Book: Working Backwards

In the book Working Backwards, Colin Bryar and Bill Carr share stories about Amazon’s culture and leadership. Below are two lessons I found interesting and helpful.

Team structure

Like many other people, I was familiar with Amazon’s “two-pizza team” term before reading the book. The idea is to keep teams small (up to ~10 people) and autonomous so they can quickly get things done without other teams, and take a completely responsibility on the outcome

1. Dependencies: Teams should have no or as little dependency as possible with other teams.

Too much of any kind of dependency not only slows down the pace of innovation but also creates a dispiriting second-order effect: disempowered teams. When a team is tasked with solving a particular problem and is judgd by their solution, they should expect to have the tools and authority to complete the job. Their success should be a source of team pride.

Working Backwards

2. Focus: While the idea of a small team is intuitive, what really matters is not the team’s size, but the team’s focus (of both the team’s leader and the team itself)

The answer lies in an Amazon innovation called “single-threaded leadership,” in which a single person, unencumbered by competing responsibilities, owns a single major initiative and heads up a separable, largely autonomous team to deliver its goals. […] We all agreed at the outset that a smaller team would work better than a larger one. But we later came to realize that the biggest predictor of a team’s success was not whether it was small but whether it had a leader with the appropriate skills, authority, and experience to staff and manage a team whose sole focus was to get the job done.

Working Backwards

Input vs. output metrics

The authors describe two types of metrics:

1. Input metrics: metrics that are based on actions you can control — “… track things like selection, price, or convenience—factors that Amazon can control through actions such as adding items to the catalog, lowering cost so prices can be lowered, or positioning inventory to facilitate faster delivery to customers.”

2. Output metrics: metrics that are based on actions you can’t control — “… things like orders, revenue, and profit—are important, but they generally can’t be directly manipulated in a sustainable manner over the long term.”

What’s really important is to focus on the “controllable input metrics,” the activities you directly control, which ultimately affect output metrics such as share price. […] Input metrics measure things that, done right, bring about the desired results in your output metrics.

Working Backwards

Since reading this, I pay much more attention to whether I try to optimize for an input metric or an output metric.