How Amazon Uses Mechanisms to Hone Efficiency and Execution. Volume Two: The WBR
Welcome to my second blog post, where I’ll share my experiences as an executive at Amazon. In this series, we will discuss how Amazon manages its diverse lines of business, such as Amazon Web Services(AWS) and Amazon.com. In the first post, “How Amazon Uses Mechanisms to Hone Efficiency and Execution,” we talked about Amazons working backward mechanism for product ideation and iteration. Today's blog is about Amazon's weekly mechanism for running its many businesses. The WBR or weekly business review. The WBR occurs weekly and includes senior leadership, directors, managers, and executives from relevant departments or teams. The main focus of the WBR is on variance and exceptions rather than the expected. The WBR mainly concentrates on data and metrics, performance evaluation, goal setting and strategy, problem-solving and action planning, communication and accountability, and open communication.
Amazon conducts two weekly reviews: the Weekly Business Review (WBR) and the Weekly Operation Review (OPR). The WBR concentrates on business-related matters, whereas the OPR assesses and improves various operational aspects, such as technical performance and customer concerns.
Weekly Business Reviews(WBRs) are conducted within the company to discuss and review key performance indicators (KPIs), goals, strategies, and challenges. They occur weekly and involve senior leadership, directors, managers, and executives from relevant departments or teams. Each manager at Amazon is responsible for conducting a WBR with their team and reporting key takeaways to their leadership’s WBR, which then goes to the Vice Presidents’ WBR.
Although Amazon also has monthly and quarterly reviews, I have found that weekly reviews are more effective in staying closely connected to the business, especially in the world of continuously delivered software as a service (SaaS). The Weekly Business Review (WBR) is a cadence designed to ensure that managers are informed about issues as soon as possible and that there is continuity from one WBR meeting to the next. Amazon’s WBRs have implemented many standard best practices over time, such as consistent formatting of metrics. This consistency allows leaders to examine the same data set weekly in the same format, order, and holistic business perspective. Over time, this familiarity leads to a shared ability to identify trends and pinpoint anomalies, making the WBR more efficient.
During WBR meetings, the focus is on variances and exceptions rather than on the expected. Business owners are responsible for owning metrics and explaining variances while the finance team certifies results. Business owners should know their metrics inside and out, with an explanation or preliminary investigation results by the time they attend the top-level WBR. They should prepare ahead of time, and if they are unsure of the causes of an anomaly, they should state that they are still analyzing the data. Guessing or making things up will result in criticism.
The Five WBR Focus Areas
A planned agenda is followed during each Weekly BusinessReview (WBR) to ensure efficient and effective discussions. The agenda covers critical performance metrics review, current project updates, challenges identification, and potential solutions discussions. This approach helps keep the conversations on track. The WBRs mainly focus on five areas.
1. Data and Metrics: Before each Weekly Business Review(WBR), participants collect data and metrics about their areas of responsibility. These metrics are critical for evaluating performance, tracking progress, and pinpointing improvement areas. Amazon prioritizes data-driven decision-making; therefore WBRs heavily utilize quantitative insights.
2. Performance Evaluation: At the WBR, participants use collected data to review their team or business unit’s performance. They assess whether their actual performance matches their set targets and objectives. This evaluation includes analyzing trends, identifying patterns, and investigating significant deviations.
3. Goal Setting and Strategy: WBRs are a platform for setting goals, refining strategies, and aligning priorities. Through performance evaluations, participants gain insights to adjust existing plans. It’s a chance to ensure the organization works towards common objectives.
5. Problem-Solving and Action Planning: During the WBR, participants engage in collaborative problem-solving discussions if any challenges or issues arise. They brainstorm potential solutions, allocate resources, and determine action plans to address the identified problems. This approach fosters cross-functional coordination and encourages proactive decision-making.
5. Communication and Accountability: WBRs promote transparency and accountability within Amazon. These meetings facilitate open communication, allowing participants to share updates, challenges, and successes. Additionally, they help establish accountability by tracking progress towards set goals and holding individuals and teams responsible for their commitments.
Tips for preparing for your WBR.
In WBR meetings, the main aim is to discuss deviations and handle issues that arise rather than sticking to the original plan. These meetings are significant and time-bound. Hence, it’s crucial to be well-prepared. To keep the meeting at the right altitude, I always found the following tenets to be important as I coached my teams to with their WBR content:
- Know your business: As a business owner, you need to clearly understand your metrics and be able to explain them effectively. Although the finance team verifies financial data, you must present each metric. This entails being knowledgeable about your metrics and ready to address any anomalies during crucial meetings, such as the top-level WBR. It is anticipated that you come prepared with an explanation or, at the very least, the initial findings of an investigation.
- Prepare It’s important for business owners to finish their work before the WBR to avoid any negative consequences. Suppose they are unsure about the reasons for an anomaly. In that case, it’s better to state that they are still analyzing the data and will provide an update later rather than making unfounded guesses which could lead to negative feedback.
- Tactics trump Strategy: During WBR time, operational and strategic discussions are treated differently. This time is valuable and dedicated to tactical, working meetings rather than strategic ones. Therefore, this session does not discuss new strategies, product updates, and upcoming product releases.
- Be Civil: It’s important to avoid publicly criticizing business owners. The first thing I learned was that at Amazon, a successful environment is one where people feel comfortable discussing mistakes or issues in their area without fear of intimidation.
Tips for effectively presenting data metrics.
As your business grows, you may or may not have metrics in place to track progress and tell a story. However, it’s important to set revenue and user growth goals and to regularly assess your progress every week. AtAmazon, regardless of the meeting, four tenets always stood out to me in how we handled data discussions:
1. Consistent Graphs: Display weekly and monthly metrics on a single graph. Ideally shows trailing six weeks and trailing 12 months.
2. Watch for Year-over-Year Trends: For example, it’s common for some teams to graph actual monthly revenue against both planned revenue and prior year revenue. This can give the illusion that you are beating the plan and growing year over year; Until you add YOY growth rates to a secondary Y-axis. Without the YOY dotted line, you might not notice the current and projected year trends slowly converging on the first graph. With the added YOY growth rate, however, you can easily see that YOY growth has decelerated 67% since January, with no signs of flattening out.
3. Output metrics show results; input metrics provide guidance: Simply looking at output metrics is insufficient as they do not provide actionable insights. To better understand the factors contributing to a deceleration in YOY growth, it is important to examine input metrics such as new customers and new and existing customer revenue. Doing so lets you detect any warning signs earlier and take appropriate action.
4. Combine data with anecdotes to tell the whole story: A notable feature of Amazon’s WBR deck is its use of anecdotes. To ensure these anecdotes are heard, Amazon has implemented the Voice of the Customer program. The customer service department collects and summarizes customer feedback regularly and presents it during the WBR meetings. However, not every feedback is presented weekly; the CS department can choose which feedback to present. The stories shared during the WBR are sometimes uncomfortable because they highlight areas where customers are dissatisfied. Nonetheless, they offer valuable learning experiences and opportunities for improvement.
Of course, ex-employees were not permitted to take any Amazon content with them, when we left, but if you would like to download the WBR template, I have built a simple one here. I have also built a simple guide to help you roll the WBR mechanism out in our organization. You can download it from here. My stint at Amazon taught me the significance of delving into the core aspects of my business and product performance on a weekly, if not daily, basis.Despite my 23 years of experience in the high-tech industry, I realized there were still valuable lessons to be learned. It’s true what they say — new experiences always enrich our knowledge and skills.
If you would like to engage my company to help you with any of your mechanisms for building an scaling your own product organization feel to send us a note!