They’re two of the biggest and most influential companies on the planet, but in many ways Amazon and Google are polar opposites when it comes to company culture and business strategy.
Richard Russell spent more than eight years collectively at both Google and Amazon before founding his own company, where he teaches others how to apply the principles and tools he’s learned to their own businesses.
I sat down recently with Russell to demystify some of the differences between his former employers, and to highlight some of the key lessons he now shares with his clients.
Hiring
According to Russell, Google’s basic interview question is: “How smart are you?”
“Google hires smart people, gives them perks to make them happy, and then provides them with freedom (and hard problems) in the hope that wonderful things will happen,” Russell told me. “Overall, they tend to get hard workers, but it’s not the primary goal. This means that at Google, most people err on the side of doing or saying things to show how smart they are.”
In contrast, Amazon’s basic interview question is: “What have you done?”
“Amazon hires people who get a lot done, applies structured pressure and guidance, and gives them hard problems (and freedom) in the hope that lots of things will get done,” explains Russell. “Overall, they tend to get a lot of smart people, but it’s not the primary goal. This means that at Amazon, most people err on the side of getting things done and don’t talk about it that much.”
Both employers attract consistently great candidates–high salaries, stock prices, and success tend to do that. But Google appeals to potential hires by being a great place to work, while Amazon attracts by creating an environment where people who like to get a lot done get even more done.
“If I were to be hiring, I’d follow Amazon’s method and hire ex-Amazonians over Google’s, by a significant margin. Not that Googlers are bad, just that I’d prefer Amazonians,” says Russell.
“But if I were to be selecting a place to work, I’d choose to work at Google over Amazon,” he continues, “because it’s a much nicer place to work.”
And if his goal was to grow his capabilities and career?
“I’d choose Amazon despite the discomfort–or because of it,” says Russell.
Perks, Profit, and Culture
“Google likes to think of itself as frugal, but it’s not,” says Russell. “But it doesn’t matter because of Google’s huge margins, which come in at over 30 percent.”
In contrast, Amazon has much smaller margins, between 5 and 10 percent. “They’re frugal, and it does matter,” says Russell. “But sometimes they take it too far needlessly.”
You won’t travel first class at any seniority in either company, says Russell, “though you’re more likely to get premium economy or business at Google than Amazon at every seniority.”
He adds: “Google buys great food for everyone, which is a good perk. And yet it actually makes business sense, because people don’t need to waste time preparing or going out to get food. Instead, they tend to socialize and eat together–it looks costly and inefficient, but it’s a great use of funds, and is much, much cheaper than it looks.”
In contrast, Amazon doesn’t provide food for employees, but Russell sees that as false economy–as staff end up wasting time getting lunches outside.
“But it does impress upon employees that Amazon is trying to cut costs,” says Russell, “which tends to reinforce that behavior in other aspects of business.”
When it comes to people processes, Russell describes Google’s as relatively ad hoc, which tends to create cultural echo chambers with hiring and promotions. There’s little feedback given to interviewers, so those interviewers improve slowly.
Amazon, on the other hand, uses a very structured and reliable hiring method, and applies this same rigor to firing, promotion, and rewards. Hiring involves four to eight interviewers who use behavioral questions focused on Amazon’s leadership principles, and is followed by a debrief–which helps interviewers improve their skills. Similar discussion happens with promotion reviews, which forces all managers to have some discipline and common understanding of how to assess people.
“This helps Amazon maintain a codified culture through its people processes,” says Russell. “Google would benefit from adopting Amazon’s people processes and adapting them to their culture.”
Management Structure
Russell describes Google as a “centralized command-and-control product and engineering organization,” with a “parallel yet somewhat independent business/sales organization.”
He continues, “Google is led by engineers or product people–at least, that’s their focus–and sales serve their needs to monetize the products.”
Amazon’s structure, on the other hand, is driven by business need.
“Leaders aren’t necessarily engineers or product or sales people,” explains Russell. “Yet because they dive deep into the technology, they understand the technology, too.”
According to Russell, Google can get big changes done faster when they’re decided from on high because the technology is consciously organized and there’s usually one person doing each thing, with not much overlap, and it’s relatively easy to navigate.
“But Google is much less agile when it comes to responding to changes in markets or learnings, as decisions are centralized and made further up the chain of command,” Russell continues. “In a sense, Google operates like a giant government with central planning.”
In contrast, Amazon can get small changes done much faster, as decision-making is pushed downward as far as it can go.
“But this can lead to duplication,” says Russell. “And major centralized changes take a long time to get done, as so many people need to take action–and it’s also difficult to mandate. In a sense, Amazon operates like a capitalist economy with no central planning.”
Russell says the respective management structures also affect how both companies set goals.
Google universally uses objectives and key results (OKRs), a goal-setting framework for defining and tracking objectives and their outcomes, because it’s relatively easy to see what each team is working on. Amazon’s goals process is relatively well-developed, but not nearly as structured or transparent as Google’s.
“Amazon’s goal-setting process is much harder to navigate and coordinate,” Russell says. “They would benefit from adopting OKRs widely, especially when it comes to transparency.”
Management Style and Processes
From Russell’s perspective, Amazon’s management style and processes are often more transferable to other companies than Google’s, because that style is more systematic and structured, and the processes more mature. Not to mention that few companies can match Google’s high profit margins.
“Take innovation, for example,” says Russell. “Amazon is very disciplined and thorough when coming up with new ideas, while Google just tries things out and hopes they work. Google can afford to do that, and it works out overall–but Google’s approach is not transferable without Google’s margins, while Amazon’s approach works for every company.”
While Amazon’s and Google’s approaches often differ drastically, Russell believes in taking the best from both companies. After all, they both became successful for a reason.
The key is to adapt those key lessons to your specific needs and culture–allowing you to get the best from both worlds.
—————–
To view this article in its original format, click here.
