NAB Digital Next

What it means to be customer ‘obsessed’ at Amazon

In the latest episode of NAB Digital Next, guest host Lance Thornswood, NAB’s Chief Design officer speaks with Stephen Brozovich, Enterprise Strategist at Amazon Web Services about their culture, innovation and transformation.

Their discussion focuses on:
• Stephen’s fascinating career journey from web developer to evangelist and strategist. • How easy it is to lose sight of customer obsession in a long chain of value creation. • Staying committed even when the going gets tough. • Durable truths and being ‘uncomfortable’ with customer obsession.

Listen to the full episode on SoundCloud, Spotify or Apple Podcast.

Duration:: 29m
Broadcast on:: 04 Jul 2024
Audio Format:: mp3

(upbeat music) - Hi, I'm Lance Thornswood, Knapp's Chief Design Officer, and welcome to Knapp Digital Next. In this week's episode, we're switching things up a bit, and your usual host, Brad Carr, has relinquished the microphone to me. We're in for a big treat today, 'cause in a moment, we're going to hear from Steven Brozovich, who is joining me at our Knapp office here in Melbourne. He's visiting from Seattle, Washington, where Steven is a leader in the AWS Enterprise Strategy Team, having previously been AWS's principal evangelist. What a fabulous title is that. I can't wait to dig further into that. Steven's career at Amazon to date has spanned an incredible 24 years. With a background rooted in technology, Steven has a deep expertise in organizational culture, and the people and processes that enable innovation at scale. With Amazon's mission to be Earth's most customer-centric company, and put customer first, Steven has had a front row seat on how to drive this culture across a massive multinational workforce. Without further ado, let's welcome Steven into Knapp Digital Next, and thanks so much for joining us. Perhaps you could start by sharing a bit about your career journey, what drew you to AWS, and what prompted your trajectory into culture, innovation, and transformation? Well, first off, let's say thank you so much for the opportunity to spend some time. I've had the privilege of spending the last three and a half days deeply immersed with leadership and different teams from Knapp, as you are on your own journey to discover what customer obsession might mean for you. I started my journey at Amazon 24 years ago. I started out as a web developer. My primary area of expertise and work was really on our website platform team. So doing a lot of work in building the tools and infrastructure that our site merchandisers and our business owners needed to be able to drive their business successfully with customers over the years. But about 11 years ago or so, I took a strange left turn out of technology because as fascinating as technology is to me and has continued to be, I became more intrigued by the human elements. Because every time you inject new technology or capability into an existing organization, it requires a pivot on the part of the organization to really be able to take advantage of that technology. And so about 11 years ago, I took this strange left turn out of tech into the wonderful world of HR to focus primarily on people and culture. So for a period of time, I was the leader for our Amazon culture program, which was tasked with how do we ensure that Amazon is still the most customer obsessed company on the planet, 20 years from now? When you think about that, there's a lot of pressures that faces as an organization. We are a publicly traded company. We have a very prominent brand. There's still a lot of activity that we might do that try to satisfy many different stakeholders at once. But at the beginning, and we remain laser focused on trying to make life better for the customer. That's the root of everything that we do. And I found that oftentimes we were our own worst enemies in terms of how we structured the organization, how we organized the work, how we measured and evaluated things. And so that's really become a big passion of mine as we think about the organizational structures that are currently in place that might potentially be inhibiting the growth and might be inhibiting our ability to truly be connected to customer and everything that we do. So my journey evolved from there. I was in part of our leadership development organization. I was then asked to head our talent management organization within Amazon Web Services. I was a music major in college, so none of this career path makes sense. But then for the last five years, I have, whether as a principal evangelist and now part of the enterprise strategy team, my focus has been to take some of the learnings we've had from our own journey in Amazon and share them with customers and partners across every industry segment. Because we believe not that we have the right culture, but that the challenges we face are common to any organization that really seeks to transform itself over the years. So it's been a real privilege to spend the last three and a half days here with NAB doing some of that very same work and hearing more about the exciting journey that you are on yourselves. Absolutely. Well, it's really great to hear that Amazon, too, has to say very mindful about culture and org structure and all of that in order to be the customer-centric company that you are. Jeff Bezos, of course, is famous for saying start with the customer and work backward. We've heard a lot about the strategies employed by Amazon, such as reserving empty chair in a meeting room for the customer. This is far more than symbolism, I gather. And I wonder if you could share some of your thoughts on how teams can remain laser focused on the customer and everything that they do, particularly in the large organization, like Amazon or like a big bank, where some parts of the workforce are just so far removed from the customer. Yeah, it's a really important question. And there is a tendency sometimes to lose sight of the value we're trying to drive for the end customers. We think about maybe the next team in the chain of events. The truth is every team has customers. Sometimes they actually can't enumerate who those are. So one of the key questions every team at Amazon has to be able to answer is who is your customer? That seems like a simple question. But we'd like to kind of expand the bubble and say, who benefits from the work that your team produces? Who are all the people that depend on some output from your team? Are you thinking about them with the same type of focus that you might put on the end customer if you were working in a local branch and saw that person walk through your door? We use a term to describe how we think about customers. We talk about customer obsession. It's an interesting word choice because that's not often a positive human quality. If you're obsessed about something, there's usually something wrong with you. And yet we think it's a perfect word to describe how often customer should intrude in our thinking and every decision that we make. And so for those internal teams, we want to say are you thinking about all of the next teams that benefit from your work as a customer? And first, we identify who the customer. The second question that's really impactful and useful is how are you listening to them? All too often, wherever we find ourselves, we start to operate under assumptions of what we think customers want based off of our prior experience. And we find that can be helpful, but it's not sufficient. We need to be hearing constantly from customers and knowing how are we distinguishing the signal from the noise? How do we actually know what matters to those customers? Because ultimately, we're trying to answer the third question, which is how do you make life better for those customers? And you can't actually answer that question definitively if you don't know who your customers are and know what things impact them. So from the terms of an internal team, is what I produce easy for them to digest? Is it clear? Understandable. If I'm producing a user interface or a tool chain that somebody has to use, how many steps does it involve? Am I actively working to simplify the interface for the next team in the chain? And that laser-focused saying, who's your customer? How are you listening to them? And how are you making life better for them? I think that can apply to any team regardless of where they find themselves in the organization. And when every team in the organization is doing that, that can have a tremendous transformative effect. I will put one caution though, because sometimes we start to sub-optimize for the next team in the chain. And we think our job is done. Well, I solved Lance's problem, he's good, we're good to go. But sometimes, as we sit and talk with that internal customer, maybe neither of us has clarity as to how that particular unit of work is actually benefiting the end customer. And this is why we like to use that phrase to say we work backwards from the customer. And if we are doing some unit of work and neither of us really understands how it's benefiting the customer, then we should actually question whether or not we should be doing this work at all. If we're truly wanting to be customer-obsessed, it needs to be work that's connected to the end customer. - Absolutely, absolutely. Such a great way to think about the value chain and the way that everybody's decisions impact. Yes, not just the end customer, but also everybody else in the chain, 100%. In your role at AWS, you've led digital transformation conversations with leaders across probably every imaginable industry. And I'd love to hear a little bit more about what you've learned on what hallmarks or traits you've seen within those organizations that are maybe common. And the things that enable you to stay relevant, innovate and adapt kind of no matter what industry it might be. I don't know if Flipside also loved to hear, have you seen things in company cultures, places that really struggle to get there or what do they have in common? - I think I'll start actually with the second half of the question first. I think those anti-patterns that we see. And one of the challenges we see many organizations try to limit the impact of a failure with their transformation effort. And to do so, they pick some side part of the business that maybe doesn't have a direct negative impact on the customer and they run their experiment there. That could be they're trying a new technology and they're using it in that space or that could be that they're trying a new way of organizational model. Perhaps they're changing from a latter file development methodology to more product focused, agile team development methodologies. And their experiment is limited to some part of the company where it doesn't really matter. And that's a very common pattern because, and it makes sense, right? They don't want to expose themselves to an ordinary risk. However, the challenge with that is it typically doesn't end up driving transformation across the organization. Because if that experiment succeeds, the rest of the company points to it and says, well of course it would work over there, but it's never gonna work in my patch because I have the following constraints and that team didn't have those. The flip side, if it succeeds, it's the same argument. Whether it's successful or unsuccessful, it's not successful. I told you it wouldn't work, and then you're still not having any kind of transformation. The flip side of that that we've seen at Amazon and we've seen at other companies is where, yes, you might run a small experiment initially in a space, but the very next move needs to be something consequential. As an example, when Amazon as a retail business began adopting this brand new thing called AWS, one of the first platforms we migrated onto AWS was our ordering platform. The lifeblood of Amazon's retail systems. Now that did a couple of things. One, it actually exercised the technology so we could definitively know whether or not it would work. It actually helped AWS grow because we were one of the first large enterprises to say, "Hey, we wanna use AWS as a service. No backdoors treat us like a large enterprise customer. AWS had to grow and adapt as a result of that, and we as a business then could actually prove whether or not this worked." When that process was done, by the way, it was expensive, it took time, it took risk. We run two systems in parallel for a period of time. So somebody might say, "Well, this is a waste of effort, it's duplicative." But when it works and then we're able to see that the price performance is much better on the new platform. We have better latencies, we have better customer experience on the new platform than the old. We turn off the old platform, the new one's now running. Well, there are lots of other parts of the business that haven't transformed yet. But now all of their excuses are overcome in large part because we already moved something really hard. Somebody might say, "Well, is it performant? Is it secure?" We were handling customer credit card transactions, the lifeblood of our business on this new platform. And so one, it helped us work out the challenges. And two, it actually helped convince then all of those people that might be reticent to follow that. And so we've seen that same model play out. That would be maybe more the success pattern. It would say, yes, try the experiment and then very quickly move on, whether it's a culture change or a technology adoption, quickly move on to something that matters because that's where you'll start to get the momentum for transformation within the rest of the organization. - Absolutely, very interesting to hear kind of that, that focus on striking a really good balance between experiment but in a committed way. - Yes. - That really sends us strong signal. - Yeah, absolutely. Now, one of the key things that I've heard is a real core tenant of Amazon's approach to innovation is not to do it just for its own sake. It's very tempting in tech to find a cool thing. But rather to really make sure that we're innovating on behalf of the customer. And it would be great to hear about how is your team thinking about emerging tech, like AI? - Yeah, sure. - And how can some of those emerging technologies be deployed but with a mindset towards customer need? - Yeah, no, it's a great question and this is definitely a pattern that I think most of us that are in tech are somewhat familiar with. I mean, right now the word that everybody's using and there's a lot of how about about is generative AI. And it is a transformative technology. All I need to do though is rewind the clock about seven years and bring up the term blockchain and ask how many of us, even as leaders, had very large corporate initiatives around this new emerging thing called blockchain and then let me ask how many of them actually have something today. There's an actual use case for blockchain. And so we do find areas like supply chain where it's actually a very, very useful tool, but there was a whole lot of wasted effort and energy in all these other places because companies were pursuing blockchain because it was the hot tech, not because it was the right tool to solve the particular job that they needed to do. And I would argue the same thing is happening today with generative AI. There are some incredibly valid use cases where generative AI may truly unlock speed and time to market in development and a lot of other activities. But the truth is there's also a lot of other great tools out there that the company may not be leveraging that maybe actually are at a much lower price point than the cost of generative AI. It's still a very expensive proposition to do and it has to be the right tool for the right job. And so the lens that we take with every new initiative at Amazon is we actually don't do tech for tech. We're gonna work backwards from a known customer need and then we go look at the toolkit. And if Gen AI is the right thing to pull out, use it. But this is equivalent to saying everything looks like a nail if all you have is a hammer. That's how people are gonna use generative AI. So it's grounded in that. And it's more than just saying we should pay attention to the customer, make sure that's at the heart of what we do or that every initiative needs to start back from the customer. But a concrete example, our technology teams, as they build on behalf of their customers, are producing roadmaps that they share routinely with leadership to say, here's what we have today, here are the features we're planning on launching, here, here, here, and here as they lay out the year. Our senior leadership routinely will select some random feature on that page and say, which three customers need this? And if the team doesn't have an answer, that's a big problem. Because to your earlier point, we don't build tech for tech. We build tech because it's connected to a real customer problem that we believe this approach will be able to solve in a really unique way. And so that would be kind of, if there's any advice or guidance I would give, I would say absolutely, pay attention, go read, try to understand what generative AI is, but look behind the hype for those real use cases where this could be transformative for your business. And understand, like any technological change, this will potentially be disruptive for your business. And so the more you understand about what JNI is and does, the better you'll be able to look at what is the proper application of that tool, and then what are the ramifications to the company when we do so? - Absolutely. I love your use of everything looks like a nail. It's something we actually talk about quite a lot in reminding ourselves to not let that new cool thing become so exciting that you forget everything else that's around you, so I love it. You know, kind of bringing things towards our close here. As you look ahead and think about the future of customer centricity, or I guess I should say, customer obsession within Amazon, how do you anticipate that's gonna continue to evolve? - It's a great question. It's actually a pretty frequent question that we get in Amazon where somebody will say, well, what's gonna happen in the future? And what do we know, how will technology evolve in the future? I bet if you had asked us that question four years ago, very few people would have said generative AI. And so it can be a good question to ask and say, well, what's the future gonna hold, and how is it gonna be different in the future? We actually spend a decent amount of time. In fact, I would say a majority of the time asking ourselves, what are the durable truths that won't change in the future? Because we find there are some things that are true about the customer today that will not change five years ago, no matter how the technology evolves. So let me give you a concrete example of some of those durable truths. In our retail customer experience, we think there are three things that will always be true of the retail customer. They want low price, they want convenience, and they want choice, selection. There's never a universe, no matter what technology comes in, we cannot envision a universe where somebody would say, I love this thing you're selling, I just wish I had to pay three times as much for it. It's not gonna happen. Or, oh, I really, really want that thing, but I just wish it took two more weeks to get here. No, we know that those things are always things that we're gonna wanna bring down. And so what that often gives us is the ability to then go invent with confidence that what we're building is going to be viable as a product for the customer, because it's addressing one of those durable, persistent problems. I think a great example of that was when we decided to build the Kindle, our ebook reader. I mean, I was at the company at the time, and I thought, what in the world are we doing? Why are we doing this? First, we were not a devices business at the time. We had never built a piece of consumer hardware in our company's history, so why would we try? Second, we weren't first to market. Sony had an e-reader out before we did, and it had been a commercial failure. So I'm thinking, why in the world would we do that? Do my leaders not read the news? This is a bad idea. Third, what was our primary source of revenue at the time? It was physical books. So why in the world are we launching a product that potentially undercuts my primary source of revenue that this doesn't make sense? Until we step back and say, who's the customer? How am I listening to them? How am I making life better for them? Well, our favorite customer at the time bought a lot of books from us. Okay, then we would say, what is an enduring truth about that customer? Well, one thing that I could bet on is that everybody who loves to read is always gonna want more to read. And so we know customers are always gonna want more books. Okay, what then is the persistent problem that every book lover has? You know the answer. Books are heavy, and they take up space. Those are those persistent customer problems. That the only way to solve that is to invent a new thing called the Kindle that actually addresses that problem. Now, the great news for us, from a customer centricity perspective, was this actually didn't kill our physical book's business because we have a lot of customers who still love the physical book. In fact, we have customers that buy both versions because they find one more convenient for the transportation situation and the other one when they're sitting at home or on the beach. They prefer the other format. And so that's an example of where when we focus on the durable needs of the customer, technology will come around that help us meet those durable needs. And we don't have to be afraid of what that new tech is because we're anchored in delivering value against those durable customer needs. That makes a ton of sense. And I am that guy, by the way. (laughing) Thank you for that. I appreciate that for you. (laughing) Yeah, I buy a lot of books on design and I really appreciate the large formats and the beautiful color. Yes, yeah. And I also love having it in my bag, in my Kindle. That's right. So that it's always with me when the question comes up at work. Yeah, fantastic, really interesting. So, one last thing for you. I loved your point on durable truths, right? The things that will never change. And I think about so many companies, we all want to be customer centric. You know, who would say they don't, right? Who doesn't want to be customer focus, customer obsessed? Yet, I think it is a bit of a durable truth that so many companies do struggle with that. And I'm curious if you have any observations across all of your interactions, all your travels. Are there things that we can think about doing differently so that we, so we can eliminate that durable truth of us being struggling with that? Sure. I think that the common factor that I've seen is that the organization that every organization has today, their structure, their systems of rewards, their systems of compensation, how they hire, how they promote, all of those people elements are currently structured around the old way of doing business. What I mean by that is humans are going to respond to behaviors that are incentivized or disincentivized. And so in some cases, I might have a leader, maybe it's not customer obsession, but maybe they say, we need to learn how to invent and we need to learn how to fail fast. So as a leader, I believe in empowerment and I believe in failing fast. And yet, perhaps our approach to performance management sends the very strong message that we punish mistakes. So the behavioral patterns of the organization are actually reinforcing a different set of mental models than what we are trying to accomplish. So when we say we want to become customer obsessed, the first question I would ask is, have you taken a look at the rationale why people are not customer obsessed today? I think to your point, I don't think there's any individual in an organization that doesn't want to be doing the right thing for the customer. But a lot of people in those organizations have learned through repeated behavior and the models that are actually employed in the company to say, yeah, we say customer, but we really mean revenue. Yeah, we say customer, but we really mean regulators. Yeah, we say customer, but we really mean. In other words, the mechanisms of how the business operates, even down to how we think about compensation can be sending a very different message than where you're trying to go as a leadership team. And so I'm not suggesting that you have to throw everything out, right? You have a lot of really great processes inside your organization, but I do think it's worthwhile to examine them and ask, is there a part of this process that is working against our desire to become customer obsessed? And then it might be a point of maybe stack ranking those in order of magnitude and say, which is gonna have the most outsized impact? I'll give you one concrete example of where we've seen that play out. We know that there's an approach to pay for performance where many organizations tie a bonus to the achievement of specific business objectives. And you set an objective in January and then you're measuring progress against it. And if you hit your objective in December, you get your bonus. Now insert into that world customer obsession. What if your objective in January is aligned with customer obsession? But by the time we get to June, the climate has changed, the business environment has changed, the customer's needs have changed. But I'm not incentivized to pay attention to customers' needs. I'm incentivized to do whatever I was assigned in January. So in that moment, our compensation philosophy is actually the thing that's getting in the way of us being able to be customer obsessed. I'm gonna optimize around what gets me my bonus, not necessarily what's the right thing for the customer. And so that's just an example of one area of many that actually may be getting in your way as an organization from truly becoming customer obsessed. Or from whatever your transformation goal might be, looking and identifying those biggest blockers is great way to start the conversation of the transformation. - So I've had the opportunity to chat with you several times throughout the last several days. And I honestly could go on for another hour or more today. I always, I just find it fascinating. Everything that you've shared and kind of all the journeys that you've been on. All right, Stephen, well, this has been amazing. And I could go on for another hour easily. But we are about out of time. I'd love to play back a couple things, a few of the things that I heard from you. And then if you've got any kind of final words of words that we'll love to hear them, I find it fascinating that your journey started as a web developer and you've kind of really emerged into this evangelist strategist role that helps so many companies around the world do a better job. And wow, what a fascinating career path. But I think an inspiration to people starting their careers. As you talked about customer obsession and how easy it can be sometimes to lose sight of that end customer in a long chain of value creation, I really resonated with your point about, think about who your customer is, even if you're deep within an organization and that your customer may be someone else in the organization. And I thought it was really fantastic. The way that you also bounded that and what sprung to my mind was sort of the concentric circles of I have my thing that I need to do. I'm gonna be mindful of the next ring that who I'm delivering something to. And we all need to be mindful all the way out to the edge where the customer is. And wow, I think that is a great, in my mind is a great vision that I think is great where we great for people to wrap their heads around. When we talked a bit about companies that kind of do this well or companies that try and maybe struggle a bit, I really connected to your point on committing to really do it. And even if you use maybe an experimental way as you did with AWS and the payment system, it's a truthful on commitment to the experiment. And when it goes well, be ready to scale. And I've seen so many companies that have a bit of a toe in the water approach. And I thought your point was really good. Everyone knows it's not real. And so you don't really do it. - Exactly, exactly. - I think it's really something that go big or go home. Finally, I was really, really impressed with the point around the durable trues. And we think about, you know, as a species, right? We're tens of thousands of years old. But the reality is we haven't really changed that much. (laughing) And so I think rather than being totally exuberant about the next new tech and instead saying, what is it about humans that will probably remain the same? And then we go to the tech and we say, well, look, now there's just a new tool in the toolbox. - Exactly. - Right? And so I think there's really something powerful in that so that we don't, yes, so that we don't do the next blockchain. - Right. - Whatever, whatever thing is around the corner next. - So it's been fascinating. And I really appreciate the time that you spent with us today. What would you like to close with? What would you like to leave our audience with? - Well, first, I do want to say thank you again for the opportunity. This has been just an immensely valuable experience for me to be able to spend as time as deeply as I did with now. I think one of the things I'm really excited about for this organization is the degree of seriousness with what you're taking this new step. You know, from leadership down, we're spending time with lots of different teams and we're hearing that this theme of customer obsession is resonating. It does make some folks uncomfortable. And that's actually probably an indication that you're doing something meaningful. If everybody's on board with it and it doesn't cause any discomfort, you're actually not talking about significant change. And so I'm excited for the journey that you are on. I'm really excited to see where you go with this. And I think there's an opportunity to kind of set the model for what other organizations can follow as they seek their own transformation. So again, thank you so much. This has been a lot of fun, a great privilege to be able to be here with you and I'm just looking forward to see what you all do together. Terrific, Steven, thank you so much for sharing your insights. It's really been a great pleasure. And for our listeners, please stay tuned for more episodes of Knab Digital Next. (upbeat music) (upbeat music)