EP181 -'Think Like Amazon' Author John Rossman

EP181 -'Think Like Amazon' Author John Rossman 

John Rossman is a former Amazon executive who helped launched and scale the Amazon Marketplace, and he’s the author of “Think Like Amazon: 50 1/2 Ideas to Become a Digital Leader“.

In this wide ranging interview we cover some of the 50 ideas from the book about how Amazon operates, as well as how the ideas can apply to other businesses, and what businesses that are competing with Amazon should know.

You can read more from John on his blog “The Amazon Blog“.

Don’t forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes.

Episode 181 of the Jason & Scot show was recorded on Thursday, July 25th, 2019.

Automated Transcription of the show

Transcript

Jason:
[0:24] Welcome to the Jason and Scott show this is episode 181 being recorded on Thursday July 25th 2019 I’m your host Jason retailgeek Goldberg and as usual I’m here with your co-host Scot Wingo.

Scot:
[0:39] Hey Jason and welcome back Jason Scott show listeners Jason I am super excited I’m tingly all over tonight we have on the show
author of think like Amazon John Rossman that was published this year,
and as you and the other listeners know I have started my first consumer-oriented company,
and I’ve made it a court in and of what we’re doing to try to follow as many Amazon principles as as possible stuff like day one customer first there’s a million of them,
to beat the teams Etc and what I have found is this information is exceedingly hard to come at you have to kind of meet all these X Amazon Indians and pick it out of them and I’ve actually
unable to on the DL get a copy of some of the management principle guidelines I can’t say where I got them from,
so this book is really a welcome addition to my library I’ve actually made everyone in our management team read it and it’s actually the Bible her operations at 9
so we’re real excited.

John:
[1:46] Hey thanks for having me.

Scot:
[1:48] Yesterday I feel like we could probably go I know I could go like 3 hours on this so we’re going to try to stuff it all in one hour so I’ll turn it over to Jason and he’ll kick us off.

Jason:
[1:58] Scot and that’s a quick you know warning for listeners that if if you’re exercising while listening to show you probably want to turn down the intensity just like this could be a long one.
John first of all that’s a lot of pressure is spiffy fails it sounds like it’s going to be your fault.

John:
[2:15] It’s all in the implementation so it’s okay.

Jason:
[2:18] Smart well said so regular listeners that the show will know we always like to start by getting a little bit of background about our guest and sort of how you you came to your your current current role can you talk to us a little bit about your background.

John:
[2:33] Yeah so I was fortunate enough to play a senior role at Amazon I got to launch the marketplace business in 2002 and then I ran the D Enterprise Services business,
and when I left Amazon late 2005 started working with my clients on digital strategy and Leadership and culture,
I started to see the impact of all the principles and mechanisms and things we did Amazon get results and it was actually.

[3:04] Several years after that that I had a client of mine at the gates foundation’s at John you really out of caption this up and write a book and.
I did that and this book think like Amazon 50 and a half ideas to become a Gentle Leader you know one of the things I I like to point out the people as it really isn’t about Amazon
it’s about you and what you can take from a company like Amazon and put into your
approaches your habits your culture and I love hearing Scott talk about that you know you’re using it as an executive team and.
Worst-case even if you don’t take the ideas just talking about them as a team will help you be more thoughtful and deliberate about your what you do believe in and so these are,
authentic Amazon moves and strategies of use them with my clients since I’ve left Amazon Alexa 2005 and they really do you know you got to use the right ones at the right time but they were they really can help making it.

Jason:
[4:04] Nice and you really had to pay your dues because I’m imagining that when you left in 2005 you told people that you were doing something based on that’s how you did it at Amazon that wasn’t necessarily the instant credibility that it probably is today.

John:
[4:18] You’re absolutely right like that credibility to some degree came a number of years later but I think you know from me the craft is always been.
Really understanding the situation what the challenges and then prescribing little things to do and if you can lead people to it or says
heading him over the head you’re always more successful as an adviser and so it’s really been like
making them into little chunks and sliding them in and leading people there with good questions like that’s that’s kind of the art of being a good.

Jason:
[4:55] Interesting and one of the questions I have for you so so you left in 2005 the book If I have this right just got published this year right 20.

John:
[5:04] Maybe that’s right.

Jason:
[5:06] But reading through the book there’s a bunch of principles in it that my senses are,
relatively current at Amazon and so that I’m curious is that because,
these principles of an evergreen Inn and Jeff and Tina implemented them in the very beginning and they still carry through today or have you done some work to sort of State current on that on the Amazon Prime.

John:
[5:28] Some of both so
I was at Amazon from early 2000 to the late 2005 is a really interesting from Amazon because we were getting clear that we were really two types of companies we’re both platform company that built tools others with used and,
we were a retailer and we’re building Marketplace business but I am always testing my understanding kind of current,
techniques and approaches with my friends and in former colleagues at our am at Amazon or just left.
And although the company has changed a thousand times since I was there
how they approach their work is unbelievably consistent since I was there and I think that’s really one of the secrets of how Amazon has scaled is
is how they approach their work how they work together how they hold people accountable what they believe in what they prioritize how they make decisions how they use metrics,
that is consistent across the entire organization and that lets them scale scale as they are.

Scot:
[6:37] Brickell to their limited time we can’t go all over all 15 1/2 principles so we thought we would pick a couple out that we’re are quick oats favorites and then
so that this can be kind of one segment that we go through, and then
there’s there’s a bunch of questions that we get a lot as we talked to various retailers and other folks that are kind of trying to live this Amazon lifestyle,
it’ll come up and then talk about the implications for the industry and then finally you know how do people take the knowledge that you’ve captured Sawan the book and apply it to their business and I know it can be hard to fit all those and try to cut it into,
into some some chunks there,
one of my favorite ones is kind of spend a lot of time working with Amazon eBay Google Etc and I’ll pick on eBay a little bit and then have a,
interacted with him in five years this way but back in the day in the John Donahoe Meg
what world you good eBay and everyone was working on Powerpoints and like all day and do it simply you know the lowest level people would work on a PowerPoint no passing their boss they would pass it up,
1 appleside what in the
the Meg Whitman presentation and they just seem to be spending all their time on PowerPoint and then I learned very quickly that Amazon is actually outline outline PowerPoint in the way they run meetings is very unique give us a rundown of that,
what was your reaction when your first confronted with it.

John:
[8:02] Yeah so you know the general principle or approach is that you know all important ideas all root cause analysis all
big projects and proposals are written out there’s there’s a kind of six-page version of a 6-page narrative and there’s a couple of other tools to go along with it.
Writing out ideas in in full paragraphs full sentences for specific audience to,
for specific objective has a few different benefits first of all it forces the the author or the people that are offering the document,
to get to Clarity and clarity as relief both Simplicity as well as completeness of thought in.
Get there with PowerPoint that writing things out horses that team to make sure that they are actually,
not talking past each other and we ran our green on whatever the important aspects are that you need to convey to your audience management meetings instead of.
Having somebody presented actually start with 15 to 20 minutes of silence or leaders are half.
Put the phone away but the computer way and actually read and digest we use the word grok a lot of the Amazon which music deeply in.

[9:19] Then conversation ensues from there in it and it forces everybody to 2.
Have a better deeper understanding of what’s being discussed in the in the implications of it,
and then the last benefit is it’s much easier to forward onto others that need to,
be connected with a conversation but weren’t part of the meeting right and one of the great limitations of power point is that most of the time you still need to have somebody,
along it to actually explain it and where is a narrative should be a standalone documents so it is what I consider a championship discipline even if you’re only writing things out for yourself,
forcing bully written ideas.
Through all of the non-obvious situations issues risks things that can go wrong how to explain it better to still think that through so much better and as a team.
I really consider it one of the go slow to go fast moves which is if you spend more time up front.
Defining what the mission of the project of the program is you’ll be able to make it smaller because you can have better,
refinement of what your hypotheses are what you want to test and get down to just the bare metal Essentials of what the project is and you know that’s the whole minimally viable product in agile mindset.
And then you can proceed with it on scale because everybody better understand what it is that were proposing.

Scot:
[10:49] Call Sue a couple of kind of
questions I get when I talk about this with other folks and I’ve never been in one exams on meeting so I don’t know the answer so I’m excited to hear your answer is it awkward sitting in the meeting reading and in the first shift.

John:
[11:05] What would certainly different right and so it’s not that the norm of what you expect.
You know when everybody understands like you know this is what we’re doing then then and you practice that you need to practice it both as individuals and as a team.
You’ll start to see the impact that it has so yeah it does seem awkward because it is not,
warm but it’s it’s a powerful approaching,
I work with clients on this like I don’t I don’t go for a we have to adopt this across the board but for important programs important changes important strategies.
Completely changes the level of comprehension and thoughtful discussion.

Scot:
[11:52] Closer than I’ve also heard from a lot of my my Amazon and friends that Jeff Jeff Hostess regular quarterly business reviews and they’re in their help in this format and then every noise has a just already have a good story from blazing.

John:
[12:07] Oh sure you know in the qbrs tend to be more about you know the business results so they tend to be more metrics-driven
the narratives are more about it young What’s called the op-1 process the operating plan one process where you’re talking about like what we might do in the future and rationalizing your plan in your resources.
Yeah one of the the great stories I have is memories I have is that in,
early 2003 we had launched the apparel category on the marketplace platform for Holiday 2002.
And we were just working on getting Sporting Goods out out but we were having an s team meeting just ask Migos John.
How many Merchants have relaunched sense the holiday and I started to explain that we essentially had none that we could launch any any any stopping goes the answer to that question and so I say six,
but and then he just he just stands up and he just talks about that that’s the most pathetic answer ever and that I had allowed,
kind of a hard that you see things in the business account hard things in the business and got it. But it really was just a message to me and everyone.
Although my job was director of merchant integration she wanted me to.

[13:35] Like I ran the entire Marketplace this is so if there were bottlenecks or slow down or or other functions in Amazon routes out of Amazon,
we’re slowing us down in launching.
Don’t pay attention to my job title like work the entire system take accountability for the entire end and process from.

Jason:
[14:05] I’m not sure great moment is exactly how I check her I walk.

John:
[14:09] Do you know those are those are Priceless so right and you’re one of the things I took away from that is like.
Answering direct questions directly is a really.
Subtle but important skill in working with senior people and ever since then you know and I thought I was a partner in a big consulting firm and work with life consultants in Psych the,
answering a question directly and then if somebody wants more explanation they will ask you to double click into it and everything right with.

Jason:
[14:46] Yep when when Jeff does single you out do co-workers tend to have some empathy.

John:
[14:53] I think everybody just understands the the kind of game and that it’s technically not about you it’s about just,
making sure that the entire organization isn’t becoming complacent or paying attention detailers young really living up to the values of the Enterprise and stuff so I don’t,
I never took it you know to personally and I I don’t.

Jason:
[15:18] So
side note you know I work for a big big agency so anyway we’ll use a half a lot of and these days our clients want Amazon expertise so I have a lot of X amazonians on my team and.
Inferno you’re with this principle I was super excited that I’d hire all these excellent amazonians and that be really thoughtful Drake,
writers of narratives and it hasn’t really work out that way what I mostly get are people that do really bad PowerPoint because they’ve had this repressed desire to make slot.

John:
[15:53] In in and so is as you say that and think about that what are you what are you going to take from that is it is it because it it doesn’t work or you know what I think.
Does take an immense amount of effort and I think people can wear out on it.
You’re in the right place for the right and I have found a powerful but yeah I’d be interested in what like what you what do you think away from that fact they stop servation.

Jason:
[16:25] Yeah it was mostly joking but I do I mean in seriousness I I do think the answer is somewhere in-between I utterly convinced that The Narrative Approach and along with that the press release which is kind of the,
imagine.
Visualize that outcome is beginning the process I feel like that is a an excellent thoughtful way to approach particular types of meetings like that that op1,
meeting that you’re describing.

John:
[16:55] And you know what I did sometimes do with our clients is.
Team will write the narrative but then we end up turning it into PowerPoint cuz that’s just what management is used to and everything.
Our ability to succinctly communicate is so much better because we’ve hashed through writing out the narrative so I’ve done all sorts of had a hybrid versions of this.

Jason:
[17:20] For sure and I guess I would say like I think it actually is a value in a very well-crafted well delivered,
presentation it’s it’s to solve an entirely different problem like it’s not that facilitate a meeting.

John:
[17:38] Orchard Orchard deeply explain sometimes you know what can be a fairly complex idea in a consistent scale of a way right.

Jason:
[17:47] Yep and that’s so yeah so it sometimes to evangelize something like after those decisions have been made or to communicate to a very broad audience or things like that you know Visual Communications.
Can can be quite affected by feel like they’re both good,
good tools for the right problems and I think there’s an awful lot of misuse of both of those tools and when their misuse their does that.

John:
[18:13] Switch to some degree I would caveat all of these ideas which is the need to be used with wisdom right to the right the right idea the right approach for the right circumstance,
it is contextualizing to what’s going to work in your organization and so they can’t use LINE leaks,
and so I would I would kind of take this discussion about narratives and how to use them appropriately in caveat all of these.

Jason:
[18:42] Yeah so I’m moving on to the next idea we wanted to talk about this is one that that comes up a lot is the two Pizza team approach so I can actually what you described it and and a little about.

John:
[18:57] So so a two Pizza team is a specific type of team at Amazon that owns a service or core capability right so this could be.
The type of service that that you see on the website to be like the promotion service or the image service but it can also be a core,
back-office function like the inventory received process or the item forecasting process right,
it is a capability that you truly need to be great.
Two Pizza team is a small team ideally a team no larger than 10 the ideal to actually team of 1.
Owns the service in entirety and and that team owns the the.
Product definition product management engineering operations of that service in their goal is to drive adoption of that capability book inside of Amazon and,
xtro Amazon Amazon.
Lego blocks the service oriented organization concept,
and it’s a two Pizza team that owns a core capability and is expected to operate it at a world-class level.
When we forward over long.

Jason:
[20:23] Got to end that metaphor is no more people than could be fed by two pizzas.

John:
[20:27] That’s it yet so it’s a team no bigger than 10 which is.
Ashley went to pieces can see it is a cross-functional team often times it’s got a heavy kind of software engineering bent butt.
Sometimes a lot of you know business participation could have legal participation in it but it but it says it is a 8.
Ideally a fairly independent operating.

Jason:
[20:53] And I am that is a key component of it right is that it’s they’ve relatively constrained their dependencies outside of that team so that I almost make it a sin to sort of like object-oriented programming where.

John:
[21:07] That’s right into its instead of a service-oriented architecture you have a service-oriented organization to compliment a Target this is all about.

Jason:
[21:21] Lacon Scott Scott and I actually tried to implement to Pizza teams for the podcast and we found that the pizzas would only feeds Scott and I so we had to stick with it to me.

John:
[21:29] Well that’s the ideal two Pizza team small small independent team.

Scot:
[21:32] Let’s call the Dream Team one question I have on that is this team of 10 people there cross-functional
do you use kind of like the old school language of a matrix organization so is is the I’ll pick on the.
Made it seem as like a lawyer or a finance person,
is that person like reporting to the team lead there or are they essentially over in the corporate legal admin structure and they’re just kind of like sitting on the team and then how do they.
The problem with the Matrix organization is you have two bosses and very quickly get your trays to get misaligned on this how how does how does the two Pizza thing working in those situations.

John:
[22:16] Yes so you can have a mix of both so the pure two Pizza team is only dedicated to that service in that mission in in that capability sometimes,
that could have a fully dedicated illegal or maybe business development person.
Finance is always Matrix in because the the goal of mine answered Amazon is actually very strategic it really is meant to be an independent party both supporting and validating,
the opinions and decisions and financial analysis that goes long until you so you want to have a degree of Independence there.
I think when is the the ideas that goes along with,
the support teams is support teams and it actually idea number 12 in the book which is called gets yes Finance Tax legal in HR teams that matter and you know so many expert at most organizations,
what’s a really good at is pointing out all the reasons why you can’t.

[23:28] Finance teams at Amazon are more oriented and their mandate is really help you get to yes.
And in that might sound like a subtle.
I might should move but it makes all the difference when when they feel and act like an owner in an owner to helping this New Concept.
Business partner gets yes so most of the time.
Key functions like tax legal Finance are Matrix in the organization but the mindset is they they are a business partner.

Scot:
[24:07] So then you know when you when you have all these things like the finance teams helping me get to yes disagree and commit and all that when do you ever say no to something and then Sue says.

John:
[24:20] Will when when when the when the data and when the customer experience you know what kind of justifies saying to Noah,
apart strategy it’s is saying no and I think Amazon is a very disciplined job,
thoroughly thinking through something but then say no right sometimes that simply constraint that’s right we only have the resources the capability to do,
these two things we have five things in front of us we have to rationalize which ones we do or what order.

[24:54] Compromises saying No in fact I think in some ways it helps you.
Be much more deliberate about what you’re saying no to and what you’re saying yes to and then when you say yes to something.
Everybody’s on board with that and we aren’t having a bunch of leakage or kind of Shadow projects going on where you know we didn’t really say no to it so kind of try to sneak it in like that is not in general that the Approach at Amazon like,
very clear that’s a big part of you know that I reference it that the op-1 process is bringing forward all these near as all these ideas all the things we could do.
Then ruthlessly selecting the select you that we can afford to do,
Amazon.
Extremely well both in their operation but in releasing new capabilities they do it much faster much better than most large organizations.

Jason:
[25:57] Yeah yeah one of the ways I’ve heard Jeff describe it that that I thought was pretty interesting was any talk about traditional Enterprises and like any one single senior stakeholder can kill an idea and.
Idea just you know dies on the vine right there and he talked about wanting Amazon. Almost be more like.
The Venture Capital Community where you know you can pitch the idea to a lot of senior stakeholders and you just need to get one sponsor to say yes.
Now that allows you to try to get that initial funding and and be able to take a project far enough to know to learn whether it’s going to work or not.

John:
[26:33] And I think one of the powers of this approach is the ability to think big but you got a bet small right until how to how then with a big big concept like yep we don’t fully understand we don’t know if it’s going to work we call that thing of that.
Maybe not everybody is bought into it but together we go hey whoever the decision-maker is they’re saying yes we wholeheartedly by Intuit,
but then how do we proceed on it with as little.
Risk and as much learning as possible Right End and we’ll talk about this unit have a sale fast mentality in really what we mean by that type of failure is the scientific.
Disciplined testing process right that’s the type of failure were talking about his learning not true failure like failure of execution,
and so having that disappoint us having a big Vision but then making the project a small as possible test learn to adjust,
do we proceed we not proceed how do we just next step we do that like that is the complete agile Manifesto.

Scot:
[27:36] Cool suits moving on idea for and in this kind of permeate solid Amazon and it’s in in multiple ideas but kind of customer Obsession starting with a customer working backwards do your time frame there,
what’s an example you saw that it really kind of a Illustrated.

John:
[27:57] Yeah so I mean in Scott this is a business you probably know if a lot better than I do actually at this point which is the marketplace so when we were launching the marketplace business.
We’re launching it in the fall of 2002 we’re launching in the apparel category,
we we were you know we were nobody in this category right and so we were pursuing several big meaningful Brands and what most brands wanted was for us to pass the customer.
Cards to them and they would process the credit card instead of Amazon processing the order of the charges in this just passing forward the the order confirmation commitments on to the client.
And we felt like it was essential to the customer.
Experience with customer trust that Amazon be the only party that actually had,
the confidential in a payment information that we didn’t pass up forward we had to make some really tough decisions we passed on several really important brands in our in our parallon.

[29:10] Me like when you’re willing to walk away from from dollars in order to stick your.
Your example to me where where our understanding of our brand and customer Trust,
really letters into what I think was a really pivotal moment and I think I think over a long. Of time one of the essential strategies for why the marketplaces were.

Scot:
[29:37] Yeah one of the other nursing case study is Amazon had not if they had to acquire them but they acquired Zappos because Zappos was even more obsessed around the customer than Amazon with the ugliest shoes the the
unlimited returns 365 than all that but is there a point where you can take it too far since this is one thing the.

John:
[29:58] Sure absolutely,
it’s the first of 14 leadership principles is just one of 14 right and so again it comes back to the scene of these concepts with wisdom.
You can over index on any one of them at any point it’s it’s kind of like metrics right you always have to have a balanced scorecard with the same thing with how we approach things and so.
Customer obsession is really what good is.
Amazon and gives others the permission to do really weird things and to understand by customer extremely well that doesn’t mean.
You don’t have to be extremely mindful of the financial implications or the operating consideration or other aspect approaches are,
when you’re using them a couple of them.
One time and where they’re pulling on each other and that Force forces you into a completely new inside her observation not over-indexing on anyone.
I need you to bad places if that’s the only tool you use.

Scot:
[31:17] Is Amazon giving any guidelines for bounce in the principles.

John:
[31:21] You know that’s a great question I haven’t seen any,
I think actually one of the principles kind of lens itself to this macro perspective which is principle number for which is leaders are right a lot right in that that kind of says like basically you have to have extremely good
judgement which of these things use of right time in the right notes.

Scot:
[31:47] Cool it another question I have this is one that’s been frustrating to get information on is I’ve heard several people say that every cuss word Amazon has this this kind of metric I’ve heard it called sugar and
you know there’s when the customer service rep on the other line is talking to Jason he has like sugar level 2 million cuz he gets like 10 packages a day so so they that gives them a fair amount of flexibility in,
replacing a device or something like that but you know there is a customer that can have a very low or even like a negative sugar rating and then the customers this customer service reps know to kind of
this is kind of a perennial return abuser or you know someone or whatever the algorithm is is looking at is is not a not a
premium customer and then the customer service rep has a different set of of kind of the cat box at customer in more tightly.

John:
[32:42] I haven’t heard of the of it being called the the sugar metric or the sugar index that’s a great concept. I’m going to check in with some Amazon people but no doubt Amazon has.
Customer segmentation and they do different things for different customer segments I think I’m.
You know what I talked to your Prime customer you know and everything right Amazon when I go to return a package,
you know the commitment they make is when it’s received at the Fulfillment center are they expected the issue the credit in my packages at UPS the credit is restored to me right and so they obviously like you know this actually helps,
promotes John,
pinemoor instead of my lesson so we are going to accelerate the returns processing in and refunding his funds to him and everything right.

Jason:
[33:43] Yeah that makes sense I want a pivot just lately there’s.
Often when we talk about these these principles with with folks date they have some Percy reason why that principal won’t work outside of Amazon or in their particular case.
Common objections over and over again so it’s one of the principles you have in the book I think it’s been swell 43 is the,
the bar raiser program and we’ve been lucky enough to have a couple buy razors on the show.
When we talk about you know that your net net Amazon has a super rigorous hiring.
Other clients are other readers are are fearful that having that rigorous of a program like don’t you eventually like make it impossible for,
are you to be able to recruit and be able to hire new people and don’t you with this dichotomy where you have people with tenure and seniority,
yeah and then you have like the most rigorous we hired down at people came later.

John:
[34:45] Yeah you intend you know that kind of consideration is is is very real and.
This mystery I tell in that particular idea is really if I reflect back on my career.
The biggest mistakes I’ve made have been when I’m hiring in a hurry right I’ve got a job at project,
I’ve got a candidate that fits the bill but maybe,
that person like they they don’t have either the right you know kind of organizational alignment maybe there’s a limitations like I think they could do this type of project,
rest with your organization but still you move on it because you’re hiring in a hurry and so the bar raiser program one of the benefits of our radio program
party from Over the hiring team in the hiring manager is they don’t have that sense of urgency that often times the hiring.
They don’t become as compromisers.

[35:51] Typically as the hiring team does it say whether you and then in this is kind of how I wrap up the idea you know however you go about it Amazon however you do it,
think about how do you avoid,
hiring in a hurry and end your worst types of iron to stage with her hiring for short-term results versus a long-term career
because those are often times The Hardest Mistakes the most expensive mistakes that you live with in the business for a long. Time and that’s really the spirit
of the bar raiser program at Amazon which is which is hiring not just for the job of today but for the jobs of tomorrow and T.

Jason:
[36:37] Yeah yeah there’s a professor at Warden that Adam grant that does a lot of research and inserted organizational management and he has a thing,
as important as it is to have the right team members on your bus it’s even more important to avoid getting the wrong team members on your bus.

John:
[36:55] Yeah I agree you know one of the things you know that I always think about culture and everything is everybody thinks that culture is.
Is this attribute or this Essence that attracts and keeps.
T-Pain keeps Talent one of the aspects of culture is should also repel the wrong type of talent right and we don’t think about that.
It’s fine if.
The person is qualified that isn’t the right environment for it’s not our job to make a place the right situation for everybody right and I think that that’s something that Amazon is is is very.
I would take him out of his is like it’s not for everybody Amazon is not the right place for for every great capable person it’s that it’s a type of environment for people who align with how they see the world and how they see leadership.
And and that’s I think Jean for teams as they sometimes get mistaken then you know we should be a great place for anybody and that’s not true.

Jason:
[37:59] Yeah no for sure that’s a difficult self-realization to make sometimes though I wanted to talk about another one I hear a lot of the rule 18,
in your book is about the advantages of a platform and like you know there’s there’s a lot of,
reasons that the department can be a huge Advantage but when you talk about that with a lot of other retailers like the the challenges they they lack vision and Imagination around.
What their permission to be a platform it’s because it’s probably not prime for example or am I not be a Marketplace so like you know. Do you believe that every retail entity has a an opportunity in a.

John:
[38:46] I don’t and so you know what I outlined in the chapter and in this is the type of topic I’ve I’ve worked with lots of teams on is,
it’s not everybody strategy to be a platform company but.
The exercise every team can do and help make themselves better is ask yourself.
What are my core capabilities how would I make those independent self-service feature-rich cost competitive highly available capabilities that people outside my organization could use,
what would it take to do that,
and whether it’s the right strategy to proceed on them or not you will still come up with great ideas to improve and operate an architect better today even if not.
Platform companies in right thing so in no way I’ll go back again like it no way am I prescribed.
Any or all of these ideas are the right things it for anybody but but you do have to ask yourself.
You know if I’m not a platform what am I and how would I make myself good enough.
And that’s actually the lesson that I’m trying to give in.

Scot:
[40:05] Awesome so hopefully that gives listeners a flavor of the ideas and I think we hit on may be 5 to 10 in there so so really less than 10% of the ground cover and soap hope that it was straight valuable,
the concepts are in the book we want to move over to the what does it mean kind of area so so I’ve actually I do kind of an Amazon stump speech and then
one of the first questions always get is
what’s Hebrew realize that you should count gmv in the marketplace and not revenue and therefore Amazon’s twice as big as people think that it is all that good stuff,
use it when the first questions I get is,
oh crap I see all roadkill is Amazon essentially Unstoppable what’s your answer that there must be a big part of your Consulting.

John:
[40:54] It’s a it’s a big question I think especially with in retail I think that that that it is chunky question but the answer is is what a lack of imagination if that’s the,
if that’s the the the conclusion anybody comes from I think the,
anytime you you are passionate about your customer and you’re thinking about how you can serve some unique knees there’s there’s opportunities to the innovate and I don’t think Amazon has the lock on any of that.
You know Amazon is now the kind of the from a retail standpoint it’s just the Ubiquiti.
A provider.
With so many people want if they want uniqueness and they want service and I want experience and they want personalization all of those things don’t necessarily align with who Amazon is as as a
as a retailer in so I think that there’s a kind of examples of brands that are winning out there sometimes on the Amazon,
off the Amazon artworks that I mean.
How to compete with Amazon Alexa.

Jason:
[42:07] Yes and I I mean I think there was a irrita when everyone was asking themselves if Woolworths was Unstoppable or Sears was Unstoppable at Walmart was on.

John:
[42:16] Exactly yeah.

Jason:
[42:19] I just had a pretty funny quote once like no no Empire successfully predicts its own demise.
But I sure would like my Empire to out with me.
What is a good girl you know when I’m curious about and I know this happened sort of after your 10 year there but you’ve obviously been fine and pussy.
Whole Foods acquisition and I spent a lot of time in the the grocery space and obviously that.
That that acquisition really caused a lot of people that sort of you know rethink their digital strategies and sit up and take notice but you know now that it’s it’s several years past their you know there’s a lot of.
Diverging opinions about how Amazon’s doing in grocery and and or what the future holds what do you have a POV on Amazon and grocery.

John:
[43:14] Will a I think I have some opinions both on on Amazon and Retail Store presents as well as like what.
Any leader from any industry kind of takes on that so you know that’s the first thing I’d say is I think Whole Foods just an experiment for Amazon refriend.
Just by itself but then you start thinking about you know the roughly what is it 480 Whole Food stores that there are in the u.s.
What that point of presence starts meaning for Amazon and its customers in being to either you know shop pick up in store,
drop off,
other types of of categories that can leverage that physical sort presents like Pharmacy or something like that and so I think it it just needs into the flywheel and gives Amazon,
nice,
starting base for experimentation in in truly how to better serve their customer not just in grocery but in other capabilities also kind of the capabilities of presence of Whole Foods
with an active acquisition like tilt and you can start kind of connecting the dots forward. Underwear Amazon to go but the underlying.

[44:39] Any reader any industry can take from this is,
often times the strategies that have been successful for the past of the strategies that limit us going forward when I was it in fun we were so proud and committed that we were just,
Ecommerce retailer that that was such an inherent and natural Advantage business model we could never SeaWorld,
want physical store presents Amazon was obviously willing even well before the Whole Foods acquisition,
rethinking challenge their own strategy the one of the the ideas in the book is I get 21 which is called Never Say Never,
don’t let past positions create a trapped in the end of the lesson learned that is be very careful
about letting your past strategies especially those that made you successful.

Scot:
[45:32] What do you think of I’ll ask you to pontificate obit either you mentioned pillpack that’s kind of a little little signal that Amazon’s interested in the pharmacy to get their health care partnership.
Honestly kind of poking around travel Services fintech some people even think they’re going to go after the Facebook
crypto kind of things do you do you have a prediction on Castle the next big verticals Amazon speed going to.

John:
[46:01] Will a n i don’t think any of this is going to be a groundbreaking news but I think.
The area of logistics continues to me and will always be a big.
Category of innovation and scale for Amazon it’s a whether it’s back all Logistics last-mile Logistics.
All sorts of different nations in the past month the things I’ve heard that are interesting relative to,
essentially last-mile Logistics capability so I’ve heard a lot about delivery to garage I’ve heard a lot about delivery to trunk,
Kohl’s in Amazon announced a partnership that allow a customer return any Amazon order without packaging to a Kohl’s store to have it returned they continue to do.
My chain and Logistics in those are often times services that other people can leverage I think that would just 6 is going to continue to be at that has been for the past 25 years.
That for Amazon Healthcare is going to be there.

[47:15] Lots of different strategies right come from you know that you talked about the partnership with JP Morgan Chase Berkshire Hathaway it’s called haven.
That’s going to serve that I think it’s about 1.3 million employees at those three companies.
No employer no no patient no doctor is happy with the status quo and I think it really is going to take some external heavyweights like.

[47:44] Chat Tech create examples of how change can happen in Amazon’s going to,
employ their they’re pretty predictable play book of,
free better transparency give customers more Choice make it more real time and and and truly serve the inherent needs of the customer so maybe just a little bit more on preventive,
I’m a Specs than just reactive of.
What a great Playbook to apply in the healthcare so I think that’s going to be a big a big one end and when I’m really interested in and again no big great shock is just internationally how will the Amazon.
Retail visits descale while given all the success that Amazon has had in North America.
Figuring things out on on an international basis and I think that there’s so much more growth
and and healthy competition in all the international markets I think it’s going to be really interesting to see how Amazon creates.
Market specific.
Appropriate you know experiences and businesses that really fit markets in and start to mirror the type of success the Amazon.

[49:08] That doesn’t even touch you know what AWS will do and what the devices businesses will do and what the content businesses will do in call crazy in.

Jason:
[49:24] Yeah I know it’s it’s good it’s going to be super interesting to watch I feel like one of the the challenges they have a new categories is as they get so much bigger.
Like they they really only can make bets that are going to have a meaningful payoff until like in some ways that feels like the biggest constraint on and what vehicles they go after his they’re just they’re just some particles that are just eventually intrinsically.
Too small to be a new bed for Amazon.

John:
[49:50] Yeah I agree with you but I can point out things like you know just was always interested in having the world.
Biggest catalog items whether they were really selling or not so I don’t know if you remember but you know Amazon has this category called small scientific.
And instruments are you at we call this quits when I was at Amazon and it was like about beakers and we’ll scientific tools and and things like that,
like she just always side as a competitive asset remote to have an authoritative catalog on is he could every item in the world and so I don’t think.
I think they they need they need both things that are big and can move.
Place really long really small bats and see how those things are those things materialize overtime.

Jason:
[50:50] Yeah I know know for sure that it is funny I get a little bit of a sense that.
Yeah they’re all these principles in Amazon that are practice all the time but like the one third of wrinkled and some of these principles are like if Jeff has conviction about something.
Like you know he only push it through regardless of the the normal Amazon process is that.

John:
[51:14] Which which is really the prerogative of of management and the types of insights that you wish you saw from Senior Management in other companies which is instead of,
Venus consensus-driven leader and filtering what everybody’s saying like well I guess where we all think this is a good idea so let’s do it,
instead of your own point of view and have an insight about where the market is going where your customers are going and whether anybody agrees with you or not,
going for it and I’ve got to work with with a leaders who have that type of internal conviction in sight and they’re always willing.
To the challenge have encouraged ultimate points of view they don’t want they want to try to avoid confirmation bias.

[52:01] The end of the day when they believe in something they believe in something and and and they are going to commit the organization for doing something about it.
Typically not always typically at Amazon those things tend to be in a fairly bite-size in terms of.
Commitment levels and so they can really allow it to.
Time-in to figure it out like I think the Amazon go store is a good example of that where you know my guess is nobody on the finance team was saying this was a good idea but,
Justin some other leaders probably like you know this is a really interesting customer experience let’s do it and they kept it pretty small sense and they are obviously still figuring some things out about that business but you know they’re going to stick with it you’re not going to see them,
shut that down I don’t think any time quickly you mean.

Jason:
[52:53] That not in fact I think there’s some rumors that we might see a new permeation permutation in the near future.

John:
[52:59] What’s what’s the rumor.

Jason:
[53:01] Well so there’s a wind the go team was first launched they actually took a 10,000 square-foot lease in Seattle in the neighborhood,
and and what we’ve now have heard is that the original go concept was intended to be old grocery store with a butcher.

John:
[53:18] Has been there’s been some reporting that Amazon’s going to watch it a new grocery brand and I and I also believe that.
They’re going to take.
Right aspects of the Amazon go and adopt it overtime into Whole Foods right and so yeah I do think they are going to be experimenting with some different.
Store formats and some different categories in grocery is a really important category for them over over the long. Of time so they are.

Jason:
[53:50] Grocery is one of those ones that that has scale and it has so much wallet share that have your you know you really trying to be customer Centric and you’re not.

John:
[53:59] Amazon gloves everyday transactions right and so they they they they and they are willing,
Lou’s on that type of category business because they understand the customer lifetime value of a customer right and I think that’s
back till like one of the things we can take from the Amazon and it’s really about customer lifetime value versus versus trying to optimize on it on an item or order economics,
Amazon is the most item in order economic aware organization I’ve ever been around but they are clear that they are trying to,
demise for the customer lifetime value in so that lets them invest,
on one item I’m category on one order because they’re trying to win the customer.

Jason:
[54:48] For sure a fun antidote on that that store I guess they took a lease eight years ago when they thought they were going to open a grocery store
and at some point during the go development they pivoted to the convenience store model which are much smaller so that store that that that real estate has sat empty and apparently of the Neighbors in that neighborhood her
I’ve been somewhat peeved because that was,
I’ll be there in a grocery store in Southern and excited that it appears to be an active construction site again and so that you know that’s what everyone’s waiting there,
see them peel the paper off as Windows and see what’s behind that store yeah.
But yeah I do start a video on on some of the other categories longtime westerns the show will know Scott you know has been beating the drum for a long time then,
that would just accept something that Amazon probably product sizes and weaponizes and I would just know in that regard that this week,
or maybe last week FedEx.
In their in their attempt a date they wisted Amazon as a competitor for the first time which is,
and a funny because every every year prior to this day been denying an Amazon compete with them in any way.

John:
[55:58] And I think I think of you the other thing to be you know mine’s love in this isn’t over a short. Of time that I think.
Personalization on-demand manufacturing 3D printing.
All of those capabilities across retail categories is something the Amazons very interested in it so if you read some of their patents you can see some of the the areas of Interest they have in on.

Jason:
[56:26] So that’s a perfect Segway for people that have listened to the whole whole show will get to the the big money question now so,
Amazon issues a press release tomorrow in announces that they’re coming into your space so maybe you are retailer in Australia and you know what Amazon expanded there or maybe maybe your FedEx or maybe you’re a chain of pharmacies or something
like what what is your advice John to someone that let you know it’s suddenly being confronted by the juggernaut.

John:
[56:55] Well if you’re if you’re waiting until that moment then.
You’ve limited your options right and so the best advice is as if right act as if that is actually happened what would you do if Amazon.
I didn’t have that announcement or or the threat came those things before they actually happen to act as if,
you really limited you’ve really limited your options but yes that is the case and you know it.
Like you know double down on who’s your customer.
Obsessing about their experience how to you know Drive Out Cycles on and Brew cost lower quality and then,
how do you serve your password to existing customers in broader and deeper moments right like you know the best the best defense is a good offense he got to go on the offense in this moment.

Scot:
[57:53] Cool one of the attorneys we talked a lot about on the show is the retail contradiction retail is is really struggling brands are going to Rex either either kind of,
larger brands have been around for a while or there’s this new kind of brand that’s being born this the digital native vertical brand
there’s bonobos war of your kind of examples and now I have a slight I show that there’s like eight thousand of these in every category would you think that,
that strategy puts risk to Amazon that you have all these brands are going direct to Consumer the do you need an aggregator like Amazon.

John:
[58:29] I think like most things at it’s it’s some of all of that I think that it’s an opportunity for Amazon because Amazon is the.
Great aggregator of,
customers customer trust not everybody wants everybody wants a hundred Brands but you don’t want your credit card at a hundred different places and everything is I think your presence.
Opportunity for Amazon it also is a beacon for Amazon his you know what sort of new capabilities are customers hungry for it so they can predict that I also think it,
it is you know back to the lake what a great opportunity what a great time this is because you can’t innovate you can
you know do all these things and you can trial and you can scale so much as a cheaper than you used to be able to do and so I think it it you know a traditional retail is struggling,
retail I think is going through an amazing,
I’m first but anytime like young us with destructions about right there’s there’s new winners and there’s no loser and I think that’s definitely what you’re saying.

Scot:
[59:38] Awesome suit final question so obviously I strongly recommend people ever go out and get the book it is also on Audible so if you prefer that you’re obviously listening to this podcast if you prefer to listen to the book it’s on Audible,
did you do the reading or was that a.

John:
[59:54] I read I read the introduction and then actually is somebody who’s who read my other books read the rest of the day.

Scot:
[1:00:00] Yeah I thought this the one time I actually did the Dachshund Rican kind of like to read on Kindle and typed out of a sudden it was
it’s cool to be able to kind of digested more rapidly that way so strongly recommend that but if if folks want to find you online do you are you
regular pontificator on with the tweets are you around lead in what’s the best way.

John:
[1:00:21] Play I am on LinkedIn John Rossman or my my blog my website is Rossman partners.com and I.
I get so many great questions every week whether it’s people at Amazon interviewing Amazon even with Amazon whatever it is and and I love,
I asked you having people ask me like they wouldn’t you mean by this or you don’t give me an example and so there’s always stuff.

Scot:
[1:00:46] Greatly really appreciate you taking time out of your busy schedule to answer our burning questions from the book.

John:
[1:00:52] Well thank you very much for the.

Jason:
[1:00:54] Yeah thanks very much for being on the show John and Provost honors if we didn’t get to a question that was burning in your mind or you have a question
encourage you to continue the dialogue on Twitter or a Facebook page as always if this was the episode that that you know is really going to add value in your day job we’d love it if you jump on iTunes and give us that five star review
we’ve been watching and waiting we see your mass hovering over it and this will give her a time to do it and you know we’ll look forward to reading all those reviews so until next time.
Happy commercing.