AWS Cloud Enterprise Strategy Blog

Why Digital Organizations Are Principles-Based

PrinciplesI was talking to the executive team at one of our enterprise customers recently when this connection suddenly hit me. Someone on the team had asked a question along the lines of “How can you organize the activities of autonomous teams so that you can trust them to work on the right things?” An easy answer might be that you have a product owner or someone in a similar role who tells the teams what to work on. But that answer isn’t quite satisfying to me (I’ve written a lot about the difficulties with product ownership models in my books, for example in The Art of Business Value). If that’s your model, you may have just shrunk the usual command-and-control model and placed it under a lieutenant instead of a general. You still have a management chain where decisions must be bubbled up to a designated decision maker—in this case, the product owner.

To gain the maximum speed, you need your autonomous teams to be able to make as many decisions as possible themselves. Yet you need to make sure that those decisions have a common organizing principle throughout the enterprise: you need a unity of effort. A great way to do that—perhaps the only way—is to agree beforehand on a common set of values or principles that the entire enterprise will use in its decision making. Senior leadership can be sure they’re getting the benefit of team autonomy, while still knowing that their objectives are being fulfilled. They have “control” over the enterprise in that they know their principles are used.

LighthouseAt Amazon, we have two techniques that help our autonomous teams make high-velocity decisions. The first is our set of fourteen Leadership Principles. All Amazon employees are familiar with the principles and apply them day to day in their work. The principles are discussed frequently and are used to make decisions and settle arguments. They’re carefully chosen to reflect an Amazonian way of thinking that unifies our activities. They include, for example, “Customer Obsession,” “Bias for Action,” “Earn Trust,” and “Have Backbone: Disagree and Commit.” They’re so deeply embedded in Amazon culture that we can trust autonomous teams to use them to guide their activities. Because teams and leaders both use these principles, their decisions are aligned.

A second technique we use is to guide team activities through tenets. Each team, and each new idea, is driven by a set of agreed-upon team tenets. These tenets reflect decisions the team has made to guide its future decisions. The blog that you are reading now has a set of tenets, including one along the lines of “To earn the trust of executive readers, our blog posts will be about strategic issues, and will have nothing that sounds like pushy marketing or sales-y fluff.” Tenets like these guide our writing and our editing, and our decisions about what guest posts to publish.

CompassIt’s not easy to put together a set of tenets or principles. In creating them, you’re deciding what sort of company or team you intend to be. You’re delegating a lot of your management authority to the principles, since they’ll guide your employees’ activities. On the other hand, you’re clarifying your company’s vision, incorporating the views of stakeholders, and communicating concisely things that are most important. They not only guide behavior but also frame the decisions a company needs to make to operate cohesively.

This brings me to a second reason why principles are so important to digital companies: they allow diverse groups to share an understanding of fundamental principles, based upon which they can take advantage of their diversity. As I’ve said in an earlier post, diversity is (or should be) a core principle of digital teaming. On the technical front, DevOps teams take advantage of diversity in skills: bringing people with various skill sets together on a single team will create synergies that multiply their impact. Analogously, the ability of teams to drive business results depends on diversity of backgrounds, experiences, and points of view. Diverse teams—in all senses of the word—are much better at innovation and at serving markets that are themselves diverse.

People with ideasIt is not solely a matter of mechanics—mix together diverse people and out comes effective performance—it’s a matter of binding their efforts together with a set of shared principles and values, and then using their diverse viewpoints to implement the values in ways that otherwise could not be achieved. The principles are an underlying equalizer.

A final reason why principles are so important in the digital world comes from the increasing interest from customers in knowing what exactly a company stands for. Not all leadership principles and tenets are concerned with social responsibility, but they do define a value system that’s embedded in the corporate culture. We’ve all seen organizations that believed they held one set of values, when the actual behavior of their employees demonstrated a very different set of values. But when the behavior of autonomous agents and teams is actually guided by agreed-upon principles and tenets, there’s an alignment between what the company preaches and what it practices. As a result, prospective employees can better understand what the company values, and the public has more transparency into the company’s “personality,” which might otherwise be hard to discern.

Amazon’s use of leadership principles and tenets is just an example of how digital organizations can use principles to support team autonomy. Many other born-digital companies have made their principles explicit as well. It makes sense: when autonomous teams drive their activities with shared principles, they can move faster and in better coordination, and deliver robust and innovative products to customers.

Twitter | LinkedIn | Blogs | Email


More on this topic

Guts, Part Three: Having Backbone – Disagreeing and Committing, Mark Schwartz

What are Your Cloud Transformation Principles?, Jonathan Allen

Bias for Action – Take the First Step, Ishit Vachhrajani

Tenets Provide Essential Guidance on Your Cloud Journey, Joe Chung

The Customer-centric CIO, Miriam McLemore

AWS Executive Insights


Mark Schwartz

Mark Schwartz

Mark Schwartz is an Enterprise Strategist at Amazon Web Services and the author of The Art of Business Value and A Seat at the Table: IT Leadership in the Age of Agility. Before joining AWS he was the CIO of US Citizenship and Immigration Service (part of the Department of Homeland Security), CIO of Intrax, and CEO of Auctiva. He has an MBA from Wharton, a BS in Computer Science from Yale, and an MA in Philosophy from Yale.