- Amazon’s CEO has advice for companies that want to cut management layers.
- Andy Jassy said companies should have a solid feedback loop in place to figure out the biggest problems.
- He also said companies need to keep working on resolving the issue if they want to see change.
Amazon CEO Andy Jassy said the company is on a mission to “operate like the world’s largest startup.”
“We want to flatten our organizations, to move faster and to drive more ownership,” the Amazon CEO said during a speaking event at the Harvard Business Review Leadership Summit on Tuesday.
In addition to a five-day return to office mandate, Amazon has undertaken a plan to increase the ratio of individual contributors to managers by at least 15% across the company. Jassy said it will have beaten that goal by the end of the first quarter.
Jassy said the company hasn’t perfected its mission yet, but companies wanting to follow the same path of reducing bureaucracy should follow these three steps.
Step 1. Address the issue
“The very first thing is the leadership team deciding they want to actually change it and resolving themselves to take action,” Jassy said about cutting down on bureaucracy.
Jassy said in Amazon's case, it decided to flatten the organization because it wanted to give individual contributors more ownership.
Jassy said this step isn't "simple" because people get used to operating in a certain way, and then it can feel impossible to change the organizational structure.
Step 2. Figure out the biggest problems
If companies decide they want to move fast, Jassy said they first have to figure out what's slowing them down. Jassy advises companies to develop good feedback loops to sort out those issues.
"It's really hard to see some of the red tape deep in your organizations," Jassy said, adding that visibility can help you "knock down a bunch of things."
Jassy said Amazon started a "no bureaucracy email alias" where it encouraged anyone in the company experiencing bureaucracy to email him.
In about six months, he said he received over 1,000 emails, all of which were read. Not all of the emails included examples of bureaucracy, he said, but many did. Jassy said he draws a distinction between "process" and bureaucracy, and considers the latter to be processes that are layered in without adding "any real creative value." The emails have already helped change 375 processes, Jassy said.
Step 3. Keep working at it
Jassy said that there are all sorts of "natural ways" that companies can get bogged down as they grow. He added that while Amazon has a "really strong culture," it's not its "birthright to keep having a strong culture."
While Amazon leadership may have decided to tackle the problem and shift its organizational structure, that doesn't mean its problems were solved overnight. Jassy said that Amazon still hasn't quite nailed its mission to flatten its workforce, and companies have to "keep iterating at it."
"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," Jassy said.
Amazon did not respond to a request for comment from Business Insider.