My experience with one of the world’s most prolific technology trailblazers changed me forever.
When I worked at Amazon, CEO Jeff Bezos himself tasked me with digging into Amazon’s data to unearth new ways to grow the business.
My team responded with three new data-driven systems that delivered a nice portfolio of patents and drove Amazon’s annual profit by over $50 million.
I have since gone on to found my current firm, RichRelevance, in 2006 – and more than I could ever anticipate, the lessons I learned at Amazon have shaped me as a technology leader.
While conventional wisdom has held that customer service is Amazon’s secret sauce, Bezos’s core innovation was to place data and information at the centre of his IT strategy and corporate culture.
Despite big data’s hype, Bezos is unique in his data focus. The rest of us are using buzzwords to try to keep up.
Here’s what it takes to do information right, according to the Amazon boss:
1. Top-down approach to information
A data-driven culture is meaningless without the support of the CEO and executive team – and IT departments are certainly familiar with this struggle to get support from leadership teams.
A brilliant technology boss – and in fact, any business leader – should be able to set opinions aside in favour of data. Bezos had this rare ability.
One of my proposals while at Amazon was to sell advertising on the homepage, and Bezos’s initial response was: “This is one of the stupidest ideas I’ve ever heard.”
Nonetheless, when I showed data to prove the opportunity, I had approval. Bezos told me to run a live test, and from that simple decision, Amazon Advertising now accounts for about $1 billion annually. It is one of Amazon’s most profitable services and a battlefield on which they’re rumoured to be taking on Google.
In today’s information-driven economy, any executive team not listening to data is bound to miss out on vital opportunities.
2. Metrics define your corporate IT strategy
More than anyone I’ve ever met, Bezos knew that things don’t improve unless they’re measured.
At Amazon, everything that can be measured is. Every piece of data is tested and analysed – not just web design or product features, but finance, HR and operations processes.
So for example, when my team proved (65 pages of proof, in fact) the impact of website load times on sales, and identified the metrics that mattered, without hesitation, Bezos reorganised Amazon around a new, even more aggressive method of measuring website performance, changing hundreds of jobs to obsess about these very metrics.
Metrics need to be at the heart of an IT strategy, which in turn will define a company’s corporate culture.
3. Democratise data
If you wonder how tech giants like Amazon, Google and Facebook manage to innovate so quickly, the answer is what I call ‘hill climbing’. It is an approach to business that institutionalises the finding, questioning and testing of data.
Hill climbing requires that everyone, regardless of seniority, have access to data and tools to test their ideas and intuitions.
With the established primacy of data, and broad empowerment to test early and often (especially in IT), rapid innovation and huge gains become possible at scale. Rising stars do just that – without the cumbersome overlay of bureaucracy and politics.
At RichRelevance, for example, everyone optimises. In a typical engineering interview, we often ask candidates to write code to solve a problem. But the focus is on how the engineer knows it is right. How do they test and verify their answers? Our goal is to analyse how they choose data points, validate their own ideas and ultimately measure success.
A data-driven IT strategy is just that simple. Metrics, leadership and democracy are the information principles that will drive a business forward.
As I lead RichRelevance through its rapid growth, I strive every day to follow these very principles I learned from Bezos.
It is through these basic rules that a business can ensure rising stars do rise and great ideas become reality.