A 750-year-old soy sauce secret and an iconic product design

As an Asian, I love soy sauce. That’s what I grew up with and continue to use it regularly in my own cooking. So it was a pleasant surprise that I came across two very interesting clips. The first one talks about how a method to make soy sauce has survived centuries and generations in the birthplace of soy sauce in Japan. The second one discusses the iconic product design of Kikkoman. Not only is their dispenser’s design recognizable without any logo or branding, but it also bolsters customer experience.

Isn’t the world interesting? The design that we usually take for granted took the original designer, Kenji Ekuan, several years to develop. The sauce that we dip our sushi or pour on our food has been around for centuries. This is the main reason why I want to travel the world, to learn about new things.

Book Review: Working Backwards: Insights, Stories and Secrets From Inside Amazon

I always cherish a read that reports honestly on the culture of a company, pulling the curtain and providing details on what works, what processes the company used to forge the culture or the “tribe” that they have. Working Backwards is such a book. It was written by two insider Amazon veterans who lived the experience. From a small startup in Seattle that sold books online in the 1990s, Amazon has grown over time to become a household name in the world, a brand trusted by many and a competitor feared by rivals. It’s marching nicely towards generating $400+ billion in annual sales and currently employing over 1 million people. When a company consists of a small team of folks, management and the instillation of culture are straightforward. However, it’s another issue to manage more than 1 million people and still maintain the culture. How did Amazon do so?

“Our culture is four things: customer obsession instead of competitor obsession; willingness to think long term, with a longer investment horizon than most of our peers; eagerness to invent, which of course goes hand in hand with failure; and then, finally, taking professional pride in operational excellence.”

Excerpt From: Colin Bryar. “Working Backwards.”

When it comes to culture and corporate values, you may feel that a lot of companies just put together a list of sensible and sound-good sentences. That’s true. What makes one company different from another is how much the day-to-day operation is guided by its culture and how much the leaders exemplify it. From the very beginning, Jeff Bezos already showed the importance of customer obsession, setting the tone for the #1 value at Amazon for years to come. When employees see the CEO walk the walk, instead of just talking the talk, they believe in what he or she says and follows accordingly.

“From the tone of customer emails to the condition of the books and their packaging, Jeff had one simple rule: “It has to be perfect.” He’d remind his team that one bad customer experience would undo the goodwill of hundreds of perfect ones. When a coffee-table book arrived from the distributor with a scratch across the dust jacket, Jeff had customer service write to the customer to apologize and explain that, since coffee-table books are meant for display, a replacement copy was already on order, but shipment would be delayed—unless time was of the essence and they preferred the scratched copy right away. The customer loved the response, and decided to wait for the perfect copy while expressing their delight at receiving this surprise consideration.”

“Another of Jeff’s frequent exhortations to his small staff was that Amazon should always underpromise and overdeliver, to ensure that customer expectations were exceeded. One example of this principle was that the website clearly described standard shipping as U.S. Postal Service First-Class Mail. In actuality, all these shipments were sent by Priority Mail—a far more expensive option that guaranteed delivery within two to three business days anywhere in the United States. This was called out as a complimentary upgrade in the shipment-confirmation email. Thank-you emails for the upgrade included one that read, “You guys R going to make a billion dollars.” When Jeff saw it he roared with laughter, then printed a copy to take back to his office.”

Excerpt From: Colin Bryar. “Working Backwards.”

One of Amazon’s core values is Hire and Develop The Best. In the very beginning, staff was handpicked by Jeff Bezos, who has a notoriously high standard. As the hiring need grew substantially, Jeff couldn’t get involved in every hire any more. At one point, they ” had new people hiring new people hiring new people.” It became much more challenging to ensure the quality of every hire. Hence, The Bar Raiser program was created. The program’s purpose is to create a formal, scalable and repeatable process that can help with hiring the right people. Essentially, in addition to the normal practices such as having detailed Job Descriptions, phone screening and multi-team interviews, Amazon trains a team of interviewers whose goal is to identify in every new hire something that he or she can do better than a member of the existing team. The Bar Raiser cannot be the hiring manager or recruiter, but has the veto power to ultimately reject an applicant; though such a power is reportedly rarely exercised. It’s similar to having a new set of eyes that can review your work, whether it’s an essay or a code, and help remove the gut feelings out of the process as much as possible.

As Amazon’s business became increasingly multi-faceted and complex, how did the firm organize teams internally to be nimble, effective and innovative? The answers are: single-threaded leadership and two-pizza teams. The concept of single-threaded leadership is fairly simple: appoint someone to own a major initiative and remove all other responsibilities. Unburdened by other responsibilities, these single threaded leaders can devote all the time and energy to make their initiatives work and grow. More importantly, when a company wants to come up with new ideas, there is no way to gauge the results of the ideas without bringing them to real life and there is no point of doing so when there is nobody focused completely on that task alone. Andy Sassy, who will become the next CEO of Amazon in Q3 2021, used to be Jeff Bezos’ shadow and the single threaded leader for AWS. Other major successes at Amazon such as Prime, Kindle and Amazon Digital all resulted from having dedicated teams and leaders build them up from the ground.

“Amazon’s SVP of Devices, Dave Limp, summed up nicely what might happen next: “The best way to fail at inventing something is by making it somebody’s part-time job.”

And there is the two-pizza team. It’s normal in a working environment to depend on somebody else for your job. However, if there are too many dependencies, they will slow down the innovation process and reduce the efficiency of the whole company. To address that issue, Amazon came up with the two-pizza team concept. The idea is to have a small enough team that they can be fed with two pizzas. Each team is tasked with removing its dependencies and building out infrastructure and innovating. The sooner a team becomes unshackled by dependency on others, the sooner it can dedicate its resources to actual work and innovation. Each team functions like a small startup or a self-sustaining API that can work together if necessary, but doesn’t rely on others to be effective.

The next element of the Amazon Magic is my favorite: the importance of writing. At Amazon, Power Point is replaced by 6-page memos. The point is that writing a memo helps crystalize and sharpen ideas, as well as removes the limitations of a Power Point. Of course, Amazon still delivers presentations to partners, but internally, they rely on memos to ensure that the presenters think through the ideas/problems and don’t waste anybody’s time with half-baked thoughts. Another practice is to write a PR/FAQ for every new product/service idea. The idea is to envision the end result or customer experience that could come from a new idea, put it down to a one-page press release and work backwards to the details in an FAQ section.

I cannot tell you how many times I came up with an idea and after putting it to words on this blog, I realized how little I thought about it. Every time I write about something on this blog, it still may not be accurate, but the end product is much better than my original thought. At work, I also see it first hand. People have a lot of ideas in their head and shoot out ideas to everyone else. I am pretty confident that they didn’t take the time to work through the nuts and bolts, the logic, the challenges and ramifications of their ideas.

“The reason writing a good 4 page memo is harder than “writing” a 20 page powerpoint is because the narrative structure of a good memo forces better thought and better understanding of what’s more important than what, and how things are related. Powerpoint-style presentations somehow give permission to gloss over ideas, flatten out any sense of relative importance, and ignore the interconnectedness of ideas”

“Pressed against this functional ceiling, yet needing to convey the depth and breadth of their team’s underlying work, a presenter—having spent considerable time pruning away content until it fits the PP format—fills it back in, verbally. As a result, the public speaking skills of the presenter, and the graphics arts expertise behind their slide deck, have an undue—and highly variable—effect on how well their ideas are understood. No matter how much work a team invests in developing a proposal or business analysis, its ultimate success can therefore hinge upon factors irrelevant to the issue at hand.

We’ve all seen presenters interrupted and questioned mid-presentation, then struggle to regain their balance by saying things like, “We’ll address that in a few slides.” The flow becomes turbulent, the audience frustrated, the presenter flustered. We all want to deep dive on important points but have to wait through the whole presentation before being satisfied that our questions won’t be answered somewhere later on. In virtually every PP presentation, we have to take handwritten notes throughout in order to record the verbal give-and-take that actually supplies the bulk of the information we need.

“Pressed against this functional ceiling, yet needing to convey the depth and breadth of their team’s underlying work, a presenter—having spent considerable time pruning away content until it fits the PP format—fills it back in, verbally. As a result, the public speaking skills of the presenter, and the graphics arts expertise behind their slide deck, have an undue—and highly variable—effect on how well their ideas are understood. No matter how much work a team invests in developing a proposal or business analysis, its ultimate success can therefore hinge upon factors irrelevant to the issue at hand.

We’ve all seen presenters interrupted and questioned mid-presentation, then struggle to regain their balance by saying things like, “We’ll address that in a few slides.” The flow becomes turbulent, the audience frustrated, the presenter flustered. We all want to deep dive on important points but have to wait through the whole presentation before being satisfied that our questions won’t be answered somewhere later on. In virtually every PP presentation, we have to take handwritten notes throughout in order to record the verbal give-and-take that actually supplies the bulk of the information we need. “The slide deck alone is usually insufficient to convey or serve as a record of the complete argument at hand.”

There are more great points, examples and details about Amazon’s culture from the book, apart from some of my favorite above. The book also touches on the value of thinking long term, being patient, removing defections at every level or controlling the input variables. With what I think are sensible decisions and policies, there is little wonder why Amazon is a success that it is today. In my opinion, there is no greater competitive advantage than having a robust culture that can foster a company’s mission and vision. You can replicate parts of operations or strategy, but it’s much harder to replicate a culture. Amazon managed to put together a strong culture, evidenced by their financial success and brand name, and it’s something that rivals will find highly challenging, if not impossible, to mirror.

This is a great read for business students or any curious mind that wants to know more about one of the greatest companies on Earth. If you are looking for such a read, I highly recommend it.

Disclosure: I own a position on Amazon.

Today I learned – Miso

Admittedly, even though I usually order a miso soup when at a Japanese restaurant, today is the first time I learned that miso refers to the name of a paste, not the soup itself. The fermentation process of making miso is highly complex, time-consuming and demanding. Depending on the flavors required by consumers, some miso can take 3 years to be ready for consumption. It’s interesting to see how it evolved over time, adopting technology and changes in modern life. Nowadays, consumers can drink miso soup like coffee or make miso balls which dissolve in hot water, making instant delicious and nutritious soup.

Manchester United’s defining challenges

Since Sir Alex Ferguson retired, Manchester United has been falling from glory to what seems to be a bottomless hole of troubles. The club has had 4 managers in the span of 7 years while Sir Alex managed the club for more than 2 decades. Presence in Champions League that used to be a default is a luxury these days. Once a contender for important titles such as Premier League and Champions League, we are reduced to aim for Top 4 finish every year in the national league. The club is in shambles and faces defining challenges

Wrong coaches

I believe that we have had coaches that don’t fit with the club’s culture since Alex Ferguson’s retirement. David Moyes wasn’t good enough. Van Gaal wasn’t who he used to be. Mourinho was world class tactically, but he didn’t have the attacking mindset that the club is known for. Ole Gunnar Solskaer is a legend and familiar with the club’s culture. But he hasn’t shown that he has the tactical prowess to bring the team back to its former glorious self. We need a manager who is not only a household name, but also a great tactician and manager. As the club doesn’t have the appealing standing any more, another way to attract talent is to have a world-class coach that players admire. The coach also favors home-grown talent, a tradition that MU has carried for decades. Our current manager, unfortunately, doesn’t fit the bill.

An egregious transfer policy and a roster of insufficient players

The club was blessed with world-class players in the past, including Giggs, Vidic, Rio, Scholes, Ronaldo, Tevez, Rooney, Van Persie, Carrick, just to name a few. We also have excellent role players who are willing to step up to the plate when needed such as Chicharito, Fletcher, Anderson, Nani, O’Shea. Nowadays, players that meet the standard at MU are in short supply. We have players who have the potential to be excellent such as Rashford, Martial, Scott, Greenwood, De Gea, Maguire, Wan-Bissaka and Pogba, but they need help and a coach to realize the full potential. Other players are simply just not good enough. The bench is thin and features players who should have been shipped out of the club a long time ago such as Young, Matic, Rojo and Jones.

We made seriously expensive mistakes in the transfer policy such as Alexis Sanchez. The failure to attract players with merit was offset by the willingness to overpay. To some extent, I was pleased to hear that we pulled out of the deal with Haaland due to the excessive demand from the player’s camp. We can’t keep overpaying for players to come to the club so that they succumb to pressure from a high price tag and flounder.

The current struggles can be a blessing in disguise. The club needs to develop home-grown talent and improve the scouting system. We need to get back to the basic by promoting potential young players and identifying gems that can be polished. A resource-rich club like MU, I firmly believe, is capable of discovering inexpensive potential players like we did with Evra, Vidic, Kawaga or Chicharito. That’s not to say that we can’t open the cheque book when necessary. The journey will take time, but I’d rather see that get started sooner or later.

Ed Woodward needs to go

A CEO either resigns or is let go if he or she doesn’t bring the required results. Hence, I am baffled and disappointed that Ed Woodward manages to keep his job after years of absolutely embarrassing performance on the football side. He may increase the revenue for the club, but what good does it do if the long-term sustainable state of MU is in danger. We need a better executive who knows football and cares more about our on-pitch performance.

Manchester United is blessed with a huge base of dedicated fans like myself, a household name, a great tradition and a lot of resources. We can return to the top, but we need much better leadership on and off the pitch.

Book: What you do is who you are

I have heard about What You Do Is Who You Are: How to Create Your Business Culture by Ben Horowitz for some time, but hadn’t had time to read it until this week. Here are my thoughts on the book after finishing it.

Ben laid out a few key points in building a culture and supported those points with several major historical examples including Genghis Khan, and with his own personal experience in a long illustrious career. Overall, the main thesis of the book is that to be a leader and build a culture, one must walk the talk and follow words with concrete actions, even though sometimes the choices are hard to make. Personally, there are several following minor points that I really like

The Japanese culture of craftsmanship and attention to detail begins with death.

If you realize that the life that is here today is not certain on the morrow, then when you take your orders from your employer, and when you look in on your parents, you will have the sense that this may be the last time – so you cannot fail to become truly attentive to your employers and your parents

Shocking rules help drive folks to become more disciplined.

One of the examples used in the book is about Coach Tom Coughlin of the New York Giants from 2004 to 2015. He set the rule that said, “If you are on time, you are late”.

Culture and strategy do not compete

I have heard numerous times in business schools and the press that “culture eats strategy for breakfast”. I actually never thought so. Both are important and influential to a company’s existence. They don’t compete with each other. I am glad to read that Ben agreed and articulated the point really well with examples.

Issues with the “don’t bring me a problem without bringing me a solution” mentality

We all have heard it before. One or more managers that we worked with instructed us to be proactive and solution-oriented by telling us to accompany a problem with a suggestion. There is a sound rationale behind that mentality. It forces the carrier of bad news to think of solutions and be engaged in finding a solution, instead of being a whiner or complainer. On the other side, there are problems in an organization that barely show up on the leadership’s radar and that are too complicated for one low-level staff to design a solution. The mentality in question implicitly and unexpectedly discourages folks from even discussing complicated issues since they are not confident in their solutions or they don’t have any.

Overall, the book provides great points in building culture, accompanied by examples from history, recent businesses and Ben’s own career. The core principles discussed in the book are nothing new, but the examples and the subtle minor points can be very interesting.