How to Position Your Organization for the Future by Building a More Resilient Business

Miriam McLemore (00:22):
One of the questions we often get from our customers is, how to be more resilient and what are approaches that they can take? Many organizations feel like they are experiencing change fatigue. From the pandemic to other political instability to economic challenges. It's been a bit of a rocky road for the last several years, and employees are often asking their leadership, can we return to the good old days?

I want to be back where life felt comfortable. And we don't believe that that's the future that we are heading to. It's an exciting future, it's a good future, but it is a future that is going to require change and constant change. So how do you embrace that is the question we often get asked.

Phil Le-Brun:
And I think firstly, you have to acknowledge change is a constant. The reason we go through these big — digital transformation, data transformation or name your transformation flavor — is because we haven't incrementally improved against some big visions. We end up undertaking these big projects and we know they're very onerous on employees. But to your point, if you look at COVID, how many times did we hear this phrase, the new normal?

How did that work out? We work with a gentleman, Peter Hinssen, who wrote the book The New Normal, and people say, oh, he capitalizing on COVID. He wrote it in 2010! He was saying, the reality is, there is a “never normal” now where we need individuals to be able to make those incremental steps forward and improvements in their organization against that big vision because that is a lot more natural for us human beings to be able to absorb that change.

Tom Godden:
And I think it's too easy for us as leaders to not bring the staff along with you, your people along. And I used to reflect upon it. I was like, well, I'm protecting them because right now it's all FUD (fear, uncertainty, doubt) and unknown and all this stuff. And you’ve got to have a little bit of that. Don't expose them to all the raw craziness going on, but making sure that they understand what their role is in it and how you're going to support them and why we might be going through this transformational change and what's that end point in it?

I think all too often that information is not brought farther down into the organization and that just creates more churn and more churn creates churn. Then you look back and go, gosh, we're struggling. Well, yeah, you own it. You deserve it.

Phil Le-Brun:
Well, and then us as leaders have spent six months talking about this change. We get our head around it, we announce it to everyone, and we wonder why they react the way they do. And then you hear phrases like, "People are resisting change." No, they're not. People resist being changed. They go through that grieving cycle when they're told things need to change. So, you bring them along, it makes it a lot less psychologically traumatic for them.

Miriam McLemore:
And tell them why. I think now more than ever, companies having a clear purpose and sharing that with their employees and where they're headed and that it's not a destination we're going to get to and then we can sit back again. It's going to be a constant journey. The technology is changing, the business landscape is changing, and we've got to get good at listening to what's happening in the world, digesting it and creating a strategy that's productive for that organization.

Tom Godden:
And all too often that strategy is ill-equipped. We're taking the learnings that we have from the industrial revolution and applying to them to a digital transformative society going, why aren't they working? Well, they're not working because they were rooted in structures and management techniques that are no longer applicable. And so, yeah, of course our people are struggling with some of this change. So, we really need to rethink how we approach and operate in this. It's not the way it used to be. The new normal is a different normal from where we were previously.

Phil Le-Brun:
Well, I think we need to be clear too on what does resilience mean. You can apply that on multiple levels. The technologists, we obviously think of the resilience of the technology. That's why we have all used the cloud in the past because it's one thing... We could focus on the things that differentiated us, not the underlying infrastructure, but then there's also the personal resilience. You as a leader being able to absorb this change and being focused on that purpose.

You were talking about knowing you are getting to a better place. And then there's the organizational resilience. This ability to try something if it doesn't work, pivot. I think if you look at the facts, those organizations who do well here can recover, can absorb a crisis quicker, they can recover from it quicker, and they recover with better results. And often that actually leads to competitive advantage. Those organizations that do well during times of turbulence are the ones that are building a lot of their market value versus waiting for things to calm down and then we'll start innovating.

Miriam McLemore:
And a lot of that is agility, positioning your organization, your team, giving them the skills to pivot and the authority to pivot because often they may know that they should turn, but all the mechanisms, all the processes force them down the same path. Lightning that up, moving decision-making down in the organization so people can pivot as needed. I'm a huge sports fan. Your best athletes are the agile guys and women that can pivot and take advantage of a gap in football or an opening in basketball. They go through the hole, but they got to have the skills, ability and empowerment to go.

Tom Godden:
Yeah, innovation's an interesting thing. Just because you establish a corporate goal that says we're going to be more innovative. Yeah. How's that going? We said we were going to go, please innovate. It's like, okay, thank you for the offer to innovate. But there's so much more that goes around that ecosystem, as you were just mentioning, of that small agile team conducting a lot of experiments, but being empowered to be able to innovate.

They see what the right solution is, but they're not allowed to do anything with it. I talk all the time about people want to democratize the data. I'm like, don't bother unless you're prepared to democratize the decision-making based upon the data also. You're just going to frustrate the teams because now they're going to know what the answer is, can't do anything about it. If you don't build that culture then you're not going to get to that innovative team, and therefore you're not going to be able to pivot and weave your way through agilely for that kind of transformation to be resilient.

Phil Le-Brun:
And to me, a lot of this comes back to, we talk about resilience, we talk about agility two sides of the same coin is how do you create that psychological safety in an organization where if you are an employee at the coalface of the organization, you are comfortable taking the decision. It may not be right, but if you figure out it's not right, you're prepared to pivot rather than look at that problem for months and months and months trying to find the perfect answer.

But I think it applies to leaders too. It's often not uncommon for a leader to feel uncomfortable letting go and finding that balance where everyone's comfortable, where you've got a culture where you trust people. How are you hiring people? How are you promoting them? How are you looking at their performance? All of that builds that foundation of psychological security, which then enables you to be resilient and agile.

Miriam McLemore:
And that does mean embracing failure. If I'm going to actually invent, if I'm actually going to try something new, it's got to be okay from a psychological security standpoint for it not to work out so I can pivot and go a different direction. I think that is a barrier for many organizations. They do not believe failure is an option.

Tom Godden:
Especially in highly regulated spaces. And one hand I can understand it, but I think that there are ways to accomplish both. It doesn't have to be an either/or type of situation. That's why I always talk with companies a lot about be clear on the why you're doing this. That should be your first governing point. Am I making progress towards that objective for the reason why we're doing this? And then we rely on our leadership principles here at Amazon, adopt ours, love ours if you want, but what's important about ours is that we apply them and we use them.

It is the way to empower that individual to operate and to have that license to execute, provided you're doing it in pursuit of the why, in pursuit of the outcome, following the principles. We may not love the failure. Trust me, we don't love failing like anyone else, but we're okay with it. We realize it's the cost of innovating and experimenting and provided you're doing those, that's that safe zone for people to operate.

Phil Le-Brun:
And I'm not even too sure it's failure. If you're experimenting, you're going to learn something from the experiment. You take that learning and you pivot and you scale it.

Tom Godden:
Yeah, it's learning.

Phil Le-Brun (09:42):
What fascinates me is, we've been through COVID where a lot of companies understood they could pivot quickly. They did things in 48 hours that previously they spent three years talking about-

Tom Godden:
And then they forgot it.

Phil Le-Brun:
And they forgot it. 50% of companies say they're not prepared for the next crisis. Most organizations, most of the C-suites are saying being resilient and agile is really key, but most aren't. I mean, what's going on?

Tom Godden:
Well, it's that constraint again. So COVID gave them the constraints and said, you got to solve this problem in 48 hours and you can do amazing things. When you don't have those constraints, human nature kicks in skepticism, fear of the unknown, all those things that are understandable. That doesn't mean they're okay, but you can completely understand them. They all kick in. I'm not suggesting that we have another pandemic to get the engines going on it, but constraints are a powerful thing.

Miriam McLemore:
I think another thing that organizations are starting to embrace that will help is diversity. If you can really drive diversity, and actually at AWS, we prioritize inclusion first—instead of DEI—inclusion, diversity and equity, because everyone needs to feel like they have the right to share their opinion, drive the company in the right direction, leverage their knowledge. I think that does create more resiliency in an organization when you're not all group thinking because you have diversity of thought, of opinion, of background and approach.

Tom Godden:
Or waiting on the HIPPO—the highest paid person's opinion—to weigh in on the subject and guide all the people back to the industrial revolution. That's what we saw, where people were less skilled and the managers in the organization probably understood how things worked better. That is not an agile, empowered organization that's going to be resilient. You’ve got to get past that. That inclusion is an important part.

Phil Le-Brun (11:47)
We've talked a lot about the people, the organization, leadership, their role in setting clear direction, the culture we need to be a resilient organization. The reason it's so important with technologists, what about the technology? What differentiates organizations that are resilient from a technical perspective?

Miriam McLemore:
Having that stable foundation is really job zero, especially because it creates an environment of security and resiliency. Something you can rely on and cloud is the best solution in the world of evolving technology to enable and empower an organization, especially hopefully a growth organization that is going to invent new capabilities. They got to get their foundation right.

A lot of that is putting the right technology in place, leveraging cloud and back to get a data strategy that brings your data together and use solutions to house that data that make it available to your organization. We talked earlier about don't democratize data, don't do all this data work and then lock it up and lock up the decision-making. So that to me is the beginning. Get your foundation right.

Tom Godden:
And with the cloud, I know there's a shared responsibility model, but at least I finally felt as an executive that I could manage my part of the responsibility where before, all of the abilities—availability, reliability, stability, security—I’m like, oh my gosh. I felt like that's all I could focus my time on. And you want me to innovate and be transformative for the rest of the organization. I don't have time for that. I'm busy making sure everything runs.

And now with the cloud and being able to rely on the region type of model, the availability zone, the fact that we've done this for longer than anyone at larger scale than anyone and able to provide that backbone for the customers really allows them then to put their effort and their attention still under the shared responsibility model, but now manageable, to be able to focus and do some of those other things.

Phil Le-Brun:
Just look back, how much time did we all spend thinking about have we got too much capacity?

Tom Godden:
Yeah. Did it really work?

Phil Le-Brun:
Well, of course it did on paper.

Miriam McLemore:
Peak season is coming.

Phil Le-Brun:
Yeah, exactly. Who are you going to annoy? The CFO because you've got too much capacity or the customers because you don't have enough. Those experiments we were talking about earlier on, you find that brilliant breakthrough experiment. It's just like, stop the horses. We just need six months to get the capacity we need and the licenses and the partners. And now, I mean, I look back and look at-

Tom Godden:
Oh, and it'll be reliable too when we build it.

Phil Le-Brun:
Yeah. I look back when I was at McDonald's, I think it took about five minutes to deploy a delivery capability globally because we could use the AWS infrastructure to your point 31 regions, 99 availability zones. We decided where to put it. We didn't have to worry about any of that setup, and we could scale up, scale down with demand.

Tom Godden:
And as our organization expanded into Europe, it was easy for us to take all that same infrastructure in that code, create another instance within the Frankfurt region, and be able to scale that up for us rapidly as we were going through rapid growth at Foundation Medicine. It never would've been able to do that before.

Phil Le-Brun:
But Tom, this is really important. This is why I need my own data center, and it's just we all hear that, but it's a little bit like saying, electricity is so important to my business. I'm going to build my own power station.

Miriam McLemore:
And I need it nearby so I can go touch it, even though it might be in a hurricane zone. Climate change and these locations of owned data centers…truly frightening. And having resiliency means having that scale.

Phil Le-Brun:
Well, I think we encourage executives to deep dive into their own business continuity and disaster recovery processes because as you said on paper, it probably looks good. Yeah, we've got a spare data center. Where is it? In the same location as the other data center. With one communication pipe, and we got some spares off eBay. The reality is you could spend all of your time, all your money putting in place the same infrastructure and not be able to innovate for your business. What makes you, you? What makes your business special? Spend your time there and then stand, as Isaac Newton said, "Stand on the shoulder of giants." Use those who can provide that infrastructure so you can focus on what matters.

Tom Godden (16:30)
Well, part of that shoulder of giants is not just all the availability, reliability, but sustainability. So being able to bring the scale and the discipline that AWS has, not just for energy consumption, for carbon footprint with low carbon concrete that these things are being built out of, but water stewardship to be water positive in these regions.

Water is vital to a data center to be able to cool it and to be able to bring that benefit to customers so they can benefit by just utilizing these services and be able to achieve sustainability objectives within their own organizations. Truly transformative. Rising tide lifts all boats.

Miriam McLemore:
Well, that and security. At one point in my previous organization, we were writing our own security code. That's a bad idea. Leveraging the knowledge and capabilities that we have with the breadth of customers on a global scale. And the fact that for us, security is job zero. That also took a huge percentage of our time. If you had a challenge, a breach, an attack. That is a game changer.

Phil Le-Brun:
Well, and I think companies can take some inspiration from organizations like Nasdaq, Capital One, Moderna, AstraZeneca, all highly regulated industries that have embraced the cloud because it can enable them to do the things they need to do quicker and securely and reliably. I don't know if you're both project managers with the old project management triangle, you can have it fast or you can have it functional or you can have quality…pick one, maybe two if you're lucky. I think we're in a point now where you can actually have it all, but you have to change the way you operate to embrace a new way of working with the cloud.

Miriam McLemore (18:27):
One of the things that we do at AWS is something called executive visioning. I was just participating in one with a customer that was looking to open the minds of their leadership team. They are so busy and their business is growing, but they are just doing what's right in front of them. They are blocking and tackling, and they have the opportunity and they have the engineering mindset that can really disrupt their industry, but they're struggling to just get out of their own way.

What they asked of us, and what we did in this executive visioning session, was talk about thinking big. How do you really understand the enduring needs of your customers? And put your customer first and look at opportunities where they could reinvent their industry and truly be a disruptor versus…keep their head down, keep working hard, but potentially get disrupted.

Phil Le-Brun:
I had a similar experience. There was an interesting study that was published three, four months ago, and it said, if you pick 10 employees in a company and said to them, how are you doing? Eight of them would say the same thing. “Oh, so busy.” And it's almost like it's a badge of pride or a productivity measure now.

Tom Godden:
The other two were too busy to answer.

Phil Le-Brun:
Yeah, very likely. They never got back to me. But it's creating that space where you take people off site and ask the basic questions.

Tom Godden:
Give them permission to do it almost.

Phil Le-Brun:
Well, absolutely. But there's some basic questions you need to ask. Are we actually all aligned around what the goals are? We often talk about, are you a leadership team or are you team of leaders? Do you have this great highfalutin’ vision to be the most sustainable people-centric company on the planet then everyone goes back to their function and says, this is what it means for us or are you actually talking at this level about what does that mean? What are those big goals that's going to align us?

And then the other exercise I found really powerful was developing tenets. How are we as a leadership team going to make decisions? Because we all make decisions and often we're not explicit about how we're looking at them. So are we optimizing for speed, for instance? Are we optimizing for cost?

Miriam McLemore:
Do we agree?

Phil Le-Brun:
Do we actually agree? Having those conversations, creating that space for the leadership teams to have those conversations. They feel soft, but they're such critical foundations.

Miriam McLemore:
Well, and then it is something that you can share with the organization on how you're making decisions because they think some magic's happening. I don't know what you guys are doing, but you just pull something out of the hat and go, that's the decision without the why. Tenets certainly also explain to your team the parameters in which they are deciding.

Tom Godden:
We just did hear a little bit about tenets or principles at the leadership level, and you should have those. But you're going to have good principles at the department level, at the team level as well. What does good data look like? What do we call a good data integration? It's not done till it's automated. Okay, that's a great tenet. Let's have that. Let's establish that.

Don't just be focused at the top, you should, but look you can build those tenets to help you operate, and that helps create that agility. And how do we create autonomy without anarchy? You use the tenets to do that.

Phil Le-Brun:
Well, we talked earlier about purpose. I don't know about you, but I suspect you are very similar in terms of…you don't just want to go into work, do a job description, go home. You're fulfilling your job req. You actually want to feel like you're making a difference. What is the purpose of your department or your organization? Not one of these Dilbert-esque phrases, but just basic English.

(Amazon’s) purpose is to be earth's most customer-centric company. That's why our team exists to help our customers succeed. What is our customer's purpose? Is it clear? Does everyone know? If you pick 10 people, would they all know? Data says they probably wouldn't know. Nine out of 10 wouldn't know what their company's purpose or priorities are.

Tom Godden:
Well, and getting them to be able to work towards that outcome is part of that agility. Again, what is their purpose? Because we're trying to improve customer satisfaction by 10%. We're trying to reduce customer turnover by 5%, and we're going to make these changes in the mobile app because we believe it'll delight customers and do that. And then when they're able to accomplish that—that sense of ownership, of accomplishment, of seeing those tangible results as opposed to, I came in and wrote another thousand lines of code today. I'll be back in the salt mine tomorrow. I'd like a thousand and one lines of code tomorrow. No. Give them that sense of ownership, mastery, purpose of what they're doing with those outcomes. So crucial and important.

Phil Le-Brun:
Well, it's a NASA story. When JFK went to NASA in 1962 and he bumped into the janitor and said, "What do you do?" In many organizations that janitor would've said, "I cleaned up where the boss tells me to clean up." The janitor said, "I'm here to put man on the moon." I mean, how inspiring is that? That's what you want every single employee to feel.

Miriam McLemore:
Yeah, because it's unifying versus I'm on this team and you're on that team. It may be bad that we call them teams because it does promote…we're on separate teams, therefore, in competition…and having something that brings the teams together to achieve a destination.

Phil Le-Brun:
You're so right. It's that poisonous language that sneaks into organizations like, “those people in the headquarters don't understand what I do” or my worst favorite is, “the business and IT.” You create these silos in your own organization. Simple things people do without thinking about it.

Miriam McLemore:
And the language matters. As I often say, coming to Amazon, we have a common language regardless of whether where I travel around the world, we have common language. It is truly powerful. And that common mission statement, and that's something in these executive visioning sessions that we help customers stop being a team of leaders, become a leadership team, or at least understand why they're not a leadership team. And draft those tenets and vision and purpose statements so that they can go out and change the world.