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The Amazon Way, with John Rossman (Customer Service, Vision, Leadership, Business) · The Action Catalyst

• 0:00
  John Rossman: What are we talking about today?
• 0:01
  Dan Moore: Your whole life history in 30 minutes or less?
• 0:03
  John Rossman: That won't be interesting for anybody.
• 0:07
  Dan Moore: Really great to meet you today. But I feel like I already know you since about half our
• 0:14
  household budget goes to Amazon Marketplace, which of course, you were the executive responsible for
• 0:19
  launching and scaling that.
• 0:20
  John Rossman: Yeah, some people see that as a real feature. Some people see that as a bug. So yes.
• 0:26
  Dan Moore: I'm so interested in your story, I know you started off at at Jasmine High School, I'm a
• 0:31
  real fan of Jesuit education.
• 0:33
  John Rossman: The real quality that I got out of that was they just had high expectations for me,
• 0:39
  right. And I had never been in an environment where people had high expectations for me, in
• 0:46
  general, like, I would say, the environment I had come from people kind of had low expectations. And
• 0:51
  so wow, you know, start thinking about making a bigger impact. I went to Oregon State was lucky to
• 0:57
  get a degree in Industrial Engineering joined a consulting firm, but I think one of the big pivot
• 1:02
  points was joining the Amazon. So I joined Amazon in early 2002. I was there for about four years, I
• 1:09
  launched the marketplace business, which is third party selling@amazon.com. And what I learned from
• 1:15
  there just completely reformed me as a problem solver as a communicator, as a leader that helps
• 1:24
  companies and leaders reimagine you know what their business should be in the digital era. And
• 1:31
  then, you know, writing the books that I've written, the Amazon way, been the one that we've
• 1:36
  done three editions of, you know, that combination of taking the learnings from Amazon and sharing
• 1:43
  them with others, that's really become, you know, my mission, which is helping companies win and
• 1:50
  compete in the digital era. And I use Amazon and a bunch of other reference points to give people not
• 1:56
  monumental shifts that they have to do, but little nudges little things that we can do to help us
• 2:03
  take advantage of the situation we're in and to learn, like what it means to compete in the
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  digital era.
• 2:12
  Dan Moore: You know, one thing that can be a bit daunting is when we have a company that is not the
• 2:15
  size of Amazon to think how in the world could ever get some lessons from a company that large
• 2:19
  and that successful? What What would you say to say a small business owner would be one real key
• 2:24
  finding for somebody that is at a very competitive marketplace and try to figure it figure their way
• 2:29
  out.
• 2:29
  John Rossman: I'm gonna answer that bigger than just one thing. So first of all, you know, what
• 2:34
  everybody remembers is kind of about Amazon is like, you know, where they are today, the last 10
• 2:39
  years where it's just been exponential growth in the stock has reflected that in everything. Amazon
• 2:45
  wasn't always the size, right. And there was about a 10 year period where stock was flat, a lot of
• 2:53
  doubters and naysayers relative to their business model, and they earned everything that they got
• 3:00
  these principles came from that era. And so these are not big company principles, these can be
• 3:06
  applied a lot of them as an individual, as a team as an enterprise. And it has nothing to do with
• 3:12
  either the industry you're in, or the size of the teams. But you know, there's there's no 16
• 3:20
  leadership principles at Amazon. The first is probably the most famous, it's about customer
• 3:24
  obsession. And it reads, leaders start with the customer and work backwards, they work vigorously
• 3:29
  to earn and keep customer trust. And while they pay attention to competitors, they obsess about
• 3:34
  customers. Now, you can't have just customer obsession, but leading with customer insights,
• 3:42
  being curious about your customer bigger and broader than just maybe how you intersect with
• 3:49
  them today, how you serve them today, your products or services really sets up so many great
• 3:54
  things for a business and for a team. And so if there's one thing if I if I'm forced to deliver
• 4:01
  one thing from Amazon, the one thing would be be extremely curious about your customers, the jobs
• 4:10
  they're doing the frustrations they have like what happens on a bad day, you know, everybody who
• 4:14
  tends to when you're in business, you kind of focus on like, well, how things work in general
• 4:19
  right now not be curious about what happens when things don't work. In general, when they don't
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  work and be a problem solver, be a builder to build better approaches for helping your customers
• 4:32
  in those moments. And that's the essence of everything from Amazon is start with the customer
• 4:37
  and work backwards.
• 4:39
  Dan Moore: Which any size business or organization that's involved with people can do exactly,
• 4:44
  because we can get into their bad days we can figure out ways to make those days not so bad. And
• 4:48
  that's when they want to work with us for a long period of time.
• 4:51
  John Rossman: And again, think about a broad customer experience, not just how your product or
• 4:57
  service is being used. You want I understand that intently. But understand upstream and downstream
• 5:03
  to it will give you better insight into your product and service. And you'll probably gain
• 5:10
  ideas of how to serve them bigger and broader than just what you do. And that's really been, you
• 5:16
  know, if you think about when I was at Amazon 90% of the business was books, music video, right?
• 5:22
  Think about where Amazon is today, the conglomerate business that Amazon has today. And
• 5:27
  it was really that mindset of exploring different types of customers and the broad customer
• 5:35
  experience, not just how you're working with them today, that's really been the catalyst that has
• 5:41
  taken them on to a journey that there was no plan, there was no vision, nobody predicted that Amazon
• 5:49
  would be the world's biggest cloud technology company in the world. Nobody predicted that Amazon
• 5:56
  would be the most dynamic and innovative logistics company in the world. Like nobody saw those things
• 6:03
  coming. It was because they explored customer experiences.
• 6:06
  Dan Moore: Customer obsession doesn't have a time stamp on it.
• 6:09
  John Rossman: No, I think that patience element, understanding what to be patient for and what to
• 6:14
  be impatient for is a real business superpower for leaders and Amazon. I think one of their real
• 6:22
  superpowers is the ability to be patient in the right way uncertain investments. Bezos has been
• 6:28
  quoted several times of saying, just because on some investments, he can be patient for seven to
• 6:35
  eight years before payback versus his competitors, which have 18 to 36 months, it allows him to
• 6:42
  compete completely differently, he can do things that his competitors can't follow. So that
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  patients can be a real if you think long term can be a real defining feature of how you create
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  legacy and how you compete and enduring business that competes for the long term.
• 7:00
  Dan Moore: John, even though your career is full of stars on it, I know that you've had some brick
• 7:03
  walls along the way. What kind of strategies would you share with us regarding when something
• 7:07
  unexpected, completely out of the blue obstacle, just derails everything, knocks you flat on your
• 7:12
  butt?
• 7:13
  John Rossman: Well, understand what's within your control. You know, the 14 leadership principles at
• 7:19
  Amazon is deliver results. And what it talks about is that leaders deliver hard results despite
• 7:28
  setbacks despite dependencies. And that we focus on the the controllable inputs more than we focus
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  on the uncontrollable outputs. And so in life in business, especially if you're doing hard,
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  unpredictable, innovative things, you need to have a plan, but things never go to plan, right? You
• 7:48
  better love setbacks, especially if you're going to be an innovator and a game changer. Just always
• 7:53
  be thinking about what's your next best available step, right? Understand your controllable inputs
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  versus, you know, kind of the outputs, you want the goals that you have, but realizing, you know,
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  there's a lot of factors that go on outside of your control relative to achieving those goals.
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  Just understand your next best available step.
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  Dan Moore: Yeah, I'm glad you blew that up for us. Because when you look at the words, deliver
• 8:16
  results, it seems to be outcome based on what you're saying is if we look at what we control,
• 8:20
  which are the inputs, ultimately, the outcomes are going to happen the way we want them to provide,
• 8:24
  we're doing the inputs correctly, and with the right focus.
• 8:27
  John Rossman: And you do want those to have those outputs, as you talked about, in fact, one of the
• 8:31
  leadership principles is about thinking big and encourages leaders to create inspiring visions for
• 8:38
  you know what a product or a service would have business could be. But that's why you need the
• 8:42
  complement of Yes, but break it down to the small controllable steps that you're going to take this
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  year, this quarter, this month, this week today, in order to get there. And that's how you build
• 8:54
  towards those things. And sometimes the outputs come or the outcomes come into different flavors.
• 8:59
  Sometimes they take longer, sometimes you get outcomes that you never intended or saw. But that
• 9:05
  balancing factor of thinking long term thinking big, but bringing it back to like, a manageable
• 9:12
  timeframe, and what are we in control of what can we do next? That's that's where, you know, action
• 9:18
  matters. And and you know, where you're in full control.
• 9:23
  Dan Moore: I like that, you know, I think that vision is kind of the fuel in the tank. And what
• 9:27
  we do with our hands on the steering wheel and the shifter and the turn signals are the control was
• 9:31
  it really cut that fuel to get someplace we want it to go?
• 9:34
  John Rossman: Yeah, there's a good business planning tool goal setting tool that's that's
• 9:39
  pretty popular these days. That is in line with this notion we're talking about it's called OKRs
• 9:45
  objectives and key results. And it's essentially says you set your goals, your objectives, which
• 9:50
  could be a year long or two year long objectives, but then you create key results that are probably
• 9:56
  no more than 90 days, right? And well, those these are the key things we're going Gonna get done over
• 10:01
  the next 30 to 90 days that we believe will lead to this objective. And so it just helps create
• 10:08
  this kind of zoom out zoom in, you know, kind of mindset that we're talking about.
• 10:13
  Dan Moore: When I started out in sales at the age of 18. They said, You want to have a great summer
• 10:16
  you want to do really well, but the main thing you'd focus on is the next two hours.
• 10:20
  John Rossman: Yeah, I've got two boys that have just graduated college. And, you know, one of them
• 10:25
  asked me, like, what's one thing you do that you think you think I should do? And I said, on Sunday
• 10:30
  nights, I sit down, and I write my to do list for the week, you know, that's, that's the timeframe
• 10:36
  that helps me out is thinking about the big things I need to get done this week. And I actually think
• 10:42
  forward to the next week, because so many things are like setting up meetings, and you typically
• 10:47
  need two weeks to kind of get a meeting set up and everything. And that that, you know, kind of to do
• 10:52
  list orientation is, you know, a real healthy little habit.
• 10:57
  Dan Moore: Right? Would you say that's one of the ways that you keep yourself in a strong motivated
• 11:01
  mode, instead of just going into the coasting mode, and sitting back and enjoying all the
• 11:05
  accolades?
• 11:06
  John Rossman: I love problem solving, like I love helping a team see a path where today they don't
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  see a path, that's that's ultimately, it's, it's kind of my superpower, it's what I really enjoy
• 11:20
  doing. And, and seeing a team achieve success and see potential where they were kind of stuck
• 11:26
  before. That's what really is the fuel in my tank. These are just kind of some of the tools that help
• 11:33
  keep me prioritize relative to to achieving that. And I love sharing it, I love writing the books
• 11:39
  that I do. And that helps me think better, and helps pass it on.
• 11:44
  Dan Moore: So problem solving is a really cool thing to talk about for a second because you have
• 11:48
  the ability to take a perspective that maybe person too close to can't really see what other
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  kinds of insights would you put to people that are faced with problems? In general, I guess, what's
• 11:57
  the mindset you would adopt toward what people would say as a problem instead of throwing their
• 12:01
  hands up in the air?
• 12:02
  John Rossman: Well, there's lots of little tricks, right? Problem, reframing can be a really powerful
• 12:09
  tool. And reframing just basically says, like, restate the situation, your problem in different
• 12:16
  terms. And that can help you see things from a different perspective, I think, again,
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  understanding kind of like what you're in control of, versus what you're not in control of is a
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  helpful thing relative to problem solving. And so many times, especially in business, one aspect
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  that doesn't get explored enough is incentives, creating the right incentive systems, especially
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  when you need to get people you know, in your ecosystem moving to help accomplish something,
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  thinking through incentive systems is a is a real interesting way of exploring, like, oh, a
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  different way of creating action, right. And so that's where, like, systems dynamic is a powerful
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  framework and study to use, because it helps show the forces between different organizations
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  capabilities, factors that are in play. And so you start to see the relativity and how these things
• 13:14
  work together. And you'll spot opportunities. Amazon has a famous version of kind of their
• 13:19
  system dynamic. It's the Amazon flywheel, and it basically was a simple articulation of their
• 13:25
  business strategy. And so it allowed us to state our business strategy, both to our team and to the
• 13:32
  market to the investors and so that everybody could get it. It was a simple but not simplistic
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  point of view of communicating what we were trying to get done, by adding selection by adding sellers
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  to create growth, which created a great customer experience, which spun the flywheel that's a
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  system dynamic mindset at work. And some of those tools for some of the more complex and dynamic
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  situations can be really helpful.
• 13:58
  Dan Moore: And flywheels are all based on momentum and keeping that momentum strong.
• 14:02
  John Rossman: Partly, it's like, what's the most leverage position where we insert energy that can
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  be resources, time, effort, energy to help create that moment? Because oftentimes, like, Oh, we
• 14:14
  don't, we're not getting that momentum, or we need to create that momentum or accelerate that
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  momentum. And by having an understanding of that flywheel, then you understand well, that's my
• 14:24
  point of leverage. If I put a little bit of pressure there. The theory is, the hypothesis is,
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  is that that will create momentum that we get to take advantage of.
• 14:35
  Dan Moore: You spoke about an incentive systems job. What about incentives that don't involve
• 14:39
  cash?
• 14:40
  John Rossman: There's all sorts of incentive systems that don't involve cash. And you know, so
• 14:44
  when I think about like the Amazon market place of business, we had to think through incentives of,
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  well how other than just sales, how do we create incentives that help our sellers do that? right
• 15:00
  thing on behalf of our customers, which was a key part of the flywheel. So we, we developed a set of
• 15:08
  tools and a set of measures, KPIs, key performance indicators, metrics, that gave the sellers in a
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  very scalable way, meaning we didn't have to put a lot of ongoing effort to it. We built tools and
• 15:21
  technologies that helped them do the right thing. And then some incentives to motivate them to do
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  that, for example, if they started slipping on in stock percentages, or on time delivery
• 15:36
  percentages, guess what their search results started to dwindle down a little bit, you know, in
• 15:43
  everything. So you could say, well, that's a cash incentive. It's kind of an indirect cash
• 15:48
  incentive. But it's not a direct penalty. It's a subtle, like you do the right thing, we're going
• 15:53
  to help you add a little bit more you don't treat our customers well, we're going to penalize you a
• 15:58
  little bit.
• 15:58
  Dan Moore: So that's an example using the right kind of leverage all focus on what's best for the
• 16:02
  customer, that obsession with the customer experience, right? You know, a lot of our
• 16:07
  listeners are in pretty good pathways in their lives right now. Things are joyful, and they're
• 16:11
  feeling good about things, got some others that are kind of discouraged, and they're kind of down,
• 16:15
  what advice would you give to somebody that has just hit a point where they don't know where to
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  turn, they don't know what to do next, I guess seeking words of encouragement.
• 16:22
  John Rossman: You know, I'd say you learn something that you can put to work today, right.
• 16:27
  And that could be in your job could be in your life, that would be one thing. And then when you
• 16:32
  feel good physically, it tends to help you just be more optimistic, like I believe in the power of
• 16:40
  exercise, not just because of the physical benefits, but because of the positive mental
• 16:45
  benefits out of it. And so if you're not feeling great, go get a good workout in.
• 16:50
  Dan Moore: It gets the endorphins moving in the bloodstream in the right direction. But also, it's
• 16:53
  a feeling of pride and satisfaction that we did something that maybe the moment we didn't feel
• 16:57
  like doing. That's right, you get something done. Kind of a reminder that if we can get one thing
• 17:01
  done, we can maybe get another thing done just breaks that logjam of not going into your action
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  at all.
• 17:06
  John Rossman: It's just the habit of kind of taking the next best available action, right like
• 17:11
  that back to something we've already talked about, which is like, you know, when something's got you
• 17:15
  down, will perplex just be leaning forward and asking, well, what's the next best available step?
• 17:20
  Dan Moore: That's a good one, because often, the next step is not going to look like the best one,
• 17:24
  but he's the only one available. If it is we're going to take it otherwise, we're going to assess
• 17:27
  and take a better one. But we opened up by you sharing that your early schooling helped you
• 17:32
  understand the importance of high standards, people with high expectations that you've not
• 17:36
  experienced that before, at a more of a societal level, is there something we can apply from that
• 17:41
  to our nation to help people be the shining city on the hill that was once envisioned?
• 17:47
  John Rossman: I think the ability to have open discourse, respectful discourse, and welcome
• 17:55
  contrary views insincere ways, that is the basis for so much that can be accomplished nationally,
• 18:03
  internationally, whenever you can understand others better, I think that you learn and you
• 18:09
  figure out where you can make progress. So one of the leadership principles, talks about this, learn
• 18:17
  and be curious as the leadership principle, leaders are never done learning and always seek to
• 18:22
  improve themselves. They're curious about new possibilities and act to explore them. They seek
• 18:27
  diverse perspectives and work to disconfirm their beliefs. And what we tend to do is just live in a
• 18:35
  echo chamber, right, like people telling us what we already believe in. And I think in both
• 18:41
  business, as well as societal that that's, that's a danger when all you're hearing is the stuff that
• 18:49
  you absolutely believe in, that you need to be open towards discourse and hearing things that you
• 18:55
  may not necessarily believe in. And that's what real communication is.
• 18:59
  Dan Moore: Avoiding those subtle forms of conformational bias.
• 19:02
  John Rossman: That's right, that I mean, that is what confirmation bias is is just listening to
• 19:07
  stuff that tells you what you already believe.
• 19:10
  Dan Moore: John, thank you time with you goes really really fast. I appreciate your insights.
• 19:14
  Appreciate the life that you lead, and the good things that you've done for our world and know
• 19:18
  that you will continue to do.
• 19:19
  John Rossman: Thank you and back atcha, thanks for everything that your show does and the
• 19:24
  conversation.