Jassy Do It
A look at Amazon's new CEO and the company's hierarchy
Amazon announced last week that Andy Jassy succeeds Jeff Bezos who steps down as the CEO. It’s also official that I suck as puns. I’m just not that punny -- the title was meant to be a spin on “Just Do It!”
Imagine in a day and age when there isn’t much loyalty, to stick around for 24 years and win the most coveted prize - the trust of the Founder/CEO -- and the crown!
When I was in bSchool I read the case study on AWS as well as The Everything Store (which covered AWS) I was mesmerized! Jassy having joined Amazon in 1997 worked on the bookseller business and at the time added CD’s (yeah lol, remember those??) and apparently was Bezos’s “technical assistant”.
Per the Wall Street Journal, he helped to come up with the business model during a 2003 brainstorming session in Bezos’ living room. The idea was to allow other companies to develop code and store data using the data center infrastructure that Amazon had built to run its retail operations. This was not born of “the need to scale during holidays” but more very much in line with Jeff Bezos principle of “fast iteration” and “two pizza teams” which was key to fast iteration internally. This of course is how they became their “own first best customer”
Pizza break time yet? For me a two pizza team means max 2 people cos I don’t share! Butter chicken pizza… Hey, I'm Indian!
Org Structure
In the article The Relentless Jeff Bezos, Ben Thompson outlines the achievements:
What is clear, though, is that any attempt to understand the relentlessness of the company redirects to their founder, Jeff Bezos, who announced plans to step down as CEO after leading the company for twenty-seven years. He is arguably the greatest CEO in tech history, in large part because he created three massive businesses, all of which generate enormous consumer surplus and enjoy impregnable moats: Amazon.com, AWS, and the Amazon platform (this is a grab-all term for the Amazon Marketplace and Fulfillment offerings; it is lumped in with Amazon.com in the company’s reporting). These three businesses are the result of Bezos’ rare combination of strategic thinking, boldness, and drive, and the real world manifestations of Amazon’s three most important tactics: leverage the Internet, win with scale, and being your first best — but not only — customer.
Unquestionably Jeff Bezos deserves a lot of credit. The main reason though is not just his smarts but the incentive structure that he created, and the people that he hired. We’re all familiar with the below and while some if it meant to be humorous Amazon was setup for success right from the start. Consider Google, Facebook, Old MSFT as examples; they are hugely successful companies but almost all of Big Tech has one major revenue/growth driver (lots of investments which will materialize, hopefully) and Amazon has three!
From Up Next How Big Tech Makes Their Billions (Visualcapitalist)
Think a bit about large companies. Politics, games, no backbone. Meetings are used for deception and backbiting. Sorry I am not saying, to be clear, that all companies and all people are that way or Amazon has none of this though I think Amazon’s leadership at every level has a much better BS detector and they don’t stand for it. In larger companies decisions are made by the HIPPO (highest paid person's opinion) so employees have to grandstand or pander. Thats just the way it is. Like it, live with it, or hate it!
Amazon’s organizational structure is hierarchical and has evolved well to meet the needs of the business by moving managers around as general managers though sometimes its not always successful at least right at the start:
Frazzini is an Amazon lifer who came up in the books section of the website, where he endeared himself to Jeff Bezos as a manager there. Conventional wisdom inside the company is that if you can run one business, you can run any other. Amazon’s deep financial resources certainly help. As head of the games division, Frazzini has acquired established development studios and pushed the company to spend nearly $1 billion for the live video streaming website Twitch. Frazzini recruited some of the top names in the video game industry, including creators of the critically acclaimed franchises EverQuest and Portal, as well as executives from Electronic Arts Inc. and other big publishers.
The reason Amazon has so much creativity is probably exactly that. You can move around internally from group to function. As long as you do well! Amazon’s decentralized structure allows them to move fast(er) than other organizations. Amazon remains highly flexible to adapt to frequent changes in the external marketplace. Furthermore because they have extremely stable management all the inside knowledge stays inside (see below). I do think it’s important, that with, so many great people, why Andy Jassy?
From Amazon expands Bezos’ elite ‘S-team,’ adding 6 execs from emerging branches of the company. I added the number of years of service in the below excerpt from CNBC
Here’s the full list of the S-team, per a previous CNBC report, with the new changes we’ve reported above.
Jeff Bezos — CEO of Amazon (27 years)
Andy Jassy — CEO of Amazon Web Services (24 years)
Russ Grandinetti — SVP, International Consumer (24 years)
Charlie Bell — SVP Utility Computing Services (23 years)
Jeff Wilke — CEO of Worldwide Consumer (22 years)
David Zapolsky — SVP & general counsel (22 years)
Dave Clark — SVP, Worldwide Operations (22 years)
Paul Kotas — SVP, Amazon Advertising (22 years)
Amit Agarwal — SVP and country manager, Amazon India (22 years)
Tom Taylor — SVP, Alexa Management (21 years)
Brian Olsavsky — SVP & CFO (19 years)
Peter Krawiec — VP, worldwide corporate development (17 years)
Doug Herrington — SVP, North America Consumer (16 years)
Peter DeSantis — VP of global infrastructure and customer support (16 years)
Colleen Aubrey — VP, Performance Advertising (16 years)
Matt Garman — VP, Amazon Web Services Compute Services (15 years)
Neil Lindsay — VP, Worldwide Prime & Marketing (11 years)
Dave Limp — SVP, Amazon devices, digital management (11 years)
Rohit Prasad — VP & Head Scientist, Alexa (8 years)
Beth Galetti — SVP, Human Resources (6 years)
Jay Carney — SVP, Corporate Affairs (6 years)
Christine Beauchamp — VP, Amazon Fashion (4 years)
That is a super amazing and accomplished list of people. What is interesting to note is that Jassy is the only “CEO” among a bunch of very accomplished VP’s and SVP’s. So why him? Let’s start off with why Bezos might be leaving?
From everything I have read about Bezos, I think he is definitely the most brilliant CEO. Key to his brilliance is hiring the right people. However I think given that Amazon is starting down the path of deeper scrutiny, antitrust, labor relations issues perhaps Bezos just doesn’t want to deal with all that. I mean of course there is probably no other person in the whole wide world that deserves as much to do that. Jeff has in fact as much stated that in his letter. This is essentially what Larry Page and Sergey Brin did as well
From his email to employees, emphasis mine ….
I’m excited to announce that this Q3 I’ll transition to Executive Chair of the Amazon Board and Andy Jassy will become CEO. In the Exec Chair role, I intend to focus my energies and attention on new products and early initiatives. Andy is well known inside the company and has been at Amazon almost as long as I have. He will be an outstanding leader, and he has my full confidence.
Jassy of course is the most tenured exec and AWS is a (profitable) line item which makes him the top choice. In fact I’d wager that this to make his the CEO was taken back in April 2016 when he was promoted from senior vice president to CEO of AWS
In a lot of ways this is probably Amazon’s biggest test of the principle that a General Manager can run any business, Jassy however has his hands full at a time when Antitrust issues, warehouse worker issues, issues with image tech (Rekognition), Ring and privacy loom large. Good luck Andy Jassy!
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Great article Promeet, I got really great insights into the mind of Bezos