Amazon CEO Andy Jassy on Agility, AI Strategy, and the Changing Role of Managers

You've said that you want

Amazon to operate like a startup, like a very large startup.

And a lot of CEOs say that, and I'm interested,

you know, h how do you try to make that happen?

You're you're an enormous company with a lot going on.

How do you how do you try to make that work? Yeah.

Well, we talk about want first of all, thanks for having me on. I appreciate it.

We talk about wanting to operate like the world's largest startup.

And I actually think Amazon

already um based on our DNA and the way that we have become

a company over the last 30 years moves very quickly.

But when you get larger, there are all sorts of ways that you know

natural ways that you can get slowed down.

And so when we talk about operating like the world's largest startup, we think

about a few things.

One is I think in whatever we build, whatever we spend resource on, we

have to make sure we're solving a real customer problem.

And I think a lot of companies, technology

companies in particular, fall in love with the

technology and they are building things that they think are cool because they love

the technology, but they get to the end and they haven't really solved anything remarkable.

And so you have to be startups are missionary

about trying to solve problems for customers.

And that's what we got to make sure we've spent our time on.

And then we need a lot of builders um disproportionately so.

And uh I think of builders as people that like to invent,

people that like to dissect a customer experience

um and figure out what's wrong with it, even if it's pretty good, and

then um rebuild it.

And then, you know, you need owners.

If you're going to be a startup, you need people who think about what

would I do if this were my money?

What would I do if I owned all the resources?

Um hey, I see that

um I own this piece of the problem.

I don't really know if the rest of it solved.

Should I spend my time on it or should I just assume someone's got it?

You need people who really feel accountable and it's part of what our effort

in trying to flatten our organizations

is about is we want the people doing the work

to think like owners.

And then you really need speed.

And I I I think speed

disproportionately matters in every business at every time.

You know, in my old job

when I was managing the AWS

business, I I had the privilege of speaking to a lot of CEOs

of of companies and

enterprises, and they would often say to me

something like, you know, I don't I don't know if you understand like we're

we're big, we have security issues,

we have compliance issues,

we we have lots of organizations that have to be involved.

We we just can't move fast.

And I think honestly

that leadership that speed is a leadership decision.

You can decide you want to move fast,

but you have to kind of figure out what's slowing you down and knock

all those barriers out.

And you got to get the whole organization

aligned that you are going to move really fast even if you make mistakes.

And so I think, you know, part of that too as you're a larger

company, as you have more people, is you need to really try to root out bureaucracy.

you know, well-intended people.

As you get bigger, especially as you have a lot of managers,

they keep layering in processes

and pretty soon you have process upon

process upon process that really slows people down.

So, they can't get the real work done, you know.

And then I would say the two other things you need if you want

to operate with a startup is you got to be scrappy.

You can't think about every new project

taking 50 to 100 people to do.

We started in our cloud computing business,

AWS, our our storage service.

We had um 11 people when we or 13 people when we started

our compute service EC2

we had 11 people.

You can get going with a small number of people and build something that

people actually find resonant and then to keep iterating from there

and then I think you got to nail

um you have to be willing to take risks and I think that as

companies get bigger they often get very riskadverse.

If you hire achievementoriented

type A people, which a lot of companies, including ourselves,

have, they're not used to failing.

And so, a lot of times when

they want to pursue something very different, they worry that they're going to be

ostracized if they get it wrong.

And so, they'll play not to lose.

And the only way to build something unique and different is to do something

different from what people have done.

And you have to be willing to take risk and be willing to fail sometimes.

So, there's a lot to unpack there.

Um, you know, when you talk about

really being customer focused or focusing on,

you know, an outcome that your customers have,

that sounds like it might not necessarily be consistent with taking risks.

The taking ris, you know, if you knew exactly what your customers want, you

would deliver that and that's not risky.

You know, you're you're you're

probably trying to skate ahead and and figure out what are demands that customers

don't even know they have yet.

That that's part of the risk taking.

So, how do you how do you square those two things?

I think they're actually pretty consistent, though.

I mean there's there's listening to customers.

Customer actually if you find the right feedback loops

customers will tell you what's wrong with your product

or what's wrong with their experience and they want to change.

So you you there's listening to customers

and often times customers can tell you

the top 10 things in their mind they wish they were different.

But a but if you ask the right

why questions and what you're trying to solve.

A lot of times customers will tell you what really is bothering them, what's really constraining them.

and they can't sometimes

tell you exactly how you should fix it.

But if you're listening to them and you understand the need,

then you can invent on their behalf, which is a lot of what we do.

A lot of the invention we do is listening to something customers are really

struggling with and they won't tell you how to do it.

But we start asking ourselves

why do those constraints

have to happen and start to invent on their behalf.

So you seem to be in the middle of

what is either rethink in terms of management or maybe culture.

So, you know, I mean, some of the the the the

things I'm aware of, you're you're rethinking the role of middle management.

You've adjusted uh expectations

for how teams are meant to work together.

You've got people back in the office, I think all of them, five days a week.

Now, what what animates,

you know, what what's behind all of these steps?

Well, I think the first thing I would say is if you most companies

that have been successful for any period of time have a culture that's been

a key part of their success and that is for sure true with Amazon

and I think we have a really strong culture but it is not our

birthright to keep having a strong culture.

You have to, you know, things change, the size of companies change, the

scope of businesses you're going after change, the geographic

distribution of your people change,

and you have to keep working on strengthening the parts of your culture that

you see being stretched if you want to keep being successful culturally.

And for us, it comes back to this notion of

wanting to operate like the world's largest startup.

Amazon has hired really smart,

really ambitious, really motivated

people who we have given a lot of responsibility

to as owners and then we let them make the lion share of the two-way door decisions.

A two-way door decision is one where if you walk through it and you're

wrong, you can walk back through it and no harm.

A one-way door decision is when you walk through that door and you're wrong,

it's really hard to walk it back.

But the two-way door decisions, which is the overwhelming

majority of the decisions we all make,

we want to be handled by the people doing the work and those owners.

But as you get larger, as we have, as we've grown so much the

last 10 years, you end up

logically with a lot of managers and a lot of layers of managers.

It's the way you organize yourself.

And so then you find that you end up with things like

there's a premeating for the premeating

for the premeating for the decision meeting

or you find that

um owners don't feel like they they own the decision can make the recommendation

anyway because anymore because that decision is going to be made three levels up.

And so that's what we like to try and um limit.

We really want our owners doing the real work

to own the two-way door decisions and to be able to move quickly and autonomously.

And that's part of this effort we've taken which is to

increase the ratio of individual

contributors to managers by at least 15%

across the company which we'll beat um by uh we have beaten already by

the end of the first quarter

but we want to flatten our organizations

to move faster and to drive more ownership.

The other thing we noticed was that

when we brought like like most companies,

people were largely working remote.

And when we brought people back to the office three days a week in

May 23, we noticed that

a lot of things about how we were inventing and how we were collaborating got better.

And if you do a lot of inventing

like we do, and our style of invention is often very collaborative.

We we're in meetings together.

we're iterating with one another

that when you're together,

the that invention is stronger.

What you find is people riff

on top of each other's ideas better if they're together.

Turns out sometimes it's actually useful to interrupt each other

because you you get to a faster spot more quickly.

You feel that energy.

A lot of our best

inventions have been after really messy wandering

meetings when we've been trying to invent something where we haven't quite gotten there

and we've resolved oursel to go

um have another meeting in in a few days to figure it out and

then three people stay behind on a whiteboard

and actually map out what it was they couldn't figure out or on the

way back to their office they figure it out or

later in the day they walk by each other's offices.

when you're remote, it just like the meeting ends and you're on to the

next jingle and the next meeting and you you just don't find that that

type of invention together.

I also think if if you want to teach the

culture, it's much harder to see it when you're remote.

You have a lot of people who are

lurking off camera or if they're on camera,

they they look like they're looking at the camera, but they're also working on a spreadsheet.

And when you're in a when you're in a meeting together

and you're watching the body language and you're watching people's

expressions, you internalize the culture much better.

I think also the teaching and the apprenticeship

is much better if you can walk over to somebody or after a meeting.

Sometimes there's a hard meeting and I may say Audi

like don't be surprised that there was a hard meeting.

This is a really difficult topic

and um next time when you come back you know think about these three things.

You just don't end up doing those as much when you're remote.

And so we realized

that we were much better for customers

and for the business if we were together.

A lot of the data has shown that

actually flexibility working from home can increase productivity.

Uh you know that it it it

you know the workforce quote unquote wants it.

Do you think that data is wrong or are you saying

this is a little bit more intangible

but you feel that this is this is beneficial

for as you say for innovation

for I would say that

um I think it's very hard to measure

truthfully we've done a lot of measurement oursel

um our data doesn't suggest what you said

but I also when I look at that data

it's just very hard to measure I mean how do you measure how well

you're inventing you don't actually know how well you're inventing

for probably a few years

because it takes a while to get through the invention

process and you have to hire a team.

Then you got to go build the product.

Then you got to get the product in the market and then you got

to see if people respond to it.

Often times it takes several iterations.

So it's it's quite difficult to measure but I will say I spend a

good amount of my own time

in product and invention meetings

and there is no comparison

to being in person and remote. Yeah. Interesting.

So the couple of the topics that you've hit on, you know, one, how

to be perpetually uh innovative

and how to, you know, I think I think a lot of people who

are listening to this would think, yeah,

this problem, I can't get anything done because it's just complex.

You know, there's layers of of of reporting and management.

I I'm sure that resonates with a lot of people and you've talked about

what you're trying to do, but if you had to boil down, you know,

sort of advice for a company, maybe a larger company that has these layers,

this matrix layer of complexity

and wants to get out of it and and to have that sense of urgency.

What what would be some steps?

Well, uh, you know,

at first I would say that I don't believe that we have it nailed or perfect yet.

I think you have to keep iterating at it, but I think the first

step is to want to address it.

And it's actually not simple to address

because you get used to operating a certain way

and then it seems impossible

like how how can you change the organizational

structure to lose a lot of that bureaucracy and later.

So I think the very first thing is the leadership

team deciding they want to actually change it and resolving

themselves to take action.

And then of course it matters

organization by organization but

you know in our case we really felt like we wanted to have more

ownership with our individual contributors

uh and the people doing the actual work.

So that's why we've taken this action of trying to flatten and have fewer managers.

Um I think some of it is actually getting

visibility into what's actually happening.

So when we announced that we were going to take this goal to flatten

and to increase the ratio of individual

contributors to managers, uh we started this no bureaucracy

email alias where we encouraged anybody in the company that thought they were experiencing

bureaucracy to email me at this um alias and we tried to explain

there is a difference between process and bureaucracy.

Sometimes people just not like a process and they'll say it's bureaucracy

and most companies of any scale need process to scale the right way.

But there is really a difference and

the difference is often

processes that have been layered in that don't really add any real creative value

and I you know I've gotten over a thousand emails at this point

and not all of them are true bureaucracy

and sometimes it's people saying they don't like this manager like this.

So, it's not a thousand pure

bureaucratic examples, but there are plenty

and I've read every single one and and so have the relevant leaders in my organ.

We have changed already

375 processes because of these these emails

and and it's really hard to see some of the red tape

deep in your organizations

if you have large organizations

like a lot of enterprises do.

But getting that visibility

starts to you can knock down a bunch of things if you see them

uh and you've resolved to to to change it.

And it also starts to motivate

you to just look for opportunities

when you're in meetings to reinforce

with teams that you're not going to tolerate bureaucracy.

And so I think it starts with a resolve.

Then you got to figure out where you think the biggest problems are initially.

Then you have to have good feedback loops to see where all the issues are.

And then you got to keep working on it.

Uh so I want to talk about AI.

Um, I know there were some analysts who thought Amazon was relatively slow to

sort of, you know, get into AI in a big way.

So, I guess the first question, are you happy where you are right now?

I think AI is probably,

it's for sure the biggest

technology transformation since the cloud.

It's probably the biggest technology

transformation since the internet.

Um, and so I think it's going to change

every experience that we know.

Um I would you know we have a very substantial

investment in the AI space right now.

Uh and I think that

you know I think in the early days

of people getting excited about generative

AI people forgot that

if you really want to

pursue AI in earnest there are three macro

layers of that AI stack.

All of which are gigantic.

Um all of which we're investing in.

Um, but we invested in a bunch of areas that didn't get as much attention early on.

But it, you know, really at that bottom

layer of the AI

stack is um, for model builders

and what they care about is two things.

They care about the compute

to do the training and the inference

um, which is really the chip

and they care about services that make it easier to build models.

And uh we you know we've built a a chip there

um our own custom AI called trrenium

um uh that's going to help people save a lot of money relative to

what the cost has been to date

and we've built a service called Sage Maker

uh which is the really kind of become the standard way for people building

their own models to get the data in

to build a model

to experiment and to deploy into production and so for model builders

I I think we've had services there like some of which which have been

around for a while on Sage Maker

that maybe aren't as public but but

have a huge amount of traction

and then chips that I think people are excited about.

At that middle layer

is for people that

um don't want to have to build their own models.

They want to leverage an existing frontier model.

They want to customize it with their own data

and then they actually want lots of features to make it easier to build

a high quality generative AI application.

These are things like

guard rails so the model doesn't say things you don't want it to say

or rags so that you have up-to-date

information or agentic capabilities

so you can take a bunch of automated actions in succession

and um we've built this service called bedrock

which has the largest selection of those leading thirdparty

frontier models including our own

as but it also has the best collection of features to help you build

a high quality generative AI app

and bedrock is another one of those services that

has substantial traction like really significant

traction if you talk to enterprises

or or smaller companies

that also hasn't gotten as much public limelight

but these are services that are part of why we have

a multi-billion dollar annual revenue run rate in in the AI space

and then the top layer are really for applications

we're building some applications we have something called Q that's the um best AI

powered um coding assistant but the overwhelming

majority Majority of applications are going to be built by companies.

You know, we have over a thousand generative AI applications

across Amazon that we've built or are building,

but most of them will be built by other companies hopefully on those first

two layers of the stack that I was mentioning.

So, while there was a lot of attention early on on,

you know, chat GPT,

which was kind of the only really

large scale generative AI application,

I think people have slept a little bit on the other layers of the

stack where we have big investments and are doing really nicely.

And do you see that maybe as your next big line of business?

You know, whereas, you know, the cloud allowed people to do things with data,

this will allow, you know, millions potentially of users

to, you know, develop

AI solutions through Amazon.

I mean, is that sort of the bet?

This is your I think that

uh if you believe

like we do that every customer experience is going to be reinvented by generative

AI by AI more

broadly then um it means that

there's a lot that's going to be built.

I mean I I think

in my opinion every SAS application

is going to be rebuilt with AI.

Um you know if I think about our even our retail business

uh if I look at

all the core pieces of it

um we've built something called Rufus

which is a generative AI

um powered shopping assistant

which you know really

I think if you know what you want

there isn't an easier way to get it than on Amazon.

But if you don't know what you want well you can easily find it on Amazon.

Um people have been doing it for a while.

It's still the place where physical

stores are interesting to people because you can say to a salesperson

uh you know I'm a golfer and they can say well what's your handicap

and you can say I'm a 15 handicap and they can say do you

have a fast swing or a slow swing

you know they can kind of narrow

um the scope of what you're looking for and then say I think you

should look at these three things and then you can say

well um what's the benefit of this graphite

shaft versus this steel shaft and

you know that's The one thing that you can't do as easily right now online.

And that's what Rufus aims to do is it aims to be

that personal shopping assistant where

it can make recommendations.

It can ask questions to narrow what you want.

It can compare products.

You can ask any question of any detail and it can answer that.

And you know the sales assistant is not going to move on to another career.

They're going to be with you and get more personalized over time.

We're running our inventory management that way, you know, on generative AI applications to

get the right amount of inventory in the right spot.

Um, you know, if you think about buying

uh apparel, uh, one of the things you don't know is does this brand

run large or run small?

And we've built a foundation model to compare all the brands and which ones

run comparably small or large to recommend the right size for you.

Every part of our retail

customer experience will be reinvented with Generative AI.

And that's true across all our businesses.

And so we if you want to be

helping other companies build the best possible

customer experiences, which we do, and which is what AWS

does, you have to give them the right building blocks

in generative AI, which is what we're doing with things like chips and things

like Sage Maker and Bedrock and some of the applications we're providing. Yeah.

Well, you sound like you're optimistic about all this.

I mean, is there a part of you that thinks,

uh-oh, you know, if we're not careful,

there may be unintended

consequences that we should try to prepare for?

You know, I I think there are always possible unintended consequences.

I mean, I'm an optimist by nature, and I'm an optimist about this technology.

And I also think that you can't

um you can't stop the progress of technology.

You just have to figure out how to use it productively

for people, for great customer experiences, and societal good.

But I do think that the

you know one of the

one of the things we all have to watch is that

the pace of this transition

may be quick and may be quicker than other technology

transitions in the past.

We have to work hard.

I think one of the biggest problems in my opinion

for sure in the US it's probably true in other countries too

is that we the quality of education

in the country has really suffered

over the last 20 to 30 years.

I mean we if you look at the data

we are 30 out of 35

developed countries now in

um uh efficacy of education.

I think the number of people are going to be able to to be

software developers is going to go up

um you know uh exponentially

because you're going to have these

coding apps that allow you to use natural language to describe what you want to go build.

And it's going to be very empowering.

But we got to make sure that our education keeps up

so that people are successful in this new economy.

So I want to talk a little bit about

sort of leadership at a at a higher level.

Um you know you talked about the

how AI is reshaping

everything and I think I think every CEO is feeling that it's an opportunity it's a risk.

It could be disruptive.

It could be a lot of things

and then you have kind of political and geopolitical

uncertainty that is you know probably

more than than most of us have lived through before.

How do you how do you manage through that level of uncertainty

or what's your advice to people who are wrestling with how in the world

do you manage through all this?

Well, again, I I don't pretend to have the perfect answer, but

I think the first thing is

um really trying to

you know, there's there is a

there are a lot of things happening in the world right now, across the

world, in our country,

and they can be dizzying.

And I think just acknowledging

that there's a lot going on,

but you can't control everything.

you can only control the things that you can control.

And then remembering what matters most

and and I you know the thing that we keep telling

ourselves inside the company

as we look at at you know the different things happening

is that at the end of the day

we're here to make customers

lives easier and better every day.

And you can get distracted

by you know are there going to be tariffs?

How high are the tariffs?

Are there not going to be tariffs?

what do other countries

relationships look like with these country?

You you can kind of but at the end of the day we have

a job to do which is to figure out what customers

want and then to go deliver it for them.

And so in every one of our

businesses there are so many

areas where we can be even better for customers

and that's what we try to spend our time on.

I think it's not easy because

um uh well-intended, passionate,

people read or hear about things and wonder how it's going to affect them.

And sometimes when it does, you have to figure out

how you're going to operate.

But I think by and large, if you stay focused on the issues you

know customers care about, you will do right by your customers.

and you just will start at a much higher starting spot rather than having

to do all the

every little bit of of early stage work yourself. Yeah.

I mean there was a period and and

HBR was absolutely part of it.

You know a couple years ago where where

you know at places like Davos

and and and you know again in our pages

you know good leadership was defined as thinking broadly about about stakeholders

thinking about things like sustainability

and you know diversity

and long-term thinking and all these things. Has that changed?

I mean, you know, the the the

conversation seems to or the noise seems to have changed around it, but

you know, do do you think

is the definition of successful 21st century leadership

sort of evolving at this moment or

you know, what is the role of a 21st century? I don't know.

I mean at the end of the

day I think I mean to be a in my opinion

to be a great leader of a significant

company um there is

there is no one definition

and there are different things happening at each time that that matter

but at the end of the day you you I think you have to

deliver great customer experiences

for whoever you're trying to serve

with successful financial results

and uh you know I think there have been times over the last few

years where maybe one issue or a different issue gets disproportionate attention.

And I think the reason that that those issues

get disproportionate attention is that there's work to be done.

Like I we're not in the right spot in my opinion.

Um we're still not in the right spot in terms of,

you know, where we need the environment to be.

I still think we want more diverse teams.

Like none of that has changed.

There are certain times where that takes up more of the conversation

than at other times,

but it is true in my opinion at the end of the day as

a as a leader,

you have to you have to have

the right customer experience with the right results to match it.

And um and then all the other pieces are parts of it.

So last question, as you said, you've been at Amazon for 28 years.

You've been in the CEO role for four.

What's you know, what's your best bit of career advice for for the HBR audience?

First, I would pick

something that you're either really passionate

about or that you think you're going to be good at

um and you're convicted you could be good at to work on because we

all spend so many of our waking hours working

that you want to work on something you like and that makes you feel good about yourself.

Pick things that you're

really passionate about and that you believe you're going to be good at and want

to come to work every day doing.

you just can't be

terrified of failure, you know, and I I think and by the way, I

made mistakes uh in this area many times.

Uh you know, I I felt like

almost every stage of my career

as I got to new audiences

who I felt didn't know me

or know me well that every time I got in front of them was

like a past fail referendum on my conf competence.

And it's just it's just not a it's not helpful

and b it's not how most people think of you who are working with you.

And I would say that almost every

most important lesson I learned in my career

was from failure or things that didn't go right.

And if if you are self-reflective

and learn from them, it catapults you.

And then I I think the last thing would be

uh I think an embarrassing

amount of how successful you are is attitude.

And I I always tell my kids this.

I don't think they really believe me,

but it is absolutely

true in my opinion.

I think simple things, things you can control.

Um, do you work hard? Are you reliable?

Do you get done what you said you would get done?

Do you tell people if there's going to be an issue?

Um, do you want to be part of a team?

Are you a a cand do person versus a a naysayer all the time?

All those things change how people receive you and how much they want to

advocate for you and how much they want to work with you.

And I I think another piece of that is

how good a learner you are.

What I notic is that at a certain point of people's careers,

for a lot of people,

they just seem threatened by having to learn again.

I don't know if it's because

it's a lot of work to feel like you have to keep learning

or if it feel you get to a certain point of seniority where you

think I shouldn't have to learn or

um or a sign of weakness that you don't know everything.

But if you work in a dynamic environment, which hopefully most people

do, you the second you're you're you're

the second you stop learning

really is the second you're starting to unwind.

I I think back every six months

and there's so much that I've learned

and it you know that is really what changes

your capacity and what people are going to let you do

and I think your own enjoyment.

All right Andy this is amazing.

Thank you very much for your time for your ideas.

This is great conversation.

Thanks for having me Audia. Appreciate it.