The Amazon Management System by Ram Charan and Julia Yang

THE AMAZON MANAGEMENT SYSTEM

        
Ram Charan and Julia Yang

  Ram Charan, Amazon

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A system of simple yet effective forcing, managing and executing mechanisms

1. Unlike most business which is obsessed about competition, amazon is extremely obsessed with customers. Data is crucial and is the real equity for amazon. Data of customers is critical to identify customer needs, offer better service and value to them, which increases revenue output that further lowers cost and maximizes returns.

 

2. Raising the standards of talent is of utmost necessity. Leaders take ownership and never jeopardise the long-term mission for short-term results. Top management focus on:

  • Hiring the best
  • Practising frugality
  • Delivering results

-The most successful are those who resilient to pressure, handle failure well and can carry on without being disrupted by such obstacles.

 

3. Focus on a powerful metric system

-All insights need to be backed by data and metrics.

-Tracking inputs is essential to ensure good outputs.

-Leaders function at every level, focusing on the details, regularly inspecting and reviewing metrics. A thorough system of metrics and data reduces the need for physical supervision and assistance.

 

4. Focus on inventions

-Organizations that innovate within their current capacity are destined to fail. You can't achieve large-scale success unless you are ready to face the possibility of large-scale failure.

-The project team is accountable throughout the whole development. They have to take ownership right from concept to post-launch operation and everything in between.

 

5. System for high-quality decision making

The nature of decisions is ranked based on their level of impact they have in the organisation.

Type 1 decisions are consequential and irreversible.

Type 2 decisions refer to those that are alterable, reversible. 

-Decisions should be made with around 70% of the information you wish you had. Waiting for more will slow down the process of decision-making.

-Amazon emphasizes fighting conformity, challenging group thinking.

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