ZIFFPAGE TITLELittle Things Add Up

By Larry Dignan Print this article Print

Keep it simple; don't overanalyze; focus on results and stick with your plan; manage business first, technology second; keep teams small and focused, according to Cathy Tompkins, David Johns, Mitchell Gregory, Werner Vogels and Mike Chandler


Little Things Add Up-Big
Amazon.com's Werner Vogels believes that if a project team can eat more than two pizzas, it's too large.
By Kim S. Nash

Chief Technology Officer, Amazon.com

Lesson: Keep project management teams small and focused.

Werner Vogels helps the world's largest online retailer think small.

Vogels, named Amazon.com's chief technology officer in January, joined the retailer in September 2004 from Cornell University, where he was a computer research scientist. Vogels had been working with the company as one of the handful of academics helping Amazon create its information systems, most of them from the ground up.

Building these systems, which govern everything from customer recommendations to Amazon's distribution network to services for other retailers, could be a management nightmare, but the 11-year-old e-commerce giant thrives by breaking up big projects into small ones.

The results thus far have been impressive. Amazon, No. 225 in the Baseline 500 with Information Productivity of 55.5%, boasts 32 categories of merchandise, 50 million customers and $7 billion in sales last year. Amazon hawks books, clothes, cookware, dog collars, film processing, furniture, toys and technology services for retailers such as Borders and Marks & Spencer, an upscale British department store.

How did Amazon get so big? By thinking small. Small teams and tight meetings targeted to solve one or two problems, with challenges cut down to bite-size chunks. Where other retailers might ponder how to improve customer checkout, Amazon shaves layers off the concept and assigns them. One team might work on streamlining gift certificate redemption, another on credit card authorization. All projects take this approach at Amazon, the only pure online retailer in the Baseline 500.

Vogels upholds the Amazonian principle of "two-pizza teams." That is, technology teams working on a given project typically can be fed by no more than two pizzas—usually eight or fewer people. Small teams are fast, he says, and don't get bogged down in so-called administrivia. One recent two-pizza innovation is a feature that lets customers discover books that they might not know about. Rather than search for "baseball," or specific titles or authors, people can search for books that share uncommon phrases, such as "earned-run average."

Each group assigned to a particular business is completely responsible for it. Team members aren't considered database administrators or Java programmers or some other techie title. They're the people responsible for the customer checkout procedure or credit card verification process or search function.

The team scopes the fix, designs it, builds it, implements it and monitors its ongoing use. This way, technology programmers and architects get direct feedback from the business people who use their code or applications--in regular meetings and informal conversations. Simply put, programmers and business people are connected at the hip. A payoff: Amazon recently added text to its online checkout procedure to explain that customers must provide a credit card number to handle any charges over a gift certificate amount.

Those little victories matter, saysVogels, who likes to tell anecdotes about how one of Amazon's 9,000 employees did something good for a customer. In fact, these wins are what largely motivated Vogels to leave academia and "work on real systems that do real things for real people."

This article was originally published on 2005-10-19
Business Editor
Larry formerly served as the East Coast news editor and Finance Editor at CNET News.com. Prior to that, he was editor of Ziff Davis Inter@ctive Investor, which was, according to Barron's, a Top-10 financial site in the late 1990s. Larry has covered the technology and financial services industry since 1995, publishing articles in WallStreetWeek.com, Inter@ctive Week, The New York Times, and Financial Planning magazine. He's a graduate of the Columbia School of Journalism.
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