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Jeff Bezos' famous rules for high output Team Behaviour

How Jeff Bezos designs Team Behaviour

By | Organisational Design

The design of high performance
team behaviour at Amazon

Jeff Bezos' famous rules for high output Team Behaviour

The number one question for every organization in the knowledge economy is to figure out how to get the highest level of creative, intellectual and productive power from their teams. This is a classic wicked Behavioural Design challenge: How do you design the ultimate high-output team? And how can you trigger team behaviour that leads to high output? Amazon CEO Jeff Bezos has got some fascinating answers to this problem.

Amazon CEO Jeff Bezos is famous for his unorthodox management ideas to get the most out of a group of talented people. At Amazon they cultivate certain behavioural design principles that are designed to challenge group-think and promote excellence. The Atlantic published a fascinating long read about Bezos in which a couple of these ideas are covered.

The two-pizza team

The most famous rule is the “two-pizza teams”-rule: Every team should be able to be fed with no more than two pizza’s. The idea is that the small teams instil a sense of ownership over projects. The downside of this design is that “employees placed on such small teams can also experience a greater fear of failure because there’s no larger group in which to hide or to more widely distribute blame” (Quote from The Atlantic).

The 6-page memo

Another rule I learned about is the 6-page memo. Quoting the Atlantic again:

“Amazon has a raft of procedures to guide its disparate teams. Bezos insists that plans be pitched in six-page memos, written in full sentences, a form he describes as “narrative.” This practice emerged from a sense that PowerPoint had become a tool for disguising fuzzy thinking. Writing, Bezos surmised, demands a more linear type of reasoning. As John Rossman, an alumnus of the company who wrote a book called Think Like Amazon, described it, “If you can’t write it out, then you’re not ready to defend it.”

The six-pagers are consumed at the beginning of meetings in what Bezos has called a “study hall” atmosphere. This ensures that the audience isn’t faking its way through the meeting either. Only after the silent digestion of the memo—which can be an anxiety-inducing stretch for its authors—can the group ask questions about the document”.

What a fascinating intervention to design high performance team behaviour! By simply asking people to pitch their plans in a 6-page narrative, they are forced to think very clearly about the problem and the solution. And by setting up this “study hall”-ritual at the beginning of the meeting, you know that your text will be read thoroughly and that you will be shredded if you didn’t think things through.

Behavioural Design is the missing layer

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Culture is not about values, but about behaviour

How often have you been in a session in which you are asked to think about core values that define the culture of the organisation? I think this exercise is total crap. The whole idea that a team can cough up core values based on a brainstorm is insane. Values, beliefs and cultures are shaped by how the team interacts. And how the team interacts is by large determined by how the little rules, rituals of habits they installed to shape their interactions. If a team is committed to a daily check-in, a proper check-out of every meeting and a weekly retrospective in which they share a round of constructive feedback, they will think of themselves as totally committed to growing and learning. They will think of honesty and feedback as something they simply do as a team.

Organisational design is about designing decision-making

There was another passage in the longread about Jeff Bezos that I thought was fascinating:

“What is Amazon, aside from a listing on Nasdaq? This is a flummoxing question. The company is named for the world’s most voluminous river, but it also has tributaries shooting out in all directions. Retailer hardly captures the company now that it’s also a movie studio, an artificial-intelligence developer, a device manufacturer, and a web-services provider. But to describe it as a conglomerate isn’t quite right either, given that so many of its businesses are tightly integrated or eventually will be. When I posed the question to Amazonians, I got the sense that they considered the company to be a paradigm—a distinctive approach to making decisions, a set of values, the Jeff Bezos view of the world extended through some 600,000 employees. This description, of course, means that the company’s expansion has no natural boundary; no sector of the economy inherently lies beyond its core competencies”.

Amazon is a paradigm, a distinctive approach to making decisions. That’s what makes the company so dangerous. The reason why they win in nearly every market is that they figured ways to analyse customer preferences and needs, build technology to cater to those needs and most of all: they know how to quickly turn this into success because they have a set of rules that allows them to make winning decisions much faster than their competitors.

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Real Artist ship - quote

How to design an innovation habit?

By | Organisational Design

The organizational habits that
produce innovation and growth

Real Artist ship - quote

Why are some companies more innovative than others? I want to argue that they have habits in place that produce more ideas and habits to get those ideas shipped. As Steve Jobs once famously said (paraphrasing William Gibson) : “Real artists ship”.

In this blogpost I want to explore this innovation habit, based on our 8 year experience with collaborating with teams.

The habits that kill innovation.

Dozens of books havebeen written about this subject, but from our own experiences on running behavioural design sprint, these were the most common habits that kill innovation:

  1. No research culture / a crisis of curiosity. The bigger a company get, the more out of touch it becomes with how real users think, feel and behave. Managers rely on abstract data, like market shares, sales volumes, etc. The more detached they become from the real customer, the less probable they will be able to spot exciting opportunities.
  2. No ideation culture / a crisis of imagination. Once an organisation outgrew its startup phase and entered its scale-up phase, the whole mindset of the organisation is focused on growing the business. Most businesses organise their process around building the existing product offering. Moreover, to achieve this growth mindset, a specialisation of roles is required. Everyone, from the product manager to marketing manager, digital manager, UX-er, and communication manager, is expected to perform on their specific domain. This results in a decreased capability of the organisation to think out-of-the-box and to think outside-in. Nearly always, the exciting opportunity for innovation transcends the boundaries of the specific discipline.
  3. No prototyping culture / a crisis of experimentation. The more an organisation specialises, the more we expect those specialists to know what they are doing. This expert fallacy is a well know organisational problem: Because we are expected to be experts, we are more inclined to act like experts. The more we think we know, the less alienated we become from discovering the truth. Not knowing is perceived as weakness in these companies while every successful startup knows that aggressive experimentation is the nr one secret ingredient to growth.
  4. Conflicting incentives / a crisis of management. The problem with innovation in most organisations is that everyone, including management, is hired to execute the strategy. Not only are they hired, but they’re also reviewed based on the execution of the strategy. When your promotion depends on hitting the targets, everything related to new ideas will be perceived as a distraction.
The net effect of these habits is total inertia. Even in the context of declining market share, missing targets and aggressive competition, all the forces in the organisation seem to pull people towards repeating the same strategies over and over again. The habit of keeping doing what we always do is just too strong.

Behavioural Design is the missing layer

Join our Behavioural Design Academy and learn how to positively influence minds and shape behaviour

The habits that boost innovation

Innovation is not a goal as such. Innovation is always a function of growth. Some organisations are far better than others to spot opportunities, come up with ideas, test them and succeed in actually shipping them. Whether they improve the product, marketing, process or campaign, the value of new ideas is that they succeed in contributing to growth.

That’s why we need to study the innovative power of an organisation as a habit problem. Innovative companies have habits in place that trigger more curiosity, ideation, and experimentation. Continuous improvement is their default mode. We have facilitated sprints with many teams. Most of them don’t call themselves “innovation teams”. They’re product teams, or growth teams, or customer experience teams. The biggest challenge they all face is to improve their output to generate growth for the business. There are four team habits we came across that strongly correlated with the creative and innovative power of a team:

 

  1. A deep love-relationship with customer problems: Innovative teams are in love with the problem of the customer. They relentlessly talk to customers or observe them in the real world and try to spot opportunities for helping customer to overcome pains, break bad habits, take away barriers and achieve goals. They are always asking themselves the question: How might we help our customers to be more successful
  2. A fast process for generating ideas: Innovative teams have proper ideation sessions. They follow the core principles for group creativity (like brainwriting and dotmocracy) and treat every idea as an interesting hypothesis. In a well designed creative process, the individuals come up with as many ideas as possible and the group decides upon which ideas are worth experimenting.
  3. A process and tools in place to prototype and ship: Great teams have a maker-mentality. They always try to figure out ways to prototype their ideas and test them in the real world. This allows them to increase their learning curve and their success rate rapidly. An essential condition for allowing this to happen is to have an infrastructure that allows experimentation.
  4. A cultural shift that promotes, rewards and celebrates braveness. This is by far the most important habit. Very often, the problem is cultural. If the organisation is number-driven, then you’ll always end up with all kinds of triggers that incline people to believe that following the rules and reaching targets is what the organisation expects of them. However, if you want to create a culture of experimentation, then you’ll have to embrace failure, promote and rewards braveness. People need to experience that experimentation is being expected of them.

Incremental versus radical innovation

In the literature on innovation, quite often the distinction is made between radical and incremental innovation. Incremental innovation is the optimisation of the existing products and services, whereas disruptive innovation is the more radical ideas to transform the business.

To be honest: I think this distinction is a bit artificial. If you think about the innovation habits we described above, then they are about being radically customer-centred, about having a maker-mentality, and a culture of experimentation. Out of this habit, both incremental, as well as radical ideas can emerge. The only thing an organisation needs to have in place is a fund to invest in the rapid prototyping and testing of some of the more radical ideas.

 

What this means for innovation leadership

When approaching the problem of innovation in organisations from this perspective, I thinkthe role of an innovation leader in a company is to help to build the innovation habit. I don’t believe an innovation department – as the place where innovation is happening -isthe solution.

An innovation leader / or innovation tribe should be a group of people that facilitate and train teams to install the innovation habit. If new radical ideas come out of this process, they should be able to invest money in them to be able to hire a team to design, build, prototype and test the idea in the real world. If this experiment turned out to be successful, then it’s their job to convince the board to invest in the concept with ambition.

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A cliche image of coaching

Personal coaching is pointless: four reasons

By | All, Organisational Design, Self Improvement

The lie at the heart of the coaching and Leadership-Industry

I’m fully aware that I will probably get hate-mail for this. But I honestly think personal coaching is a gigantic waste of time and money. Personal coaching is based on the assumption that changing the individual will lead to a change in the behaviour of the group and will benefit the company. A multi-billion dollar leadership-industry even emerged around this assumption. “If only I would become a better leader, my company would grow and my team would flourish”.

I think this assumption is complete nonsense, because of these four reasons

1. There’s a very weak relationship between knowledge and habits.

Most smokers know smoking is bad for them. Most smokers know they should quit. But with every crave for relaxation or fighting boredom, they can’t help themselves and light up a cigarette.

The same goes for coaching. Learning a lot about yourself is one thing. Being able to break your automatic interaction patterns with your environment is a whole different subject. You and your environment can’t help but repeating the same patterns over and over again. And the moment you try to change, your environment will push back hard to get you in line with what they expect you to be.

2. Individuals are overrated when it comes to making a difference

Only collaborations create breakthrough innovations. The central storyline of Michael Lewis biography of Daniel Kahneman and Amos Tversky is how these two Isreali psychologists, basically re-wrote the rules of psychology through their collaboration. which had all the characteristics of a creative-intellectual love affair. They could never tell who initiated a breakthrough insight or idea. It was the creative-intellectual tango between both of them, that generated idea after idea. Interestingly, their intellectual productivity dried up, when they got separated in the eighties.

By the same standards: There would be no Steve Jobs, without Steve Wozniak or Johny Ive. No Warren Buffet without Charlie Munger. Even the archetype of the lone genius, Albert Einstein, turned out to rely heavily on the genie of his wife Mileva Maric. I think it was Aristotle who said: “knowledge is dialogue”. So instead of looking inside for “unlocking hidden truths about yourself”, find yourself a creative partner and start playing.

In his new book “Trillion Dollar Coach: The Leadership Playbook of Silicon Valley’s Bill Campbell”, Google’s former chairman and CEO Eric Schmidt brings a homage to Bill Campbell, who both coached the Apple and Google Board at the same moment. Bill was famous for coaching the team, not the individuals of the team. As Schmidt puts it:

“You hear all the day that “I need a mentor.” Well, by the way, you need a mentor and I need a mentor; mentors are great. That’s not what Bill was. Bill was a coach and more importantly, he was the best coach of teams ever. And why do you need a team? Because a company is not an individual, it’s a team of individuals who need coaching to achieve their objective”.

 

3. You are the average of the five people you hang around with.

This is what Tim Ferris would write, if he would be given the chance to write copy on a public billboard.

The answer to becoming a better person is by surrounding yourself in your daily life with people better than yourself in different ways. I’m not saying that you shouldn’t have a mentor. But I do think that most of your uncertainties, flaws, ego-problems, bad habits and lack of energy can be attributed to the simple fact that you’re not surrounded by enough people, who push you to become the best possible version of yourself.

4. Change is about behaviour

Most of our limitations are the effect of the ecosystem we’re part of. As entrepreneurs, there was a time we worked day and night and frustrated our team because we couldn’t let go. The only way to solve this problem was to step out of this ecosystem for a while. This forced everyone in our team to step up and it provided an amazing opportunity for personal growth, and this includes Astrid and I. What changed us was an intervention that liberated everyone from a pattern we got locked into. No personal coaching could have solved this problem.

 

The Behavioural Design of Personal Growth

How does this relate to Behavioural Design? At SUE we think of Behavioral Design as a set of methods and principles to change behaviour, through the design of interventions that nudge people’s choices in a desired way. The more we work on big themes like happiness, excitement, creativity, productivity, etc… the more we discover that you can’t search for those values within yourself. They are the effect of the behaviour you are nudged into.

By the same standard we think of professional growth as just another Behavioural Design Briefing. If you want to grow as a person, simply create a context in which you are triggered into behaviors that lead to growth. The best way to achieve this is to come up with interventions that force a group to give more feedback. to engage in continuous learning and to experiment aggressively. Our Behavioural Design Sprintis an example of how the design of the process forces the group into these positive behaviours.

Want to learn more?

If you want to master the science of influence yourself, you could consider enrolling in our two-day course Behavioural Design at our SUE | Behavioural Design Academy. You can download the Academy brochure.

Or maybe you currently have a challenge in which you want to influence choice or change behaviour. Please, take a look at our Behavioural Design Sprint. It might be the answer you’re looking for.

Or could be you just would like to get to know us a little better. We happily introduce ourselves here.