To build a company is one thing, to build a company that grows as rapidly and successfully as Amazon.com Inc. (AMZN, Financial) takes “extraordinary” people. What Amazon founder and leader Jeff Bezos means by “extraordinary” is people who are both very capable and extremely committed to the company.
But he doesn’t stop with just finding and hiring the right people. In his 1998 letter to shareholders, he explained: “Setting the bar high in our approach to hiring has been, and will continue to be, the single most important element of Amazon.com’s success.”
Think in terms of continuous improvement, as developed in initiatives such as Lean and Six Sigma. Bezos believes each new hire presents an opportunity to raise the company’s effectiveness or the corporate IQ. To that end, the Amazon managers hiring non-warehouse employees must ask themselves three questions about the candidate they are considering:
- Will you admire this person? As an article in Mashable explains, this question narrows the field by focusing only people who could be an example to others, and those from whom others in the company could learn.
- Will this person raise the average level of effectiveness of the group they’re entering? Bezos realizes companies tend to stagnate as they grow, while he wants the company to do the opposite. So, as he says in the 1998 letter, the bar has to "continuously go up.” Hiring managers need to visualize the company in five years and say to themselves that they were fortunate to have been hired before the standards became higher.
- Along what dimension might this person be a superstar? The letter speaks of surprising skills, interests and perspectives that enrich the workplace. As an example, Bezos cites one member of staff who was a National Spelling Bee champion, which may not figure prominently in her day-to-day work, but does make working at Amazon more fun (something not normally associated with the Amazon culture).
These questions apply only to non-warehouse staff, who represent about 25% of Amazon’s staffing. Candidates for management and other positions must expect an exhausting round of interviews; Business Insider reports they will go through five interviews that each consume two to three hours of the candidate’s time—that’s assuming they don’t get vetoed partway through. A quick search on Amazon, by the way, produced several how-to books on getting in the Amazon door.
The hiring staff who can veto candidates are managers called “bar raisers.” They must be satisfied the potential new hire would increase the collective IQ and productivity of the Amazon talent pool. The bar raisers themselves are highly committed; they volunteer for the positions, which may require an additional 20 to 30 hours a week of their time.
But the company has found at least one shortcut in its hiring process: it recruits many military veterans. John Rossman, a former Amazon executive and author of “The Amazon Way: 14 Leadership Principles Behind the World’s Most Disruptive Company,” says the company wasn’t just being patriotic when it began the mass hiring of ex-military personnel. It had been impressed by the logistical know-how and bias for action demonstrated by veterans.
Rossman also points out Amazon has a very elitist culture. Bezos has told senior executives to focus on positively reinforcing the “A+” managers. This is backed by the stock options structure. Rossman says the “vast majority” of options go to A-plus employees, while B and C-rated managers received the “crumbs.” With a heavy emphasis on compensation through stock options rather than salaries, the company sends a message to all staff.
How does the hiring process work? A Business 2 Community article explains that five or six bar raisers are assigned to each candidate, and they each interview the candidate on their own. After this set of interviews, the bar raisers write detailed assessments and then get together with each other to determine if the candidate will be a good fit.
Any one of the bar raisers can veto the candidate. Bezos has been quoted as saying, “I'd rather interview 50 people and not hire anyone than hire the wrong person.”
Setting the bar higher does not eliminate people who have previously failed. Bezos says failure isn’t optional when you are innovating; in his 2013 letter he wrote, “Failure comes part and parcel with invention.” Perhaps that explains why he and Amazon chose the leaders of a dot-com flare-out (Webvan) to head the grocery delivery service AmazonFresh. At the I Done This blog, they say many conventionally successful people have not taken risks, as innovators have.
A few frequently quoted quotations from Bezos, on hiring:
- “It's not easy to work here (when I interview people I tell them, 'You can work long, hard, or smart, but at Amazon.com you can't choose two out of three')."
- “Every time we hire someone, he or she should raise the bar for the next hire, so that the overall talent pool is always improving.”
- “Cultures aren't so much planned as they evolve from that early set of people.”
During calendar 1998, Amazon grew from 600 to more than 2,100 employees, an amazing growth rate for any company. While not all of the 1,500 new employees would have gone through the rigorous management screening process, a significant number would have, and there was no let-up in standards.
Author John Rossman, who joined Amazon in 2002 and went on to become a bar raiser himself at one point, said he had to “endure” 23 interviews over the course of six weeks before he was first hired. He reveals Amazon nearly went broke in 2000: revenues were low, expenses were high and the stock price plunged to practically nothing. That meant prospective employees could not be paid what they were worth, so taking a job at Amazon was tantamount to a pay cut. Nevertheless, Bezos and senior staff maintained their hiring standards.
Hiring at Amazon was and is more than just finding people who can fill vacant positions. It is a whole ecosystem of its own, designed not only to fill positions, but to increase the brain power, capabilities and productivity of the company.
By refusing to compromise on his standards, Bezos has sent a message internally and externally that employment is more of a profound mission than just a job. Going to work at Amazon isn’t something you do just for yourself, it’s a deep commitment to the company and its vision.
And, undoubtedly, that focus on using hiring to continuously grow the corporate IQ and productivity has played a primary role in Amazon's great and ongoing success. In doing so, Jeff Bezos grew the company’s global employee base to more than 560,000 workers, according to the 2018 letter.
Disclosure: I do not own shares in any companies listed, and do not expect to buy any in the next 72 hours.
