What Makes an Effective Leader

Organizations that don’t have a set of guiding principles find themselves struggling to be consistent and to always be moving towards their bigger picture goals. A lack of defined expectations also makes it difficult for your team to understand what makes an effective leader. If you don’t give them a sense of what the company values and how you expect your leaders to behave – they have to make it up as they go along.

Those challenges become even more pronounced in times of rapid change. And if there’s anything you know for sure about our industry – it’s that we are experiencing a state of constant change.

My podcast guest John Rossman had a front row seat in being one of the co-creators of the leadership principles that have steered one of the biggest titans of industry, Amazon. They too exist in an industry that doesn’t even begin to resemble itself from a decade ago! Since he left Amazon, John has been using what he learned to help clients define and live by their own guiding principles.  He also wrote the book, The Amazon Way: 14 Leadership Principles Behind the World’s Most Disruptive Company.

In our conversation, John talks about some of the most critical of Amazon’s principles and how they apply to agencies today:

• What makes an effective leader

• Why you need to get really clear on what your future looks like
• John’s favorite Amazon leadership principles
• Why you need to be proactive and take action
• The importance of prioritizing getting to the right answer over getting along
• Structuring interviews so you find the employees that are actually willing to grow and improve
• Amazon’s “think big” and why it’s all about experimentation
• John’s best hiring practices like getting independent opinions before making a hire
• Strategies for breaking something down to its simplest form
• How to get your employees to take ownership in your business
• How to communicate principles in a way that everyone understands they’re the standard
• How John helps companies figure out their principles
• The impact having clear principles has on a business

John Rossman is Managing Director at Alvarez and Marsal, a keynote speaker, and an author. John is an expert at crafting and assisting clients implement innovative and digital business models and capabilities including Internet of Things, marketplaces, and API driven platform business models. He is a sought after speaker on creating a culture of operational excellence and innovation. John has worked with clients across various industries, including retail, insurance, education, forest products, industrial products and transportation.

John’s notable assignments include The Bill and Melinda Gates Foundation, Microsoft, Nordstrom. and several of the world’s leading retail and insurance organizations. Prior to A&M, John was an executive at Amazon.com where he launched the third party selling platform and ran the merchant services business.

To listen – you can visit the Build A Better Agency site (https://agencymanagementinstitute.com/john-rossman/) and grab either the iTunes or Stitcher files or just listen to it from the web.

If you’d rather just read the conversation, the transcript is below:

Table of Contents (Jump Straight to It!)

1. How John’s Leadership Principles Help Business Leaders
2. The Biggest Principle to Focus On
3. How to Create a Comfortable Work Environment for Multi-Generation Employees
4. What it Means to “Think Big” as an Agency
5. How to Hire and Attract the Best Talent
6. The “Invent and Simplify” Leadership Principle
7. How to Create a Culture of Ownership in Your Organization
8. How John Keeps These Principles Front and Center with His Team
9. John’s Process for Helping Businesses Create Their Own Sets of Principles
10. Action Steps for Bringing These Leadership Principles into Your Organization

If you’re going to take the risk of running an agency, shouldn’t you get the benefits, too? Welcome to Agency Management Institute’s Build a Better Agency podcast, presented by HubSpot. We’ll show you how to build an agency that can scale and grow with better clients, invested employees and best of all, more money to the bottom line. Bringing his 25-plus years of experience as both an agency owner and agency consultant to you, please welcome your host, Drew McLellan.

Drew: Hey there, everybody, Drew McLellan here. Welcome to another episode of Build a Better Agency. Today we’re going to talk about leadership and how that shows up in an organization, and you’re going to love my guest today. So let me tell you a little bit about him. John Rossman is currently the managing director at Alvarez and Marsal which is a global professional services firm that delivers performance improvement, turnaround management and business advisory services. John is also the author of a book called The Amazon Way, 14 Leadership Principles of the World’s Most Disruptive Company.

In the book, John explores the unique corporate culture of what we all know as the world’s largest Internet retailer, and he focuses on the 14 leadership principles that he believes have guided and shaped the organization’s decisions and its very distinctive leadership culture.

When he was at Amazon, John served as the director of enterprise services, where he developed the merchant’s ad program, which is the B to B Network that allows millions of sellers to offer products through Amazon. The program that John created is now responsible for over 40% of all the orders that go through Amazon.

He also, as if that wasn’t enough, ran the relationships that Amazon had with enterprise clients like Target and Toys R Us, Sears and the NBA. I’m really excited to dig into this, for you and for me. John, welcome to the podcast.

John: Drew, thanks for having me. Great show. I really appreciate it.

How John’s Leadership Principles Help Business Leaders

Drew: Thank you. Let’s dig right into the leadership principles. As you know, agencies are in a very disruptive time in their history. I often say – I’ve been in the business since I was in my 20s and I’m now in my 50s and I often say – I’ve never seen the rate of change or the pace or the vastness of change in our industry as I have in the last five years and, if anything, it just seems like it’s going faster. If ever there was a call for leadership skills in a disruptive environment, I think for agency owners, that is absolutely today. Your topic and your book is really spot-on for our listeners.

As you sort of look at – I’m sure that you’re doing this, too, in your current role – as you’re looking at sort of the evolution and change that’s happening in business, how are you helping business leaders and how do you think some of the leadership principles in the book helped business leaders keep up? I hear a lot of agency owners struggle with, everything is changing so fast, it’s hard to know what to pay attention to and what’s a fad. How are you helping them sort of focus and keep up with the change?

John: Yeah, great question, and there’s no easy answer to that. I work with my clients, typically large enterprises, that are trying to adjust to all sorts of changes, also. The key thing that I try to help them with is through, it kind of, from the top level, like let’s get really clear on what we imagine the future to be or what the program is that we’re going to drive and, all too often, I find teams – and this can be within a team or with your clients – that you don’t have in-depth clarity as to exactly what you’re imagining is going to happen and all of the dependencies that are needed to make that change happen.

On one, kind of from the top down, work with them on really getting the clarity on what change you’re working to drive. Then from the bottom up, it’s really instrumenting and putting metrics in the conversation and ownership around those metrics to get the results that we want.

There’s lots of other things that are built off those Amazon leadership principles, but those are two that I often find really help people move faster and get to better results.

The Biggest Principle to Focus On

Drew: As you think about the principles that you identified in the book, is there one that pops out in your mind as, this is one, regardless of business size, regardless of business focus or, specifically, when you think about how agencies function, because I’m sure that you’ve interacted with many of them, that really is like, okay, this is one of the principles that you have to absolutely be spot-on focused on?

John: First, I just want to clarify, these are Amazon’s leadership principles, so these are published, they’re their principles. I just got to be there at a time when we were really working, like what are the right leadership principles for us? I got to see how they were used.

Drew: And how do we to actually make them come to life, right?

John: That’s right, that’s right. I think the first lesson, I’d say, is these principles aren’t to be put on a poster. They’re used in everyday meetings to help make better decisions, faster decisions, drive for better results. However you decide to leverage wisdom and common approaches, make sure they’re not inspirational posters, that they’re actually real things that help teams and leaders get to better results.

If I had to pick a couple that I think really impact, I would say Leadership Principle Number Three is “Invent and simplify.” Really, that simplify aspect of it is the real brilliance of that leadership principle. That is about how do we get to the absolute consistent and bare minimum definition or requirement or articulation of what we are trying to accomplish or what it is that I have proposed.

All too often, it’s easy to talk about things and to write things that are obtuse and are too difficult to understand. Getting something to simple and clear is really, really hard work. It improves the work that we all do. I think that that is a big one on my list.

Leadership Principle Number Nine is, “Have a bias for action.”

Drew: Yeah, I definitely want to dig into that one.

John: I just think that it takes good judgment and wisdom to know, when is it time to stop analyzing and when is it time to start doing something, and create quick feedback loops relative to the results of that? Agencies are in such a great business to create those feedback loops, so it really is about defining that urgency to get action, but then make sure that you create the feedback loop so that you can easily test and refine and make forward progress.

I think maybe the last one, on your question, that I would talk about is Number 13, which is, “Have backbone – disagree and commit.”

Drew: Yeah, I was going to ask you about that. I think that’s a challenge for agencies. You’re in a creative environment, you’ve got a lot of people who are very invested in their ideas. How do you create a culture where it’s not only okay to disagree and commit, but that you have – I was going to say commitment – but you have the obligation and it’s understood in the culture that it’s your job to disagree on occasion.

John: I love that word “obligation” and that really is how it’s seen across all of these leadership principles. I think it starts with – and this is how I coach my clients and how I work with our teams and everything – I tell them upfront, this is how we are going to behave as a team. When people start understanding the nature of how we’re going to work together and what the game is, then we are going to have robust conversations led with data and customer obsession but, at the end of the day, this is the decision that’s going to be made and this is the decision-maker.

Regardless whatever decision they make, we are not just going to agree to it, we are wholeheartedly going to commit to making it as successful as possible. Then if we can do that and we create quick feedback loops, we know that moving forward is more important than just continuing to analyze. Those kind of go together. What you see so much is kind of the passive-aggressive behavior of people don’t play their cards, they don’t really say what they think –

Drew: Right.

John: And they don’t really buy into decisions, right? It’s much better to –

Drew: Then they undermine them after the decisions are made.

John: Then they undermine it, exactly. Exactly. It’s so much better to have a proactive and honest … there’s a really good book out there right now called, “Radical Candor,” and it’s all about this notion of caring enough to be able to really get at the heart of the matter. That’s what it really is about. You have to do it in an empathetic way but, at the end of the day, what happens is people prioritize getting along above getting to the right answer. You just kind of have to switch those priorities up, like being right is more important, and being fast is more important than getting along. It’s just switching those priorities, it helps teams move faster.

How to Create a Comfortable Work Environment for Multi-Generation Employees

Drew: In a lot of agencies, you’ve got multi-generations working together and, in many cases, one of the things I hear a lot of agency owners talk about is that they struggle giving constructive feedback to their younger cohorts. It seems like that’s a super sensitive issue, so when I’m looking at the principles and I read, “They do not compromise for the sake of social cohesion,” I think in a lot of cases, that’s a very real struggle for agency owners, to create a culture where everyone has, if you will, thick enough skin to take criticism of their ideas or take people pushing and pulling on their ideas.

How do you create that or how, when you were at Amazon, how did you encourage and create that kind of an environment so that people’s feelings weren’t hurt or that people didn’t pout or, as you said, sort of do the passive-aggressive thing when you’re having a discussion?

John: To some degree, it’s kind of testing people out and it’s setting expectations around this. One of the things I do is, when I’m interviewing somebody, I’ll give them critical feedback relative to the interview. I oftentimes interview people multiple times, and then the next time that I interview them, I see if they make an adjustment, and how did they feel relative to getting that type of direct constructive feedback in an interview? It helps me really see, is this person truly here to grow and to improve, or they want that but they aren’t willing to hear the straightforward suggestions that are going to help them do that?

There’s a lot of techniques. I think asking questions is super important. Demonstrating things and practicing things together, like, hey, this is how this conversation needs to go, let’s practice that conversation. I have a partner that I’ve worked with and we practice together. When we’re going to be having high-stress or high-impact conversations with a client, we’ll practice that conversation together. He can give me feedback, I can give him feedback and that’s how we’ve gotten much better at it.

There’s lots of different ways you’ve got to get to it, but it starts with, are we committed to getting better? If we are, there’s only a couple of ways that’s going to happen, and that’s by getting real feedback and hearing it and reacting to it.

Drew: That’s a really great point. It’s not just that there’s an environment that is conducive to disagreement and really pushing each other to a better idea, but it’s also about everyone having the skills when they are the one doing the disagreeing or the correction, that they do it in a way that the recipient can receive it with some grace, right?

John: Absolutely, and trying to do things one-on-one and not embarrassing. All those things are super important. All too often, things just get pushed to performance reviews and they never get addressed and you don’t hear about it until it kind of blows up. That’s the worst possible outcome.

Drew: I think a lot of agency owners – I’m sure no one listening, but other agency owners – I think they struggle with having those tough conversations, so they put them off, they put them off, they put them off, and then something is the straw that breaks the camel’s back and then, again, back to our passive-aggressive. They sort of explode and then they wonder why people don’t take that well.

John: That’s exactly what happens.

What it Means to “Think Big” as an Agency

Drew: One of the other challenges inside agencies is, as agencies, the stuff that agencies make, gets marginalized because, in theory, anybody can make the thing, whatever it is. Agencies are really trying to position themselves as strategic partners and thinking bigger. Talk about some of the ways that, at Amazon, you guys … one of the principles is, “Think big.” I think agencies always have to be thinking big, on both their own behalf, but certainly on their clients’ behalf. How did you foster that and how did you encourage and teach that inside the organization?

John: It all starts with the customer at Amazon, and I think that’s the simplest way to really evolve businesses, is truly build customer empathy, understand much broader than just how you’re trying to serve them, what their challenges are, what their goals are. Try to incorporate as much of that empathy into your work as possible. That will also give you ideas on how you can serve them in a broader way, and so it drives for both better delivery or operational improvement of what you’re doing, as well as it will give you ideas and insights into how to serve them better.

The “think big” is really about always having a vision, but how do you execute it on very short cycles and how do you increment your way to it is really the skill set. Although it’s super important to have a big vision and to articulate that and work at that, it’s really how do you approach that in an agile manner and undertake steps to get there and experiment what works and what doesn’t work.

The “think big” is really about experimentation and not limiting what you might be in the future, but you have to take small steps to get there.

How to Hire and Attract the Best Talent

Drew: One of the beliefs that I think is so challenging for agency owners right now in the current hiring environment is that “hire and develop the best.” You had talked a little bit about that you do multiple interviews with folks. Are there some best practices that either you brought to Amazon or that you bring to your current job around this idea of attracting, hiring and keeping the best talent? I think the principle is spot-on. I think it’s pretty tough to have a world-class company or world-class agency without world-class employees.

John: I think on the hiring front, the biggest mistakes get made when you’re hiring in a hurry. Like, “Oh, I’ve got to get something done. I need somebody to do this.” I think realizing when you’re, if you’re interviewing and if you’re hungry, you’re anxious to get somebody on board, you just need to realize that’s when you’re at the biggest risk of making a hiring mistake.

I always ask myself, in my consulting business now, which is very similar to an agency business, is if I didn’t have work for that person to do over the next, like whatever period, month or two months or whatever, if I was hiring to the bench, would I still want to hire them? If the answer is yes, then I know this is a great person. If I’m hiring because I’ve got a specific project in mind for them, that’s a warning sign that you’re kind of hiring hungry and you might be acting short-sighted.

That’s, I think, the thing to recognize in yourself when you’re hiring, is am I hiring in a rush or am I hiring with the right patience? At Amazon, they have a role that really helps compensate for that and it’s called the “bar-raiser” role. The bar-raiser is somebody that’s outside the team and their primary evaluation criteria is, does this person raise the bar in this general job classification or skill category? They don’t have the pressure and they are independent to the team, and they can veto. Their answer has to be “yes.” It’s not a consensus thing. If the bar-raiser says “no,” the answer is no, no matter what the hiring manager says.

It really helps manage that issue around teams hiring because they have, they’re hiring in a hurry versus hiring somebody that’s going to be great for this job and for the next 10 jobs.

Drew: That’s an interesting concept. That would absolutely, I mean, talk about a different lens of looking at that prospective employee. I don’t have to work with them day-to-day, I don’t have a project that’s on the line if we hire or don’t hire them, so talk about purely being able to look at them from a cost benefit analysis, if you will, that’s a unique role to play.

John: Yep, absolutely.

Drew: For agency owners who obviously probably may or may not have the staff to do that or, in a lot of agencies, everybody’s work touches everybody’s work, they certainly could have a trusted advisor or someone else step in and play that role.

John: Exactly. I’ve been asked by clients and by friends to interview people just to get an independent opinion on them. I think you reach outside, kind of get an independent opinion is, I think, may be the goal on hiring.

Drew: When you serve in that role, what kind of questions do you ask to decide if they can and will raise the bar?

John: Oftentimes, when I’m asked to do that, it’s for a pretty senior role. With senior people, I think it’s one thing to go, “Are they qualified? Do they have the skills?”, but what I usually end up focusing on is, “What are your motivations?” Motivation alignment is as important as skill alignment and things like that. I typically find myself, when I’m being invited into a team that I don’t have all the detailed background on and I’m not going to live with the decision, per se, going forward, is I really try to understand what’s their motivation. Oftentimes, you’ll find a poor alignment to what this candidate’s motivation is versus kind of where the hiring manager, or what the role is going to take them towards. That’s where I help the situation.

Drew: The assumption is probably if they’re down to their last couple of candidates. Probably both of them have the hard skills to do the job, it’s really more about, you’re right, the soft skills.

John: That’s right.

The “Invent and Simplify” Leadership Principle

Drew: I want to dig into, I want to go back to one of the very first principles that you mentioned, because I want to dig a little deeper in the “invent and simplify.” First, let’s take a quick break and then we’ll come back and talk about simplification.

All right, I am back with our guest, John Rossman, and we are talking about John’s book, that focused on Amazon’s leadership principles and how you apply those. Earlier in our conversation, we sort of glossed over a little bit the principle of “invent and simplify” and I think, when I look across the board at agencies that are really bringing great strategy and they’re really communicating really complicated marketing messages or product messages down to its simplest form, that’s quite an art.

John: It is and for that type of business, as it is for lots of other circumstances, too. People, oftentimes, they don’t want to really do the work at getting something to as simple as possible and as clear as possible.

Drew: It the culture at Amazon, how did you help people recognize when maybe they were a step or two shy of truly simplifying something, or how did you guys sort of check and balance that? I think in a lot of agencies, they’re moving so fast, they may think they’re simplifying it down to its, they’re distilling it down to its simplest form but, in reality, they probably could go down a notch or two.

John: There’s lots of little things that you either recognize or that you’re looking for in the work. Oftentimes, what I do is I just read things out loud. It’s amazing when you read things out loud how differently they come across than when you’re just reading it and silent. That’s one of the things, if I’m reading something and I’m like, okay, this isn’t quite it, let’s just read it out loud.

I’m typically dealing with longer narratives than short messaging. That is an important technique that helps recognize when don’t I have alignment or things completely tied out relative to communications.

Drew: When you do that, do you typically find that you’re crossing off sentences and paragraphs as not really absolutely necessary in this communication?

John: All of that. It’s extra, especially like extra words you find, words like “very” are just completely, a non-value additive and they just add weight. Then, oftentimes, you just haven’t written it from the customer’s viewpoint, like step me through this in a logical way. What people typically do is when they present it, they typically present in the right order. Oftentimes, I’ll read something and I don’t quite get it, and it’s like, what are you trying to say there? And then they really get at what they’re trying to say. It’s like that what’s we need to write here.

In my business, oftentimes we’re working with clients on some type of improvement and it’s amazing how bashful we get about writing out direct constructive criticism, when our clients have hired us to give them constructive criticism. We dance around things. I was like, “No, man, we’ve got to go right at the heart of the issue and state things really simply.” Obviously, if this was a simple situation or simple problem to address, they wouldn’t be hiring us to come in and help them fix it. We’ve got to get right at it and be forthright and fact-based and honest about what we’re finding here.

Drew: In the side of my business where I’m doing consulting and coaching of agency owners or agency teams, I’m a firm believer that they’re paying me for my candor. To sugar-coat it doesn’t really help them because it’s hard for them, if they have to figure out the nuance of what I’m saying.  It’s hard for them, so I always will say to them, “We have a tough conversation to have. We’re going to do it with love and respect, but I need you to be ready for some very candid feedback.” I think you’re right, I think we tend to, what I call “weasel word,” our harder stuff, right?

John: That’s right.

Drew: It’s interesting to me that, and I see this in agency’s work all the time, when they speak, whether it’s for themselves or for their clients, they’re able to sort of really wrap themselves around the right voice and the right tone, but the minute they go to write it down, it gets more formal and a little more rigid, oftentimes.

John: That’s right, and the other thing, if you’re going to write direct comments, is you’ve got to be right. You’ve got to be able to support it. Oftentimes, people won’t want to go directly at it because they really haven’t done the diligence, they really don’t have the facts to be able to support it. I’ll go like, “Well, what you’re really trying to say is, X, Y, Z. Do we have evidence to support that?” “Well, no we don’t.” That’s what we have to do, is we have to have the right evidence to support that observation.

Sometimes, willingness not to make a direct observation or a direct comment is evidence that we don’t have the facts to be able to support it. Okay, we’ve got to get a few facts to be able to support that observation.

Drew: Yeah, we have to have the stories to tell or the anecdotes or the data so that when they go, “I don’t think that’s true,” we are ready to go, “Well, here’s three ways I can show that to you.”

John: That’s exactly right. There’s like, how many times do you want to hear it? There are like, how many ways do you want me to demonstrate this to you? Then they’re, “Oh, okay. I got it.”

Drew: After a while, you can’t deny it anymore. It is what it is.

John: Right.

How to Create a Culture of Ownership in Your Organization

Drew: One of the principles that I think is really applicable to agencies and agency owners, one of the, probably the most common, phrases I hear from agency owners is, “I wish my employees behaved as if they owned the joint.” One of the principles is ownership, that leaders are owners. The principle goes on to say they think long-term and don’t sacrifice long-term value for short-term results.

How did you create, and that says they act on behalf of the entire company, not just on behalf of themselves or their own team, they never say, “That’s not my job.” How did you create, or how did Amazon, before you were there and while you were there, create a culture – because I expect the workforce there is incredibly diverse and I’m sure you had plenty of hourly people who were in the shipping departments and all the way up to the executives – how do you create that sort of belief and attitude and commitment inside an organization?

John: Lots of ways, but I think one way is by making sure that you’re having the right broad-based conversations so that people are understanding the business or the circumstance or the project, in a broader perspective than just their particular function to it. Oftentimes, people don’t understand how their work connects to the greater project or to the greater good, to the mission that’s at hand.

We would spend a lot of time talking about what is the mission here and taking more time than you may think is necessary, but one of the things that that breeds is, okay, your job is this, but when we’re talking about it in a broad sense, everybody has the permission to make suggestions and to address things that they see.

When you consistently bring or build that independent attitude, and that everybody has their job but we’re all owners here, so we can all comment on things broader than just your job, that cycle starts to form. It’s not an easy habit to build and it’s not a cheap one to build. It takes time and it takes effort, but if you do it, I think the dividends are huge, because it invites people and it gives them context to play the game in a heads-up manner.

Drew: The other thing I think it takes is, it take a willingness to sort of open the kimono. I think a lot of business owners, and I’m sure this is not just true of agencies, but a lot of business owners want their employees to care as deeply as they do, but they’re also not willing to let them see the realities of the business, whether it’s how close we are to hitting our projections or our costs are skyrocketing because of this, that or the other thing.

A lot of times they worry about, well, if I tell them that sales aren’t where they belong, they’re going to start looking for jobs or whatever, but they sort of, on the one hand, want them to behave like grownups but, on the other hand, they sort of treat them like children.

John: I think transparency is a super important way to help build that sense of ownership and I completely understand all the sensitivities that you just described. As you were just saying, you’ve got to pick. You’ve got to pick one side or the other, right?

Drew: Right.

John: Don’t expect both of those. Don’t expect to be able to hold it really tight but ask them to act like owners. That’s likely an impossible situation.

Drew: I think it’s setting yourself and them up to fail if you don’t give them the respect and the information they need to actually behave like owners to understand, as you said, to kind of connect the dots between my job and the bigger picture, then how in the world can I behave, how can I step up to what you’re expecting me to do?

John: Right, and it’s also through these types of broad-based conversations, it’s how you’re going to grow people, too, and where you’re going to really recognize untapped leadership potential. I think if you just keep people tied to their job too much, you’re not going to grow the talent to its utmost. I think that under-serves your business and under-serves talent.

Drew: In today’s hiring environment, if you can’t grow and develop people, that’s a very expensive problem to solve.

John: That’s right, and your business growth should be in alignment with growing people and giving them accountability to grow the business. In our firm, people understand for careers to grow, the business has to grow. We have alignment in that. I think that’s one of the real powerful aspects of this agency-based business model is, there is alignment between the goals of the business and the goals of people growing their careers, and that to grow careers, the business has to grow. When both are happening, that’s when you’ve got a really virtuous cycle going on.

Drew: It also ties to the other principle, this sort of idea of insisting on the highest of standards and holding yourself to a high standard, but also holding your team to a really high standard in terms of whether it’s the products or services you produce or the processes, that everyone actually honors the processes. That, again, it gets back to everyone having permission and the comfort to raise their hand when something isn’t as good as it should be or the process is broken, or whatever that may be. All of these things seems to knit nicely together, that if you focus on any one of them, it sort of raises the bar on the others as well.

John: We’ve talked about there’s lots of these little things. No one thing is going to create this high-performance team. I think that’s why Amazon ended up with these 14 leadership principles and a lot of different tactics underneath those leadership principles. It is this multi-faceted playbook that you need to –

How John Keeps These Principles Front and Center with His Team

Drew: How did you guys bring these to life? How did you – as you said in the beginning of our conversation, this is not something you put on a series of posters in the breakroom or hang around the office – how did you keep these front and center? How were they woven into team communications or evaluations or how did Amazon make it very clear to the team at Amazon that these were the standards that everyone was going to be judged against?

John: When I was there – I was there for four years, between early 2002 to late 2005 – and when I was there, these principles weren’t written down, yet you heard about them and you used them in all your processes, how you hire people, how you evaluate people, how you made decisions every single day. The thing I’d say is that at the S Team level, at the senior team level, so much time was spent talking about whatever the topic was on the table, how did this reflect on what our principles were and what our principles need to be, because we were still kind of developing them at that point.

Sometime after I left, they codified these, they wrote them down. And they do, they incorporate them throughout everything they do, from hiring to how they train leadership, how they evaluate people, and people call each other out when you weren’t being tied to a leadership principle or you’re missing on kind of one cylinder.

Drew: Back when you were with the organization, they were really more tribal knowledge?

John: Absolutely, yes.

Drew: Even then, in that big of an organization, they were commonly held and understood?

John: Oh, yeah. It was used in conversations every single day, multiple times every single day, and we would wrestle with them. That’s the thing, is you don’t always find alignment between these, so it forces you to struggle to get to a better answer that does accomplish things in line with as many principles as possible.

Drew: I have to think that there were times when the principles were in conflict with one another. For example, let’s say you had a big, big idea but you’re also wrestling with the frugality principle. How did you guys process through which principle won, if you will?

John: At the end of the day, if it was kind of a draw, oftentimes it came down to doing what’s right for the customer first and foremost. That’s the first leadership principle, is customer obsession, and I would call it kind of the first among equals. It’s the conflict in where they aren’t in alignment that forces you to keep working to get at a better answer.

If the challenge might be like, hey, we’ve got this big vision but that’s a risky and expensive proposition, that might force you into, how could I either create a smaller increment to test it or how can I leverage partners or other ecosystem partners to take on some of this so it would de-risk it but still allow me to test out the concept? It would force you into different problem-solving areas.

John’s Process for Helping Businesses Create Their Own Sets of Principles

Drew: Interesting. I’m guessing in your job now, although it sounds like the clients you work with are large and established, do you ever find yourself helping businesses actually identify what their principles are and, if so, is there a process you take them through to distill down to the core or critical principles?

John: Yeah, I have done that in a couple of circumstances where a function or a team was really trying to transform who they were. Oftentimes, within IT organizations, they’re really trying to step up to be a critical business partner and a strategic business partner to the business’s digital capabilities are critical versus kind of just being the backroom processing.

I think first, it’s really understanding what is the business strategy and the business imperative, it’s understanding what seems to be the challenges in delivering relative to that, and then, through a lot of different, either facilitations or examples and taking the pulse of where we’re at and what we’re working with, kind of recommending and helping them write out what would be meaningful.

The thing I hesitate to do is, A, I never say, “These are the right principles” for anybody else. These are the right principles for Amazon, and my only recommendation is, take the time to really think through what they are and make them real. Make them so they could be actionable. I hesitate to ever write them for my clients. I’ll help them do that, but they need to be the ones who own and develop their own principles.

Drew: Right, they have to be born from inside the organization, right?

John: That’s right.

Drew: This is not something that you apply to someone, this has to be something that is innate in them and your job and, in some cases, my job, is to help them discover and uncover and articulate them, but it’s not making something up out of thin air.

John: That’s right, and I just keep challenging them to make them real and make them impactful and how are we going to more or less operationalize these, right?

Drew: Right.

John: Like how are we going to make new habits based off of these principles?

Action Steps for You to Do What Makes an Effective Leader

Drew: That’s what I was just going to ask you. I think it’s dandy to have them and I think many organizations have them but I think a lot of organizations struggle with making them relevant and real. Let’s assume that the listeners are saying, “Yeah, I’ve got four or five principles or values,” or whatever they want to call them, “But you know what? I’m not sure if I walked through the organization, and I said, hey, what are the five values that we’re founded on, that everyone on my staff even could tell me what they are, let alone point to how we honor those.”

If you were an agency owner and you’re sort of in that position, just give everybody a couple first steps of how to actually begin to bring these to life and to make them sort of the cornerstone or the backbone of how people make decisions and behave inside the organization. How do you actually move from poster on the wall or document in an employee manual, to this is really the rules of the road for us?

John: That’s a big question and so here’s a couple of little ideas, but it’s not, the answer is, there’s a hundred different little things.

Drew: Of course.

John: I think one thing is, how do you run meetings? I talk about meeting hygiene. Before you have a meeting, make sure you understand, is it a decision-making meeting or an informational meeting? If it’s a decision-making meeting, what decisions are going to be made and who’s the owner for that decision? What you’re doing is, you’re trying to set up this whole notion of disagree but commit by understanding what decisions we’re going to make and who is the decision-maker, but allowing for the right conversations with the right data and the right customer obsession to help drive that decision. That’s a tactic.

A lot of what Amazon does is they are a great operational excellence organization, and it really comes from how they use metrics in the business and how they use those metrics to drive everyday improvements. The whole rhythm of the business is set up around metrics meetings every single week with teams, and in reviewing your metrics and then discussing where there were shortcomings and where there was failures. Think about, how do you put the right metrics and then how do you assign ownership to those metrics. Even if the metric is broader than what your job is, don’t be bashful about assigning it to somebody. That helps break down kind of the bureaucracy and the not-my-job mentality there.

Those are a couple of ideas of how to operationalize some of these things. The other ones that we’ve talked about are just like writing out narratives for your important initiatives and programs, and work the wording. Make it the world’s best wording, super clear, super tight, super specific, so that somebody can read it and they get it at the end of it.

Drew: I suspect that the fact that you wrote a book about it is part of the answer but, in your opinion, with all the businesses that you’ve worked with, how critical is the idea of having principles or values that are shared and honored through an organization? How correlated is that to an organization’s success?

John: I think it’s highly correlated because it allows the organization to be less bureaucratic. If we all share the same values and we share a common decision-making framework, then we don’t have to put in all the bureaucracy that manages decisions up and down the hierarchy, right? I think being lean and mean and nimble is the key to competitive success. That’s my rationale for why having common ways and common – these are really decision-making approaches. That’s where these, these are principles, they’re not quite values. They’re principles about how to make decisions.

Drew: Almost like divining rods.

John: That’s right. It really helps the organization to move faster and to push down decision-making to wherever the right level is.

Drew: Which is what every agency wants to do. Every agency owner wants their people, their entire organization, to sort of be in alignment so that the owner isn’t the only one making big decisions and driving the strategy of the business. Every owner wants that to be shared amongst the organization, so this has been a great conversation around how to get that done.

Thank you very much for your time. Thanks for sharing your expertise. I’m grateful that you carved out some time to do this.

John: Thanks for the invitation and I think it’s such a great opportunity to create teams that matter and I think, everybody, to take the time to reconsider what you’re doing relative to how you make decisions and how do you create an environment of empowerment. It is a big, big objective in today’s business.

Drew: Absolutely. John, if folks want to track you down or read more of your thought leadership or learn more about you, where’s the best place for them to go to do all of that?

John: My blog is johnrossman.com, so you can go to johnrossman.com and read about the things I’m interested in. I usually write about creating effective teams and creating digital cultures, and you can read more about my books there.

Drew: Awesome. Thanks so much for your time. I appreciate it.

John: Have a great day.

Drew: You, too. Believe it or not, that wraps up another episode of Build a Better Agency. Man, the time goes by quick. Love sharing this content with you, and I love spending the time with you, so thanks so much for listening and sticking all the way to the very end. For those of you that did stick around to the end, I’ve got a special new twist for you.

So many of our podcast guests have books or other things that really expand upon the information and knowledge that they share with us during the podcast, so we’ve reached out to them and we’ve asked them if they would like to give away some of their books or whatever, classes, whatever it may be, and we’re going to throw some AMI things in there as well. We’re going to have some AMI swag and we’re going to actually give away some workshops. All you have to do to be in all of drawings, you only have to do this once, is go to agencymanagementinstitute.com/podcastgiveaway.

Again, agencymanagementinstitute.com/podcastgiveaway. Give us your email address and your mailing address and every week, you will be eligible for whatever drawing we’re doing. We’re going to change it up every week, so we’re going to have a lot of variety and we will pop an email to you if you are the lucky winner. You can also go back to that page and see who won last week and what they won. You can see what you’re in the run for. If you have any questions about that, or anything agency-related, you know you can reach me at [email protected]. I will talk to you next week. Thanks.

That’s all for this episode of AMI’s Build a Better Agency, brought to you by HubSpot. Be sure to visit agencymanagementinstitute.com to learn more about our workshops, online courses and other ways we serve small to mid-sized agencies. Don’t miss an episode as we help you build the agency you’ve always dreamed of owning.

Don’t forget if you’re looking for more guidance on what makes an effective leader, sign up for our Money Matters workshop. If you’re already an AMI member – register for our money matters workshop with your discount here. 

Not a member? Learn more here.