you going through these questions and really help you driving clarity of thought when you reply to this question. Because you can really have the answers, but when you put them into writing, and writing one single line of page, one single, sorry, page, answering this question, that will really make the difference. But let me explain to you more what is the press release and FAQ and visuals.
So a press release, it's a one-page document. that you write to respond to the five working backwards questions. And then you write this document leaping into the future. So you imagine in six months time, eight months time, when your customer will have the product in his or her hands. What would he say?
How would she feel about the product? And you write the press release based on that. So you write the press release starting from a customer testimonial.
a customer quote that will really make you be in the shoes of your customers. And everything will start from there. You know, that is how you reply to the five working backwards question. And believe me that if you want to have all the five working backwards question detailed in a page document, only one page, means you really have to have clear in your mind what you want to achieve.
Because, you know, sometimes you write six. page document because maybe the clarity is still not there. So the first draft of the press release will still be five pages and then refining and refining you get it to the one page document that is a press release.
And then the FAQ, so frequently asked questions are created based on the feedback that you get from sharing this press release. Let me be more precise. A press release in Amazon can be written by anyone. But the concept is how much you revise the press release, you circulate the press release among your peers, among your leaders, and how much you can get feedback on your solution.
So it's not your solution, but it's a team distributed innovation that we said before. And based on that feedback, you create the frequently asked question. And this feedback really give strength of your solution.
It really makes you think in a different perspective of the solution. So think about, you know, I write a press release, I pass it on to one of my team members, and then she will start reviewing the press release. And she would ask, Julia, but have you thought, how much does it cost?
Oh, yeah, it costs five euros. Okay, but are you sure? What's the margin? I mean, what's the channel?
How do I bring it to the market? What's the customer support? If that breaks, how does it work?
So we don't create a business model canvas, but it's through the frequently asked question that you refine your thinking and your solution in order to have that really strong. And the FAQ are like external type of questions, so questions that your customer would ask you, or internal type of questions. So what's the supply chain? How do I build this?
Do I have the capability? Which technology does he use? And when you do that, you really have the solution quite strong at the end. And then you have the visuals.
So the visuals are like the customer journey. So as you see, all of these three tools are like the tools of the mechanism that we were saying before. So we have a structure, the five working backwards question.
How do you give people tools to apply this structure? It's the press release, FAQ, and visual to make sure that they build concentrated on their customer needs. And everything is based on understanding the customer journey and revise it and read and discuss and debate and ask questions. So in the press release, there's also like a date, a time and a city where you're going to launch that product. And I really saw people really driving and discussing hard and understanding and agreeing on a time and a date.
But let me tell you more from the words of someone that you might have. seen somewhere. Is the working backwards process optional?
It sounds great, but it seems like a lot of work. Oh boy, how do we begin? Well, the working backwards process should not be optional unless you know a better way.
And you shouldn't know a better way until you've tried the working backwards process several times. The working backwards process really does work. And this particular thing here, it sounds great, but it seems like a lot of work.
Done correctly, the working backwards process is a huge amount of work. But it's... It saves you even more work later.
The working backwards process is not designed to be easy. It's designed to save huge amounts of work on the back end and to make sure that we're actually building the right thing. What so many companies do is they build the, they build the, they write the software, that's a lot of work, they get it all working and then they throw it over the wall of the marketing department and say, okay, here's what we built, write the press release for it.
That process is the one that's actually. backwards I like this video from Jeff because it shows you few things first one this is an internal whole and you could see amazon.com so it's actually you know shows you how much it's an authentic experience on really how we have created every and service so that Amazon has launched. And he was mentioning that bias for action that I was mentioning before, trying to build a new product and try to experiment.
So when you create a team of people that are enabled, that you really want to innovate and you give them a structure, you might be even... overwhelmed by the number of ideas that you want to launch in the market. With the working backwards mechanism it's important to select which ideas are worth pursuing and when you pursue it we said let's get the customer feedback early enough but how do you do that?
And in Amazon this was what made us move from a monolithic approach to a microservice approach. Because, and this is like the schema of the AWS architecture in microservices, and you all know that the concept of microservices really enabled you to experiment faster, really enabled you to see if a product, you know, gets a nice customer feedback, so you can scale quickly, if it's not, you know, totally aligned, so you need to come back and change something, but then, you know, you can fail fast in this way. and you can readapt really quickly because you don't have to change the whole part of the implementation but you can change that micro service and in that way you can really concentrate on what is right for your business and the AWS architecture is what you know enables you to embrace this free and fast experimentation it's what enables you really to Industrialize in your company this concept of free and fast experimentation so that you can really concentrate on your business rather than concentrating on technology and really make sure that your business is able to innovate and really be effective in the market and these are all the micro services but I won't go in in the details with that but you know and it's also with the AWS architecture It's also an example of the customer feedback, you know.
194 million deployments a year. How we do that? With the customer feedback as well.
So it's really as well an example of how much we have industrialized this concept of experimentation to enable you to innovate on the technology side. And then, you know, how can we keep this approach when the company grows? Because it's easy to do that.
When you actually have a small company, but how can we keep this concept of free and fast experimentation when the company grows? And this customer-focused innovation approach. And we do that with an organization approach that we call Two Pizza Team.
And I'm Italian, so when I heard it the first time, Two Pizza Team, my concept was like... it's a team of two people, I mean like two pizza team, so we can debate on the size of pizza and let's not go there because it's a topic close to my heart but the concept is really... Creating a team of seven to eight people that can be fed with no more than two pizzas. Let's not go there again.
But the concept is creating like a small startup in your organization. And the concept is that these people will actually own the idea from the beginning of the idea up until the execution. So if you organize your company with small startup that own a project, And these type of two pizza team are multidimensional. So you have people with different competencies.
So you have an idea, so you can embrace people from marketing, from the business. So it's not like throwing the ball from one team to another. And they say, no, that's not my responsibility. But this team would actually start from the idea generation to writing the press release, to managing the FAQ and manage the go-to market and the implementation of the solution.
So this is really a concept that is powerful in order to drive ownership, in order to drive, you know, decentralize the authority to these people that really feel empowered to innovate and really feel like that product is like their own baby, really. And when something is wrong about that product, they really find it close to their heart in order to fix the problem for it or make sure that that problem doesn't occur on that product. And this is how we hire people like this.
And as I was mentioning in this slide, Amazon hire builders and let them build. Because the concept is, you know, the people that work for Amazon really are empowered because they are part of this two-pizza team that can really make things happen. So it's not just creating ideas or concepts, but then driving that through the whole execution.
And, you know, in this way, you can really, as I said before, experiment early and frequently. And the people get empowered with the leadership principle that I was saying before to apply these leadership principles. And there is this concept also of the letter to shareholders that I was mentioning before that Jeff Bezos always writes in order to reinforce some of the leadership principle and make sure that everyone really feels, you know, the possibility and the freedom to propose a press release.
I was saying before, the press release is not, you know, can be written by anyone in the organization. And with the reviews, you can get a two-pizza team assigned when you write a press release. I give you some examples, like AWS was written from, was born from a press release written by Andy Jesse.
Andy Jesse, maybe you heard this name before. And that press release was actually revised 45 times until we created AWS. So everyone can write a press release.
Amazon Prime was born from a press release drafted from a guy in the fulfillment center. So it's this distributed experimentation model. But when you do that, you know, you're also accepting the possibility of failing.
Who remembers the Fire Phone? I see some of you smiling and raising their hand. Who has a Fire Phone today?
Someone is raising their hand. I would like to invite this person on the stage. But the concept is that the Fire Phone was actually one of the biggest failures that we had in Amazon.
And actually, it was one of the biggest errors. But it was... a learning opportunity because when you really embrace the concept of free and fast experimentation you're really accepting the possibility of failing because you take the failing as a learning possibility from that what have we learned from the fire phone you know the team that worked on the fire phone was actually moved to work on the alexa because they had the hardware competencies and also uh capability that could be used and reused on a different product, with a different scope and a different purpose on a different time.
But this is how, you know, it's the concept of learning from every error. And also, you know, the auction part that we had at the beginning of Amazon.com, you know, we got the feedback that that mechanism wouldn't work for our customers. And then we moved to the approach of the Amazon.com. And that is really the concept of accepting this possibility of failing. So when many customers ask me, why, Giulia, do you share this presentation of the culture of Amazon?
Why are we saying this? And then they say, how can we apply? to our company. And what I say is that we, based on the customer feedback as well, we have created a program that is called the Digital Innovation Program. That guy Thomas on the front row lead for EMEA.
And this Digital Innovation Program is really give you the possibility to apply the four pillars of innovation. to your specific business challenge in order for you to accelerate your innovation capability. So helps you concentrate on your customer need, help you apply the working backwards approach and try to build a press release based on your company needs and your customer need and accelerate the execution capability building a real MLP.
And in this way you know Amazon is really enabling the customers and all of us to innovate both on the technical side and with the innovation mechanism. And this program is actually like a free program that we offer like more of a partnership for some of our customers in order really to accelerate their innovation capability. And the build phase is done in many different ways and opportunities on the AWS platform in order to be able to build it and test it and scale it when it's needed in the fastest way.
And in addition to that, of course, we have training and certification on our TCO, on staff productivity, operational resiliency, business agility, and all the possibilities that can enable your business in addition to the technical side. And also the customer enablement. So all the professional services that you can use to make sure that you can also build the solution that I was saying before. We have a prototype team that can help doing that.
We have a huge ecosystem of partners with the capability on every single technology that can help you create the solution based on the AWS building blocks. And all of this is really what would enable an idea to come to life. Before, you know, maybe we can go on some debates and discuss a little bit if you have some questions. The concept is, guys, it's up to you.
I mean, you are the leaders who get to decide, who get to choose, to embrace a customer-obsessed and a customer-centric innovation. And you can keep the scale and scope of a huge company, but the heart and the spirit of a small one. I'm now applying to Pizza Team Organization. using working backwards mechanism and really innovate and concentrate on your customer feedback.
Thank you very much. Thanks a lot