The Information has an excellent piece by correspondent Jessica E. Lessin about Andy Jassy in which it delves into his management style and priorities. Here are four excerpts that grabbed my attention, and that I think are worth yours:
• “He has flattened the management team and expanded his direct reports. He’s scrapped far-off projects ripped from science fiction, like robot deliveries. He’s changed the way packages are delivered and routed. And he’s taken big bets in streaming media, paying billions for sports rights to boost Amazon Prime’s video service.
“Through it all, he hasn’t shied away from taking his colleagues to the mat. He has overseen two major rounds of layoffs since the end of 2022, cutting 27,000 jobs. And more recently, he implemented an aggressive return to office policy that rankled some of the rank and file.
“He told me he wanted to move beyond changes in work culture brought on by the pandemic, many of which led companies to ‘relax some standards that they may have held dear. You have to get back to those standards because it’s what customers expect and what you should deliver to customers’.”
• “As Jassy sees it, Amazon is focused on three layers of the proverbial AI stack. The first is the models themselves, which costs billions of dollars a year to build from scratch and are getting more expensive. The second is the applications built on top of the models – some of these, like ChatGPT, have gotten the lion’s share of the hype, but Jassy says many more – with different uses – will emerge.
“And then there is the third layer in the stack where Amazon is making a big investment: that’s the chips that will power those ever-more-advanced applications. ‘We think a lot of the future training and inference is gonna be done on our chips,’ he said.
“His wonky description of the ‘three layers of the stack’ isn’t exactly a talking point that screams tech visionary. And you could find a graveyard of companies that, when asked about some new disruptive technology, brushed off the competition by claiming it was ‘early days.’
“But, like many things with Jassy, he presents his views with a logic – and supporting examples from 25 years at Amazon – that make them hard to ignore. And there is an intensity to his delivery that builds confidence – even if you aren’t sure he’s right. I left our lengthy conversations earlier this month more convinced than ever that the AI race has just begun – and that nobody should count Amazon out.”
• “Upon becoming CEO in July 2021 – while Covid was raging – Jassy quickly won over directors, several board members told me. With the company swelling far beyond a million employees, the board, still chaired by Bezos, set out to study corporate cultures that had grown stagnant. Together, they read the book, ‘Lights Out: Pride and Delusion on the Fall of General Electric,’ which told the cautionary tale of an iconic American corporation that had lost its way.
“From his new perch as CEO, Jassy dove first into an area of the company he knew the least: Amazon’s $400 billion-plus retail business. It also happened to be in trouble.
“The division’s red-hot growth as in-person shopping ground to a halt during the pandemic meant that its results had far superseded the company’s forecasts. But it was burning money to keep up. Jassy saw a retail business that needed to be restructured.
“He started to meet more regularly with the head of that business, Dave Clark, whom Bezos had given a long leash. Clark felt Jassy did not afford him the same latitude. Frustrated by what he perceived to be too much interference, Clark decided to leave.
“Jassy tapped Doug Herrington, who had led its AmazonFresh grocery business, to replace him, and together they restructured the business. Rather than trying to deliver all products labeled as ‘Prime’ in two days, they settled on a new strategy: make delivery times even faster for a subset of products, while betting that Prime members wouldn’t mind waiting longer for some items.
“Overall, shipping times got shorter. And Amazon’s North American retail business more than recovered. It swung from a $627 million loss in the second quarter of 2022 to a $3.2 billion profit during the same period this year.”
• “He’s soft-spoken but tough,” one board member tells The Information. “No one should mistake that softness for anything other than he does not care to shout.”
You can read the entire piece here.
KC’s View:
I found this story to be revelatory about someone who, to be honest, I wondered about – would Bezos need to step back in at some point?
The evidence would suggest that this probably won’t be the case – Bezos and Jassy appear to be on the same page. The two of them reading the same book about General Electric’s shrinking trajectory is telling, I think.
I do wonder about the approach to Prime, though. As someone who has been shopping on Amazon since March 16, 1997 (one of my first orders was a book entitled, “Now I Know Why Tigers Eat Their Young/How to Survive Your Teenagers-With Wisdom and a Little Humor,” which tells you a lot about where I was at that moment) and has been a Prime member pretty much from the moment it became available to me, I question whether he really understands the psychology of the program’s membership, or are we just an algorithm to him.
If Prime’s stated value proposition is two-day delivery, for example, it is problematic to change the rules without explaining the change to shoppers.
The piece in The Information raises as many questions as it answers, but it is totally worth checking out.
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