I know I already pointed to Greg Linden’s Early Amazon series, but I wanted to call out one of the stories from that series. I think this story encapsulates both everything I think businesses in general completely suck at, and everything I think is important about making decisions in businesses. Take it, Greg:
I have talked about a couple fun projects I did at Amazon even though I was supposed to be working on other things. This story is more extreme, a project I was explicitly forbidden to do and did anyway.
I loved the idea of making recommendations based on the items in your Amazon shopping cart. Add a couple things, see what pops up. Add a couple more, see what changes.
I hacked up a prototype. On a test site, I modified the Amazon.com shopping cart page to recommend other items you might enjoy adding to your cart. Looked pretty good to me. I started showing it around.
While the reaction was positive, there was some concern. In particular, a marketing senior vice-president was dead set against it. His main objection was that it might distract people away from checking out — it is true that it is much easier and more common to see customers abandon their cart at the register in online retail — and he rallied others to his cause.
At this point, I was told I was forbidden to work on this any further. I was told Amazon was not ready to launch this feature. It should have stopped there.
Instead, I prepared the feature for an online test. I believed in shopping cart recommendations. I wanted to measure the sales impact.
I heard the SVP was angry when he discovered I was pushing out a test. But, even for top executives, it was hard to block a test. Measurement is good. The only good argument against testing would be that the negative impact might be so severe that Amazon couldn’t afford it, a difficult claim to make. The test rolled out.
The results were clear. Not only did it win, but the feature won by such a wide margin that not having it live was costing Amazon a noticeable chunk of change. With new urgency, shopping cart recommendations launched.
In my experience, innovation can only come from the bottom. Those closest to the problem are in the best position to solve it. I believe any organization that depends on innovation must embrace chaos. Loyalty and obedience are not your tools; you must use measurement and objective debate to separate the good from the bad.
At the time, Amazon was certainly chaotic, but I suspect I was taking a risk by ignoring commands from above. As good as Amazon was, it did not yet have a culture that fully embraced measurement and debate.
I think building this culture is the key to innovation. Creativity must flow from everywhere. Whether you are a summer intern or the CTO, any good idea must be able to seek an objective test, preferably a test that exposes the idea to real customers.
I love this. It is so difficult for people who have made their way to the top of an organization to have the confidence this style of management requires. But, in my opinion, it is the only choice available to you if you want your organization to thrive. (Before you say this could never work outside of a software company, go read the 1999 Fast Company article Engines of Democracy — then we can talk.)
Unfortunately, this style of leadership is damn near impossible to retrofit. You start this way or, as far as I’ve seen, you’re stuck. Anyone have a great counterexample? I’d love to hear it.
I’ll back Greg’s story up by digging a little further into tech history to another, similar story:
Earlier I mentioned that sometimes management’s turndown of a new idea doesn’t effectively kill it. Some years ago, at an HP laboratory in Colorado Springs devoted to oscilloscope technology, one of our bright, energetic engineers, Chuck House, was advised to abandon a display monitor he was developing. Instead he embarked on a vacation to California — stopping along the way to show potential customers a prototype of the monitor. He wanted to find out what they thought, specifically what they wanted the product to do and what its limitations were. Their positive reaction spurred him to continue with the project, even though on his return to Colorado, he found that I, among others, had requested it be discontinued. He persuaded his R&D manager to rush the monitor into production, and as it turned out, HP sold more than 17,000 display monitors representing sales revenue of $35 million for the company.
Some years later, at a gathering of HP engineers, I presented Chuck with a medal for “extraordinary contempt and definace beyond the normal call of engineering duty.”
–David Packard: The HP Way: How Bill Hewlett and I Built Our Company