One-way door decisions are difficult to reverse and have long-lasting consequences, requiring careful analysis and deliberation.
Disagree and commit principle is important in decision-making, especially in hierarchical organizational structures.
Common dispute resolution mechanisms like compromise and stubbornness prioritize low energy and assertiveness over seeking the truth.
Efficiently reaching resolution leads to high system velocity and approaching the truth as closely as possible.
Amazon embraces the idea of starting fresh each day and prioritizes renewal and rebirth.
Metrics should be evaluated based on their impact on customer happiness, rather than solely for the sake of having metrics.
Truth telling is essential in high performing organizations, despite the discomfort and energy required.
Balancing data and anecdotes is important in decision-making, with anecdotes usually being right when they disagree with data.
Virtual meetings at Amazon and Blue Origin start with a narratively structured memo followed by a silent reading session to ensure common understanding and elevate discussions. (Time 0:00:00)
Importance of Deliberate Decision-making and Differentiating One-way Door from Two-way Door Decisions
Summary:
Some decisions are one way door decisions, meaning they are very hard to reverse and have long-lasting consequences. Such decisions require careful analysis and deliberation, with consideration for multiple perspectives. It's crucial to differentiate one way door decisions from two way door decisions, and to avoid using a heavyweight decision-making process for every decision, including the lightweight ones.
Transcript:
Speaker 1
It turns out to be the wrong decision. Come back in and pick another door. Some decisions are so consequential and so important and so hard to reverse that they really are one way door decisions. You go in that door, you're not coming back. And those decisions have to be made very deliberately, very carefully. If you can think of yet another way to analyze the decision, you should slow down and do that. So, you know, when I was CEO of Amazon, I often found myself in the position of being the chief slow down officer because somebody would be bringing me a one way door decision. You know, it's okay. I can think of three more ways to analyze that. So let's go do that because we are not going to be able to reverse this one easily. Maybe you can reverse it if it's going to be very costly and very time consuming. We really have to get this one right from the beginning. And what happens unfortunately in companies, what can happen is that you have a one size fits all decision making process where you end up using the heavyweight process. On all decisions. Everything. Yeah. Including the lightweight ones, the two way door decisions. (Time 1:08:45)
Disagree and commit principle in decision-making
Summary:
The 'disagree and commit' principle is a crucial approach in decision-making, applicable in personal life and business endeavors. It involves making a decision even when there's disagreement, especially in hierarchical organizational structures where the senior person ultimately decides. This principle requires expressing one's point of view, then being willing to support and actively work towards the success of the decided course of action, without second-guessing or dissenting.
Transcript:
Speaker 1
You still back them. I'd love for you to explain. Yes. Disagreeing commit is a really important principle that saves a lot of arguing. Yeah. So you know, I want to use that my personal life. I disagree. But commit. It's very common in any endeavor in life, in business, in any, you know, anybody where you have teammates, you have a teammate and the two of you disagree. Yeah. At some point you have to make a decision. And, you know, in companies we tend to organize hierarchically. So there's this, you know, whoever is the more senior person ultimately gets to make the decision. So ultimately the CEO gets to make that decision. And the CEO may not always make the decision that they agree with. So like, you know, I would often, I would be the one who would disagree and commit. Some, one of my direct reports would very much want to do it, do something in a particular way. I would think it was a bad idea. I would explain my point of view. They would say, Jeff, I think you're wrong. And here's why. And we would go back and forth. And I would often say, you know what? I don't think you're right. But I'm going to gamble with you. And you're closer to the ground truth than I am. I had known you for 20 years. You have great judgment. I don't know that I'm right either. Not really, not for sure. All these decisions are complicated. Let's do it your way. But at least then you've made a decision. And I'm agreeing to commit to that decision. So I'm not going to be second guessing it. I'm not going to be sniping at it. I'm not going to be saying, I told you so. I'm going to try actively to help make sure it works. That's a really important teammate behavior. There are so many ways that dispute resolution is a really interesting thing on teams. And there are so many ways. (Time 1:11:58)
Flaws in common dispute resolution mechanisms
Summary:
Common dispute resolution mechanisms like compromise and stubbornness are flawed as they prioritize low energy and assertiveness over seeking the truth. Compromise may be low energy but does not lead to truth, while resolving disputes based on stubbornness is subjective and does not necessarily reflect the truth.
Transcript:
Speaker 1
And we have in our society and inside companies, we have a bunch of mechanisms that we use to resolve these kinds of disputes. A lot of them are, I think, really bad. So an example of a really bad way of coming to agreement is compromise. So compromise, here's we're in a room here and I could say, Lex, how tall do you think this ceiling is? And you'd be like, I don't know, Jeff. Maybe 12 feet tall. And I would say, I think it's 11 feet tall. And then we'd say, you know what? Let's just call it 11 and 1 half feet. That's compromise. Instead of the right thing to do is to get a tape measure or figure out some way of actually measuring. But think getting that tape measure and figure out how to get it to the top of the ceiling and all these things, that requires energy. Compromise the advantage of compromise as a resolution mechanism is that it's low energy. But it doesn't lead to truth. And so in things like the height of the ceiling where truth is a noble thing, you shouldn't allow compromise to be used when you can know the truth. Another really bad resolution mechanism that happens all the time is just who's more stubborn. (Time 1:14:05)
Seeking Resolution and Escalation for Decision Making
Summary:
Efficiently reaching resolution leads to a high system velocity, and the goal is to approach the truth as closely as possible. Exhausting the other person or compromising does not align with truth seeking. In cases of uncertainty, disagreeing and committing can be a suitable approach. Escalating the matter to a higher authority for a decision is preferable to engaging in a prolonged war of attrition.
Transcript:
Speaker 2
Do you want to get to the resolution as quickly as possible? Because that ultimately leads to a high velocity of the system.
Speaker 1
Yes. And you want to try to get as close to truth as possible. So you want like exhausting the other person is not truth seeking. And compromise is not truth seeking. So it doesn't mean, now there are a lot of cases where no one knows the real truth. And that's where disagreeing and commit can come in. But escalation is better than war of attrition. Escalate to your boss and say, hey, we can't agree on this. We like each other. We're respectful of each other. But we strongly disagree with each other. We need you to make a decision here so we can move forward. (Time 1:16:10)
2min Snip
Summary:
Every day is day one at Amazon, where they prioritize renewal and rebirth. They embrace the idea of starting fresh each day, making new decisions about invention, customers, and operations. They have a list of program tenets, but always remain open to finding a better way. Amazon values history but avoids getting trapped by it, embodying the heart of day one thinking.
Transcript:
Speaker 1
It's really a very simple and I think age old idea about renewal and rebirth. And like every day is day one. Every day you're deciding what you're going to do. And you are not trapped by what you were or who you were or you need self consistency. Self consistency even can be a trap. And so day one thinking is kind of we start fresh every day and we get to make new decisions every day about invention, about customers, about how we're going to operate. Even as deeply as what our principles are, we can go back to that. It turns out we don't change those very often but we change them occasionally. And when we work on programs that Amazon, we often make a list of tenants and the tenants are kind of they're not principles. They're a little more tactical than principles but it's kind of the main ideas that we want this program to embody whatever those are. And one of the things that we do is we put these are the tenants for this program and then we in parentheses we always put unless you know a better way. And that idea unless you know a better way is so important because you never want to get trapped by dogma. You never want to get trapped by history. It doesn't mean you discard history or ignore it. There's so much value in what has worked in the past and but you can't be blindly following what you've done. And that's the heart of day one. You're always starting fresh. (Time 1:30:25)
The Importance of Understanding and Evaluating Metrics
Summary:
It is important to constantly evaluate and understand the relevance of metrics, especially in large companies. Metrics should be valued based on their impact on customer happiness, and not just for the sake of having metrics. While metrics are necessary, it is crucial to be on guard against managing the business solely based on metrics that may no longer be relevant or understood.
Transcript:
Speaker 1
And now that proxy isn't as valuable as it used to be or it's missing something and you have to be on alert for that. You have to know, okay, this is, I don't really care about this metric. I care about customer happiness. And this metric is worth putting energy into and following and improving and scrutinizing only in so much as it actually affects customer happiness. And so you got a constantly beyond guard and it's very, very common. This is a nuanced problem. It's very common, especially in large companies, that they are managing to metrics, that they don't really understand. They don't really know why they exist. And the world may have shifted off from under them a little. And the metrics are no longer as relevant as they were when somebody 10 years earlier invented the metric.
Speaker 2
That is a nuanced, but that's a big problem, right? Something so compelling to have a nice metric to try to optimize.
Speaker 1
Yes. And by the way, you do need metrics. You do. You know, you can't ignore them. You want them, but you just have to be constantly on guard. This is, you know, a way to slip into day two thinking would be to manage your business to metrics, that you don't really understand. (Time 1:35:03)
The Importance of Truth Telling in High Performing Organizations
Summary:
Humans are not inherently truth-seeking, but rather social animals who historically prioritized conformity for survival. Important truths can be uncomfortable, awkward, exhausting, impolite, and challenging, making people defensive. However, in any high performing organization, truth telling is essential and requires mechanisms and a supportive culture. It is crucial to acknowledge the discomfort and energy required for truth telling, and to remind people that it goes against human nature.
Transcript:
Speaker 1
This is such you have just asked a million dollar question. So this is this is a what if I generalize what you're asking, you're talking in general about truth telling. And we humans are not really truth seeking animals. We are social animals. Yeah, we are. And, you know, take you back in time 10,000 years and you're in a small village. If you go along to get along, you can survive. You can procreate. If you're the village truth teller, you might get clubbed to death in the middle of the night. Truths are often they don't want to be heard because important truths can be uncomfortable. They can be awkward. They can be exhausting. Impolite. Yes. All that kind of challenging. They can make people defensive even if that's not the intent. But any high performing organization, whether it's a sports team, a business, you know, a political organization, activist group, I don't care what it is, any high performing organization Has to have mechanisms and a culture that supports truth telling. One of the things you have to do is you have to talk about that and you have to talk about the fact that it takes energy to do that. You have to talk to people. You have to remind people it's okay that it's uncomfortable. You have to literally tell people it's not what we're designed to do as humans. (Time 1:36:48)
Balancing Data and Anecdotes in Decision Making
Summary:
The speaker emphasizes the importance of balancing data collection and anecdotes when making decisions. They share a story about a customer service call made in the early history of Amazon, highlighting the significance of anecdotes in demonstrating a point about wait times. The speaker stresses that when data and anecdotes disagree, the anecdotes are usually right, but it's essential to examine the data to understand why. They believe that customer complaints can signify a problem that may not be captured by the data, indicating the need to measure the right things for accurate insights.
Transcript:
Speaker 2
So speaking of happiness bias, data collection and anecdotes, you have to have that for transition. You have to tell me the story of the call you made, the customer service call you made to demonstrate a point about wait times.
Speaker 1
Yeah, this is very early in the history of Amazon. And we were going over a weekly business review and a set of documents. And I have a saying, which is when the data and the anecdotes disagree, the anecdotes are usually right. And it doesn't mean you just slavishly go follow the anecdotes, then it means you go examine the data. Because it's usually not the data is being miscollected. It's usually that you're not measuring the right thing. And so, you know, if you have a bunch of customers complaining about something, and at the same time, (Time 1:42:05)
Effective Communication at Amazon and Blue Origin
Summary:
At Amazon and Blue Origin, the process of virtual meetings involves starting with a six-page narratively structured memo followed by a 30-minute silent reading session before discussions begin. This approach ensures that all participants are on the same page and have a thorough understanding of the memo, leading to elevated and truth-seeking discussions. The use of memos is favored over PowerPoint presentations as the latter is seen as a sales tool designed to persuade, while memos focus on truth-seeking and provide a better experience for the audience despite being challenging for the author to create.
Transcript:
Speaker 2
Maybe first describe the process of a virtual meeting with memos and meetings at Amazon and Blue Origin are unusual when we get new.
Speaker 1
When new people come in like a new executive joins, they're a little taken aback sometimes because the typical meeting will start with the six page narratively structured memo. And we do study hall. For 30 minutes, we sit there silently together in the meeting and read. Notes in the margins. And then we discuss. And the reason, by the way, we do study, you could say, I would like everybody to read these memos in advance. But the problem is people don't have time to do that. And they end up coming to the meeting, having only skipped the memo, or maybe not read it at all. And they're trying to catch up. And they're also bluffing like they were in college, having pretended to do the reading. It's better just to carve out the time for people. So now we've all the same page. We've all read the memo. And now we can have a really elevated discussion. And this is so much better from having a slideshow presentation, a PowerPoint presentation of some kind where that has so many difficulties. But one of the problems is PowerPoint is really designed to persuade. It's kind of a sales tool. And internally, the last thing you want to do is sell. You want to, again, you're truth seeking, you're trying to find truth. And the other problem with PowerPoint is it's easy for the author and hard for the audience. And a memo is the opposite. It's hard to write a six page memo. A good six page memo might take two weeks to write. You have to write it, you have to rewrite it, you have to edit it, you have to talk to people about it. They have to poke holes in it for you. You write it again. It might take two weeks. So the author, it's really a very difficult job. But for the audience, it's much better. So you can read a half hour and, you know, there are little problems with PowerPoint presentations too. (Time 2:09:16)
