Tim Bray renounced his Amazon citizenship on May 1st. The software executive had been a shining light at the company for more than five years â one of only about 20 âdistinguished engineersâ at the $1.2 trillion e-commerce giant.
So his accusation that Amazon had fired warehouse whistleblowers with legitimate safety concerns set off a bomb inside a company that had always put a middle finger up to anyone who questioned it. Executives are told not to discuss problems outside the company and follow the 14 leadership principles laid down by its founder, Jeff Bezos, as if they were talmudic texts (Rule number 1: obsess over customers; Rule 3: prepare to be misunderstood).
Brayâs problem with Amazon wasnât that it had lost focus. By 2023 analysts expect it to worth upwards of $2 trillion. A single division, a profit-generating powerhouse called AWS, is on track to be worth $1 trillion in its own right.
More than 150 million of us now pay Amazon $119 per year to join its Prime Membership programme, which brings faster delivery and a host of other benefits. The average spend of each of those members? $1,400 a year.
But numbers donât quite capture the connection between Amazon and its customers. We have come to rely on â and even love â those brown boxes with the logo resembling a smiley face. To be able to click a button and see almost any product appear on your doorstep within 24 hours feels less like commerce, and more like magic.
Since the pandemic shuttered shops around the world, our dependency has only increased. In the first three months of 2020, Amazon collected $33 million in salesÂ every single hour of the day. Weâre not in a casual relationship with Jeff Bezos anymore. Weâre going steady.
No. Bray hadnât quit in spite of Amazonâs success, but because of it.
âAmazon has been striving monomaniacally for greater efficiency and velocity for what, 25 years?â he tells us, in one of his only interviews since he left. âThey have a huge range of products, good prices and fast delivery. How could anybody be against that?
âThey can only do that by having a disempowered workforce. That kind of goodness is not free. At some point, the cost has to be counted.â
Bray had come to the heart of Amazonâs paradox. Here was a company in middle age that was still behaving like an adolescent. Amazon had retained the culture of start-up despite growing into the worldâs largest online retailer â a phenomenal achievement and the driving force behind its success in so many varied sectors.
But this very relentlessness has become part of its problem. Like a camera narrowly focused on a single point, its field of vision has become blurred. Amazonâs laser-like commitment to customers generates real human costs â for employees, for governments, for the environment. For the most part, its leaders have failed to acknowledge a corporate responsibility to anyone apart from the consumer.
âAmazon has been heard to say âWeâre willing to be misunderstoodâ,â Bray said, quoting the 3rd Amazonian leadership principle. âThatâs such bullshit. It means, âweâre smarter than you. We know what youâre doing. You just donât get itâ.
âWhen you are the largest, most powerful company in the world, itâs not OK to be misunderstood anymore.â
This is the second investigation in ourÂ series called Tech States, examining the worldâs largest technology companies as if they were countries â not corporates. First, we investigated Tim Cookâs Apple. This time, weâre taking a road trip through the vast, interlocking entity that is the United States of Amazon. Here weâll examine Amazonâs people and its culture, and tomorrow weâll investigate its extraordinary economy. Later in the week weâll look specifically at Amazonâs controversial response to Covid-19.
Even by the standards of the other tech giants, Amazon stands apart. Itâs bigger by market capitalisation ($1.2 trillion), by the number of individual customers (at least 300 million), by the number of companies it counts as clients. Its logo has, depending on how you see it, a swoosh or a smile that goes from A to Z. And, increasingly, it does everything. At a time when Americaâs influence is receding in the world, Amazonâs writ runs further and deeper across the planet. The Pax Americana may be waning, but the Amazon Platform reaches further. And like the US in its heyday, Amazon is a commercial empire that has come to do good â and done much more besides.
Weâd like to take you on a journey from Amazonâs Seattle headquarters, where new employees are given access to an Amazon-English dictionary and are inducted into the companyâs culture as readily as if they were joining the Marine Corps, and into its heartlands, where the company runs a succession of huge subdivisions that function like a federated system of individual states, each operating with more autonomy than we had previously realised.
Weâll travel through Amazonâs web services division, an entity so economically powerful that, like California, it could easily break off and function perfectly well on its own. Weâll travel through frontier lands where Amazon employees toil to expand its borders into sectors such as healthcare and surveillance. And weâll visit its most populous state â Amazon Marketplace â home to more than two million small businesses (not all of whom are happy citizens).
But first, back to Tim Bray.
The engineer â who otherwise found working for Amazon âtremendous funâ â had held his nose for years about the tough conditions at its 175 fulfilment centres. At these warehouses, free painkillers are handed out to help with the stress of standing and lifting for 10 hours a day; workers are expected to pack at a rate of up to 700 items per hour, and underperforming employees are written up not by a manager, but by a computer algorithm.
Bray snapped â as he puts it â when Amazon started firing warehouse employees who spoke out about safety during the first weeks of the Covid-19 pandemic in March. Sacking whistleblowers wasnât intrinsic to the function of a free market, he thought, but rather, as he wrote in a scathing note published on his blog, âevidence of a vein of toxicity running through the company cultureâ.
One of those fired workers, Chris Smalls, told us that Amazon had played down the dangers of Covid-19 to warehouse workers in early-to-mid-March. âWe had no PPE, no facial masks, we were not protected at all,â he said. âAmazon doesnât give a damn about people.â (Amazon denies firing Smalls or any other worker for talking publicly about safety. It alleges he and other individuals violated other policies such as breaching social distancing guidelines).
Some would say that the vein of toxicity identified by Bray does not stop with the treatment of workers.
Bezos, who spent $47 million building a mechanical clock designed to run for 10,000 years in the bowels of his West Texas ranch, has given relatively little of his wealth away â at least when compared to other multi-billionaires like Bill Gates. It took 3,500 Amazon employees to sign a letter last April urging their boss to adopt a climate change policy for him to pledge to go carbon neutral by 2040.
Amazon has also been criticised for aggressively minimising tax, paying $162 million to the US government in 2019 after two straight years of handing over precisely $0 (this year Amazon reported $276 million in state tax payments as well as an international tax bill of more than $1.1 billion).
In Seattle, its hometown, Amazon fiercely opposed a 2018 tax hike on large employers that would have raised $48 million a year to combat the cityâs homelessness crisis, which is the third worst in the United States. Instead of paying $13 million a year, Amazon joined other conglomerates to fund a non-profit lobbying group called No Tax on Jobs. After a sustained campaign, the tax was repealed. âThe opposition has unlimited resources,â Lisa Herbold, a council member, noted drily.
âAmazon grew up as an entrepreneurial organisation, and being told they werenât going to succeed, and having to fight for everything, and they still have that underdog mindset,â John Rossman, a former exec â at the company until 2005 â told us. âI think theyâve got to understand their role is completely different. Theyâre great about thinking about the customers, and theyâre amazing thinking about the shareholder, but there is this now third element, whatâs called justâŠ society.â
Culture is an important word at Amazon. From the moment an employee steps through one of its complex of 40 high-rise buildings in Seattle that makes up its headquarters, itâs obvious they could not be working anywhere else.
Thereâs no carpet to soften their shoe fall: too expensive. Unlike Apple, which filled its headquarters with $14,000 Poltrona Frau chairs, Amazon employees work on desks made from reclaimed doors. Business cards are printed in black and white. There is no free food (apart from coffee and bananas).
âEven in these billion dollar high-rises they use graffiti murals that theyâve taken from abandoned houses,â one Amazon executive who left in the last three years told us. âThey believe frugality engenders creativeness.â
Amazonâs 14 leadership principles
According to Jeff Bezos, these âarenât just a pretty inspirational wall hangingâ. These principles are used every day throughout the company â âjust one of the things that makes Amazon peculiar.â
Leaders start with the customer and work backwards. They work vigorously to earn and keep customer trust. Although leaders pay attention to competitors, they obsess over customers.
Leaders are owners. They think long term and donât sacrifice long-term value for short-term results. They act on behalf of the entire company, beyond just their own team. They never say âthatâs not my job.â
Invent and Simplify
Leaders expect and require innovation and invention from their teams and always find ways to simplify. They are externally aware, look for new ideas from everywhere, and are not limited by ânot invented here.â Because we do new things, we accept that we may be misunderstood for long periods of time.
Are Right, A Lot
Leaders are right a lot. They have strong judgement and good instincts.Â They seek diverse perspectives and work to disconfirm their beliefs.
Learn and Be Curious
Leaders are never done learning and always seek to improve themselves. They are curious about new possibilities and act to explore them.
Hire and Develop the Best
Leaders raise the performance bar with every hire and promotion. They recognise people with exceptional talent and willingly move them throughout the organisation. Leaders develop leaders and are serious about their role in coaching others.Â We work on behalf of our people to invent mechanisms for development like Career Choice.
Insist on the Highest Standards
Leaders have relentlessly high standards â many people may think these standards are unreasonably high. Leaders are continually raising the bar and driving their teams to deliver high quality products, services, and processes. Leaders ensure that defects do not get sent down the line and that problems are fixed so they stay fixed.
Thinking small is a self-fulfilling prophecy. Leaders create and communicate a bold direction that inspires results. They think differently and look around corners for ways to serve customers.
Bias for Action
Speed matters in business. Many decisions and actions are reversible and do not need extensive study. We value calculated risk taking.
Accomplish more with less. Constraints breed resourcefulness, self-sufficiency and invention.Â There are no extra points for growing headcount, budget size, or fixed expense.
Leaders listen attentively, speak candidly, and treat others respectfully. They are vocally self-critical, even when doing so is awkward or embarrassing.Â Leaders do not believe their or their teamâs body odour smells of perfume.Â They benchmark themselves and their teams against the best.
Leaders operate at all levels, stay connected to the details, audit frequently, and are sceptical when metrics and anecdote differ. No task is beneath them.
Have Backbone; Disagree and Commit
Leaders are obligated to respectfully challenge decisions when they disagree, even when doing so is uncomfortable or exhausting. Leaders have conviction and are tenacious. They do not compromise for the sake of social cohesion. Once a decision is determined, they commit wholly.
Leaders focus on the key inputs for their business and deliver them with the right quality and in a timely fashion. Despite setbacks, they rise to the occasion and never compromise.
So famous is Amazonâs penny-pinching that it features in a jokey Amazon-English dictionary hosted on the companyâs internal systems. Frupid means âso frugal itâs stupidâ. Other entries include âPromoted to Customerâ (translation: someone got fired) and âBiased for Chaosâ (a negative play on Amazonâs third leadership principle, biased for action).
âThe organisation that Amazon reminds me the most of is the Marines,â the former executive told us. âWhen you look at the Marine Corps, the idea is to keep teams small and fast-moving. They make decisions based on the 80% rule â if thereâs an 80% chance of everybody living â do it.â
Amazon is not a place where being the cleverest gets traction â itâs about results. Executives are encouraged to âdisagree, but commitâ once a decision is made. Arguments should be set out in documents, meetings are for decisions, and managers are encouraged to solve problems themselves rather than pass them up the chain. The environment is austere and analytical; polite but not warm.
Employees even have a nickname for this Amazonian chilliness: âSeattle Freezeâ.
Like the Marine Corps, Amazon is an extremely hierarchical organisation. Everyone is grouped into 12 grades, with an entry level floor-worker being Grade 1 and Bezos being 12.
âTo make things more complicated, thereâs no nine,â Bray explained, speaking via video-link from the porch of his West Coast home. âNobody knows why. Your level matters really a lot. It is a fairly hierarchical company. People want to find out what your level is before they know how seriously to take what you say.â
How seriously should we take Bray, then? âI was a level 10,â he says with a laugh. Things have changed, though: Iâm an unemployed bum now.â
There are 22 people on the levels above Bray who run Amazonâs disparate divisions, and together they make up the âS-Teamâ, which leads the organisation.
Many run empires larger than most FTSE 100 companies. Andy Jassy, the CEO of Amazon Web Services (AWS), runs a $40 billion revenue high-margin company with tens of thousands employees â and has been with Amazon since 1997.
Dave Clark, Senior Vice President of worldwide operations, is in charge of 750,000 or more logistics workers across the planet. Jay Carney, who handles corporate affairs, is best known as President Barack Obamaâs former press secretary.
Others head an ad division which is now the worldâs third-largest (excluding China), AI research through Alexa, the creating of devices such as Kindle, and numerous other businesses.
In the companyâs early days, Bezos introduced a âtwo pizzaâ rule for meetings: any meeting where two pizzas would not be enough to feed the whole group shouldnât take place, he said. Nothing would get decided.
Bezos could, perhaps, just about still feed his top team with two pizzas â provided no-one was very hungry. But former Amazon executives say it would be wrong to think of the company as ruled by meeting and committee.
âThat team of 22, that team is primarily there to think about, whatâs the future? What are the big bets that weâre going to make?â said Rossman, the former executive who has also written the 2019 bookÂ Think Like Amazon: 50 1/2 Ideas to Become a Digital Leader.
The rhythm of the week for leaders at the company, then and now, he says was metrics meetings: whatâs working, what isnât, and whatâs being done about it? These trump all else, he adds, as part of a ârelentlessâ focus on delivering for customers. In fact, Relentless.com was the first domain name Bezos registered when planning his new business. To this day, it still points to amazon.com â a reminder of the ethos that delivery matters.
âI was recently talking to an Amazon product owner, and he was like, âThe things weâre allowed to miss on are like new features or launches. We donât want to, but what we canât miss on is our metricsâ,â says Rossman. âTrying to deliver perfection today is part of that relentless mandate.â
Bezos might not be at his desk quite so often as before â his Blue Origin space operation has consumed more of his time, alongside side projects and investments including the 10,000-year clock and ownership of theÂ Washington PostÂ newspaper â but it doesnât mean no-one is paying attention.
âItâs not just Jeff that can yank the chain of a team or an organisation and get a response,â Rossman says. âEssentially, anybody with a VP title at Amazon carries a big stick.â
Like the former executive, Rossman also compared Amazon to the Marine Corps. âItâs a process of being accepted, but then weeding out, right? Itâs the same thing at Amazon. Itâs demanding. They expect excellence, and they expect excellence in many different facets. Itâs not for everybody.â
Bezos: the man, the meme
Shaved head, sunglasses. A gilet and a skintight black polo. A purposeful strut. It was June 2017, and Jeff Bezos had a new look.
Before he was photographed, newly hench, sauntering into a conference in Sun Valley, Idaho, he was one of the richest men in the world. Afterwards, he was still one the richest men in the world: but he was also an internet culture moment.
The memes flowed freely. He had, as one Twitter user pointed out, somehow joined the ranks of Vin Diesel and The Rock as one of âAmericaâs favorite bald daddiesâ. In the weird world of internet culture, he instantly became a Jason Statham look alike, walking away from an explosion without turning back; or the newest Wrestlemania recruit. The internet ardently embraced Bezosâs full transformation from geeky bookseller to The Terminatorâs younger brother. He was the physical embodiment of the âYou vs the guy she tells you not to worry aboutâ meme â except he was both.
The billionaire tech bro âglow upâ is a fairly well-trodden path (see: Elon Musk) but in Bezosâs case, it became an irresistible metaphor for Amazonâs slow march towards world domination. Or, as someone put it on Twitter: âPretty sure Bezos gets more ripped the richer he gets.â Pictures of him walking a robotic dog â sunglasses on â the following year didnât help. When youâre the worldâs richest man, responsible for huge influence over digital and offline life, the internet takes notice of your every move. Bezos may have increasing power over our everyday lives â but he is not above being meme-ified. Claudia Williams
Given its tough culture, you might expect Amazon to have a high rate of turnover in its leadership as people seek a quieter life. Tech executives, unlike some of the warehouse workers they employ, have no shortage of other well-paid jobs they can pursue â and yet generally they donât.
âThat S-team has been remarkably consistent,â says Mark Mahaney, a Managing Director covering the Internet sector research at RBC Capital Markets. âIâm down in the Bay Area, and itâs rare to see senior management teams stay as consistent as what you have at Amazon.
âJeff Wilke [CEO of global consumer], Andy Jassy have been there for a long time. I know a couple of these people pretty well âŠ They clearly have very good executives who stay together as a team for quite a long period of time.â
The consensus among those who know the team is that their longevity is linked to the extraordinary free rein they are given to run their teams at Amazon. Bezos, they say, isnât like other tech founders, who insist on micromanaging their companies. Bezos has set up a culture and leaves the leaders in his business to the rest.
âYou get a degree of freedom, as a senior person, to get things done that you might not get in a lot of other organisations. Itâs diverse work, and youâre both operating today, but youâre getting to build in the future,â says Rossman.
âThereâs not many places you can go to work where you get the degree of freedom and the vision of keep building, keep expanding, that Jeff and the board at Amazon have created.â
That freedom and that aggression is one thing when youâre the scrappy upstart, celebrating in 1997 that your inventory of books has now hit 200,000 titles. It is something quite different when youâre one of the worldâs biggest companies, responsible directly or indirectly for more than four million jobs, many of them insecure and low-paid.
Insiders report the coronavirus crisis has made Bezos far more hands-on at Amazon again, now that there are new problems for the company to solve, and new situations to adapt to â but one day he will move on. Few who know the company expect that to change how it operates, though. The culture Bezos has built will last, at least for a while.
âThey may lose some steps, but they wonât lose any strides, were Bezos to step down,â says Mahaney. âAmazon has codified all these practices time and time again, is itâs way beyond Jeff Bezos,â Rossman concurs.
âIf Jeff got run over by a bus tomorrow, what is it? Today is Wednesday,â Bray wonders aloud. âIf Jeff got run over by a bus this afternoon, theyâd have a new CEO announced by the end of the day.â
Reporters: Alexi Mostrous and James Ball
Editors: Basia Cummings and James Harding
Graphics and design: Chris Newell
Additional reporting: Imy Harper and Ella Hollowood
Photography: Jon Jones