In January 2002, Amazon hit profitability for the first time. It had emerged from the dot com bubble intact — though barely, limping along after months of being battered in the press. It posted a net income of $5 million, which was a symbolic penny per share. This was a big milestone. In The Everything Store, journalist Brad Stone argues that Amazon did this mostly to prove that it wasn’t just another dot-com failure. It could make money … if it wanted to.
The company was also growing ever more complicated. At the end of 1998, it stood at 2,100 employees. By the end of 2004, it had around 9,000. In 2002, Amazon was still in the middle of that growth path. It was expanding into other countries (Japan, China), and it constantly opened new categories (sporting goods, and apparel).
Putting the structural problems to one side, the cultural problems, too, were becoming harder to tackle. Stone writes: “Amazon once tried to conquer chaos by synchronising its employees’ efforts with broad unifying themes like Get Big Fast [Baby] and Get Our House in Order. That had gotten everyone paddling in the same direction, but now the company had become too big for that kind of transparent sloganeering.”
Years later, early Amazonian Eugene Wei would write:
I could continue on through the years, but what stands out is that I can recite these from memory even now, over a decade later, and so could probably everyone who worked at Amazon those years.
Here's a good test of how strategically aligned a company is. Walk up to anyone in the company in the hallway and ask them if they know what their current top priority or mission is. Can they recite it from memory?
But, as effective as it was, sloganeering was beginning to fail at scale. Bezos began adapting his cultural-modification methods. The following is taken from The Everything Store (all bold emphasis added):
Whenever Jeff Bezos roamed a fulfillment center or his own Seattle headquarters, he looked for defects—flaws in the company’s systems or even its corporate culture. On an otherwise regular weekday morning in 2003, for example, Bezos walked into an Amazon conference room and was taken aback. Mounted on the wall, in a corner of the room, was a newly installed television meant for video presentations to employees. A TV in a conference room did not by itself seem controversial, yet Bezos was not pleased.
The installations, which he had not known about or authorized, represented to him both a clumsy attempt at interoffice communication and an extravagant expenditure. “How can anything good be communicated in this way,” he complained.
Bezos had all the new televisions in Amazon’s conference rooms immediately removed. But according to Matt Williams, a longtime Amazon manager, Bezos deliberately kept the metal mounts hanging in the conference rooms for many years, even some that were so low on the wall that employees were likely to stand up and hit them. Like a warlord leaving the decapitated heads of his enemies on stakes outside his village walls, he was using the mounts as a symbol, and as an admonition to employees about how not to behave.
The television episode was the foundation of another official award at Amazon, this one presented to an employee who identified an activity that was bureaucratic and wasteful. The suddenly superfluous televisions were given as the prize. When the supply ran out, that commendation morphed into the Door-Desk award, given to an employee who came up with “a well-built idea that helps us to deliver lower prices to customers”—the prize was a door-desk ornament. Bezos was once again looking for ways to reinforce his values within the company.
Around the same time he was ripping televisions off the walls, Bezos made two significant changes to the corporate culture. As part of his ongoing quest for a better allocation of his own time, he decreed that he would no longer have one-on-one meetings with his subordinates. These meetings tended to be filled with trivial updates and political distractions, rather than problem solving and brainstorming. Even today, Bezos rarely meets alone with an individual colleague.
The other change was also peculiar and perhaps unique in corporate history. Up until that time, Amazon employees had been using Microsoft’s PowerPoint and Excel spreadsheet software to present their ideas in meetings. Bezos believed that method concealed lazy thinking. (...) Bezos announced that employees could no longer use such corporate crutches and would have to write their presentations in prose, in what he called narratives.
The point: as Amazon evolved, so did its mechanisms. The narrative mechanism and the various employee awards are easier things to understand, since they are explicit processes that are straightforward to describe. But harder to capture is its leadership’s penchant for creating legends. This TV mount example is what that looks like.