Restructuring Team Quotes

In early 2002, as part of a new personal ritual, he took time after the holidays to think and read. (In this respect, Microsoft’s Bill Gates, who also took such annual think weeks, served as a positive example.) Returning to the company after a few weeks, Bezos presented his next big idea to the S Team in the basement of his Medina, Washington, home. The entire company, he said, would restructure itself around what he called “two-pizza teams.” Employees would be organized into autonomous groups of fewer than ten people—small enough that, when working late, the team members could be fed with two pizza pies. These teams would be independently set loose on Amazon’s biggest problems.

Build your team. If you are inheriting a team, you need to evaluate, align, and mobilize its members. You likely also need to restructure it to better meet the demands of the situation. Your willingness to make tough early personnel calls and your capacity to select the right people for the right positions are among the most important drivers of success during your transition and beyond.

we had to unlearn a great deal of what we thought we knew about how war—and the world—worked. We had to tear down familiar organizational structures and rebuild them along completely different lines, swapping our sturdy architecture for organic fluidity, because it was the only way to confront a rising tide of complex threats. Specifically, we restructured our force from the ground up on principles of extremely transparent information sharing (what we call “shared consciousness”) and decentralized decision-making authority (“empowered execution”). We dissolved the barriers—the walls of our silos and the floors of our hierarchies—that had once made us efficient. We looked at the behaviors of our smallest units and found ways to extend them to an organization of thousands, spread across three continents. We became what we called “a team of teams”: a large command that captured at scale the traits of agility normally limited to small teams.

A management team brought in by George to restructure Lucasfilm seemed concerned mostly with cash flow, and as time went on, they became openly skeptical that our division would ever attract a buyer. This team was headed by two men with the same first name, whom Alvy and I nicknamed “the Dweebs” because they didn’t understand a thing about the business we were in. Those two guys threw around management consulting terms (they loved to tout their “corporate intuition” and constantly urged us to make “strategic alliances”), but they didn’t seem at all insightful about how to make us attractive to buyers or about which buyers to pursue. At one point, they called us into an office, sat us down, and said that to cut costs, we should lay off all our employees until after our division was sold—at which point we could discuss rehiring them. In addition to the emotional toll we knew this would take, what bugged us about this suggestion was that our real selling point—the thing that had attracted potential suitors thus far—was the talent we’d gathered. Without that, we had nothing. So, when our two like-minded overlords demanded a list of names of people to lay off, Alvy and I gave them two: his and mine.

Specifically, we restructured our force from the ground up on principles of extremely transparent information sharing (what we call “shared consciousness”) and decentralized decision-making authority (“empowered execution”).

The entire company, he said, would restructure itself around what he called “two-pizza teams.” Employees would be organized into autonomous groups of fewer than ten people—small enough that, when working late, the team members could be fed with two pizza pies. These teams would be independently set loose on Amazon’s biggest problems. They would likely compete with one another for resources and sometimes duplicate their efforts, replicating the Darwinian realities of surviving in nature. Freed from the constraints of intracompany communication, Bezos hoped, these loosely coupled teams could move faster and get features to customers quicker. There were some head-scratching aspects to Bezos’s two-pizza-team concept. Each group was required to propose its own “fitness function”—a linear equation that it could use to measure its own impact without ambiguity. For example, a two-pizza team in charge of sending advertising e-mails to customers might choose for its fitness function the rate at which these messages were opened multiplied by the average order size those e-mails generated. A group writing software code for the fulfillment centers might home in on decreasing the cost of shipping each type of product and reducing the time that elapsed between a customer’s making a purchase and the item leaving the FC in a truck. Bezos wanted to personally approve each equation and track the results over time. It would be his way of guiding a team’s evolution.

On top of the potential for restructuring the business, there are significant bloated costs to trim. General Insurance is paying for expensive sponsorship deals with sports teams that offer little benefit. It needlessly maintains two Gulfstream private jets. Some managers work four days a week because their workloads are perennially light. Bonus plans have targets that are far too easy to meet. Pensions are inexplicably overfunded, and the company’s contributions to pension programs can be scaled back to the lower end of targets set by regulators. The IT department is overstaffed and full of pet projects that the business will never realize value from. Low-grade IT can be outsourced to Asia.

When we talk with school officials and local politicians about restructuring large high schools, the first thing they worry about is what will happen to the basketball or baseball teams, the after-school program, and other sideshows; that the heart of the school, its capacity to educate, is missing, seems almost beside the point.

Why is that person in our organization if he or she is not contributing? What is the impact of a negligible producer on other team members? What can we do to enhance that person’s contribution? Do we move him to another “position,” restructure his current job, or make other fundamental changes that would amplify that person’s contributions? Should that person be removed from our team?

The company created a new team of top executives called the business development board, whose sole job was to look for other companies to buy. This group was essentially a reincarnation of the central development group that Brad Hall had overseen in the late 1990s, but it was restructured in a way that made it larger, more influential, and capable of closing deals that were larger by an order of magnitude than anything Koch had done before. The new development group rivaled any deal-making entity on Wall Street. The team had a steady river of cash to work with thanks to the steady flow of money generated at Pine Bend and other assets. The team also made use of Koch Industries’ nearly pristine credit rating,I which made it cheap and easy to get big loans. Even this new strategy—to push for growth and limit risk with a corporate veil—rested on a deeper, more important idea. This idea was the centerpiece of Koch’s new game plan, which relied on one competitive advantage more than any other: Koch’s superior information. Koch was seen by outsiders as an energy company, but, within the firm, it was seen quite differently. Charles Koch and his lieutenants considered Koch to be an information-gathering machine that built up stores of knowledge that were deeper and sharper than its competitors’. This strategy traced back to Koch Industries’ earliest days, but with the new business development board in place, it reached the level of a fine art. Koch’s newly designed companies, like Koch Minerals, each had their own mini development teams that became like searchlights, trained on the various industries in which they operated. Whatever they saw and learned was transmitted to the central development board, which synthesized the information with knowledge that was flowing in from Koch’s other companies. The development board also undertook studies of its own, looking for new opportunities beyond the existing Koch universe.