Good to Great
Carr: Jeff and the leadership team were reading Good to Great. If you ask me, this was the single most influential and effective management book for our company. If you don't know what it is, go read it — in my opinion it's the most important management book you'll ever read.
What it did was help us codify our growth flywheel. What are the inputs that, if we improve them, drive everything? Broad selection. Great customer experience. Low prices. Fast delivery. Lots of merchants. Driving out cost.
Good to Great was the single most influential management book for Amazon. It helped us codify our flywheel.
Focus on Inputs, Not Outputs
Carr: This identification was a critical moment for the company. We realized — what we need to do is spend our time focusing on how to measure each of those things and improve them. It shifted our focus away from short-term thinking of pushing the revenue number up to this longer-term thinking.
There's no day 10, 20, 30 years from now when people will say — I'd rather shop at a store with fewer items, or higher prices, or slower delivery. If we just improve these inputs, the outputs will take care of themselves.
It shifted us from pushing revenue up to improving inputs. If we improve inputs, outputs take care of themselves.
500 Goals, Only 10 Financial
Carr: Jeff and the S-team had a tool called S-team goals — about 500 items long. They counted it up and of that list, only 10 actually had a financial metric in it, like revenue or free cash flow. The rest were all inputs — low prices, selection, speed of customer experience.
We took it as an article of faith that if we can just improve these inputs, the outputs — revenue, customer activity, free cash flow — will take care of themselves. That was one of Amazon's great strengths.
500 company goals. Only 10 had financial metrics. The rest were all inputs.