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Amazon CEO Andy Jassy has warned that large companies risk stifling invention and speed as they grow, unless they actively flatten decision-making structures and create space for risk and failure.
Speaking to Harvard Business Review, in the wake of recent announcements that outlined an intention to significantly reduce management headcount, Jassy shared how Amazon is reshaping its operating culture to stay 'inventive at scale' by improving in-person collaboration, and rebalancing power toward those building products on the ground.
“It comes back to this notion of wanting to operate like the world’s largest startup,” Jassy said. He believes that preserving a startup mentality in a large enterprise means embracing both resourcefulness and risk-taking, while ensuring HR structures are in place to support both.
Fewer layers, more ownership
As the online shopping giant has expanded, the complexity of its hierarchy has presented new leadership challenges.
“As you get larger, as we have, as we’ve grown so much the last 10 years, you end up logically with a lot of managers and a lot of layers of managers,” Jassy said.
That, he explained, can erode accountability and speed. “You find that you end up with things like there’s a pre-meeting for the pre-meeting for the pre-meeting for the decision meeting, or you find that owners don’t feel like they own the decision, can make the recommendation anymore because that decision’s going to be made three levels up.”
In response, the firm has introduced a company-wide goal to rebalance its workforce.
“That’s part of this effort we’ve taken, which is to increase the ratio of individual contributors to managers by at least 15% across the company, which we have beaten already by the end of the first quarter,” he said. “But we want to flatten our organizations to move faster and to drive more ownership.”
The strategy of restoring decision-making to those closer to the work has become central to Jassy’s leadership approach. “In our case, we really felt like we wanted to have more ownership with our individual contributors and the people doing the actual work. So that’s why we’ve taken this action of trying to flatten and have fewer managers.”
Risk, failure, and cultural renewal
Jassy also spoke about the cultural risk facing large enterprises, because as they scale, fear of failure can creep in.
“If you hire achievement-oriented type A people, which a lot of companies, including ourselves, have, they’re not used to failing,” he said. “And so a lot of times when they want to pursue something very different, they worry that they’re going to be ostracized if they get it wrong, and so they’ll play not to lose.”
He believes it creates a creativity ceiling.
“The only way to build something unique and different is to do something different from what people have done, and you have to be willing to take risk and be willing to fail sometimes.”
It’s a mindset he says Amazon is working hard to preserve, even as its size threatens to sweep aside its early culture.
“Most companies that have been successful for any period of time have a culture that’s been a key part of their success. And that is for sure true with Amazon,” he said. “But it is not our birthright to keep having a strong culture… you have to keep working on strengthening the parts of your culture that you see being stretched if you want to keep being successful culturally.”
Jassy pointed to team size as another common mistake in scaled companies. “You can’t think about every new project taking 50 to 100 people to do,” he said. “Our storage service, we had 11 people or 13 people when we started, our compute service, EC2, we had 11 people. You can get going with a small number of people and build something that people actually find resonant, and then keep iterating from there.”
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Inventing better together
On the sticky subject of return to office, Jassy defended Amazon’s policy requiring employees to be in the workplace three days a week since May 2023.
“When we brought people back to the office… we noticed that a lot of things about how we were inventing and how we were collaborating got better,” he said.
His argument focuses not on measurement, but experience.
“If you do a lot of inventing like we do… our style of invention is often very collaborative. We’re in meetings together, we’re iterating with one another… What you find is people riff on top of each other’s ideas better if they’re together.”
He acknowledged the difficulty in quantifying creative progress: “You don’t actually know how well you’re inventing for probably a few years… it’s quite difficult to measure.”
But his own experience has convinced him that a return to the office needs to happen.
“There is no comparison to being in person than remote,” he said.
For Jassy, successful leadership in a large organization depends not on rigid models, but on consistent delivery.
“It is not our birthright to keep having a strong culture,” he said. “Things change, your size of companies change, the scope of businesses you’re going after change, the geographic distribution, your people change, and you have to keep working on strengthening the parts of your culture that you see being stretched if you want to keep being successful culturally.”
