Amazon Web Services’ Phil Potloff on How To Innovate Like a Startup
Phil Potloff is an Evangelist with Amazon Web Services, spreading the word on cloud and innovation. He talks with Kylie Bonassi, Director, Brand Communication at ADAPT, about how any organisation can learn from startups on how to innovate.
A lot of it is about listening to the customer, and even being obsessed with the customer and what they want. Everything needs to be focussed on customer value.
Phil, thank you so much for joining us today at Digital Edge. It’s a pleasure having you here. To start with, I’d love to ask you – how do you kick-start an enterprise to innovate and experiment like a startup?
Well, if you look at the difference between enterprises and startups, they both typically start with a big vision, which is great. But the startup will then figure out how to execute small. They have finite resources, whereas enterprises typically match that big vision with big execution. And they want to spin up large projects and commit a lot of resources, which makes failure have a much bigger impact.
With startups, if something is not working, their hypothesis does not work out. They’re just cut bait. With enterprises, the key is to build capabilities that allow you not to have a lot of collateral damage from failed experiments. And so work on focusing on those capabilities, I used to give out a failure bonus to teams when I cancelled their project. That was to encourage them to want to experiment more. But I also didn’t pay it out until they had actually written a learning document on what the organisation could take away from the small investment we had made.
When it comes to AI and machine learning, where are you seeing tangible business outcomes?
It’s actually one of the top two things that our AWS customers want to figure out how to build into their own business strategy. When you think about the most common ways that it’s being adopted today, it’s in the prediction of customer preferences or the delivery of personalised experiences. And what happens after that is actually acceleration or quicker optimisation, new products and services that are being delivered through the continuous analysis of the data that’s being generated.
The challenge for most companies is that it’s not like building a regular customer application or enterprise application. It requires data scientists typically, and lots of new skill sets that the organisation typically hasn’t employed. One of the things we’re focused on is how we make it more accessible to more enterprises to actually embed these predictive personalisation capabilities. That’s why we offer services that provide the data scientist with a deep level of learning and experimentation and better customer experience.
More human experience?
How would you recommend that enterprises invest in culture?
What’s really interesting about culture is that many people would argue that in their companies, their culture is their most valuable asset. Ironically, it’s the one thing that money cannot buy.”
And if you look at the cultures that many consider to be thriving and growing, they have two characteristics.
One is that they’re adaptable. And the second is that they have this innate focus on something, whether it’s a purpose or the customer. And that’s actually how Amazon is organised, around this customer obsession. Everything we do in our organisation is focused on customer value. The way we invest in our culture is to develop mechanisms and processes that actually reinforce that, whether it’s working backwards from the customer. Whether the new idea has to start with a press release, from the customer perspective, or leadership principles that we use to hire, promote and make decisions about new ideas.
Can you talk to me more about the press release for the customer? What do you mean by that?
We call it the PR FAQ, because there’s also a frequently asked questions associated with it. But the press release is simply a one-page document at its core. It is written as if a new product was being announced. And it’s written without technical jargon or inside acronyms and is expected to be understood by a customer reading it. And that’s how we start and socialise ideas.
The thing I really value about it is that whether you’re the CEO of the company or a new newly hired software development engineer, nobody circumvents the process. If you have a new idea, you’ll say, why don’t you write a press release? And let’s get started from there. And again, the key is that it’s rooted in a customer problem or opportunity, and a real benefit.
Within a company like Amazon, how do you foster and harness innovation?
What’s really interesting is that it goes back to what we call mechanisms. Some people call them processes, but there are these ways that we reinforce the aspects of our culture and learning that we think are important. And so the working backwards process is a key one, which we use in our roadmaps.
95% of what we build for customers come straight from what the customer is telling us.”
We learned that from meeting with customers. I personally meet with about 150 customers a year, one on one. Even though we’re data-driven, and use data to make a lot of our decisions, customer anecdotes and what they’re telling us is really the key driver and what we want to do.