- Amazon CEO Jeff Bezos is stepping down at the end of this year.
- Amazon has an internal succession planning process that helps prepare for leadership changes.
- The process includes annual reviews of the board of internal graphics that list the top senior executives.
- See more stories on the Insider business page.
The decision by Amazon CEO Jeff Bezos to officially resign last month came in the short term.
Even those who work closest to the CEO’s office learned of this just two days before the announcement, according to people familiar with the matter.
It was then that Bezos signed the paperwork and formalized his move to chief executive, as the United States Securities and Exchange Commission requires that any material changes to the company be filed within four business days. Amazon Web Services CEO Andy Jassy will replace Bezos as Amazon’s CEO in the third quarter of this year.
Behind the scenes, however, Bezos’ plan to step down as CEO has been underway for years through the company’s succession planning process, these people said.
Succession planning involves an annual review of the future plans of the executive team and reserve candidates, as well as a chart that maps out the company’s rising stars, Insider found. Executives are also encouraged to have succession conversations with two or three direct reports if an unexpected change occurs.
It is a very strict procedure that is based on intensive bureaucracy, years of research and a constant dialogue that all lead to a continuity of governance within Amazon that is as detailed as the company itself.
People familiar with the process said it was more of an informal system than an established program, with enough flexibility to allow Bezos to keep Jassy’s appointment and the exact moment of his resignation close to his chest.
Still, people say it is an effective strategic tactic, but little discussed in the Amazon manual, which can help the company make a smooth transition to the post-Bezos era amid the biggest leadership twist in its 27-year history. .
Insider spoke with six current and former Amazon executives to learn more about the company’s succession planning process. Everyone spoke on condition of anonymity because they were not allowed to speak publicly about the company.
“In fact, it is up to the company to systematize a process,” said one person. “Jeff [Bezos] try not to do things so suddenly. “
The Amazon spokesman declined to provide an official comment for this story.
Top 25 executives
Bezos previously told Insider in a 2014 interview that Amazon had a succession plan for him and “all of our senior executives”. He did not reveal the name of his successor at the time, but signaled that the company had already made plans for his eventual resignation since then.
Part of these discussions takes place at the board level. Each year, usually in late January, the Amazon board holds a meeting to assess potential successors for key positions, two of the people said. The meeting, which lasts about two hours, goes through a matrix of 20 to 25 top executives and their potential substitutes, should any of them decide to leave the company.
The chart lists the two or three most preferred successor candidates for each executive. When the choice is not so clear, there will be a note stating that a provisional person is in place or that an external candidate is being considered. Not all executive positions are reviewed, and the board could devote more time to just a few names.
The chart is drawn up by Team S, the Amazon group of about two dozen senior executives who make important decisions, with direct input from the human resources department.
Team S meetings can become intense when choosing who to include on the list. These meetings usually lasted four to five hours, and the people with the longest (or those who spent almost 20 years in the company) would have more voice than the younger team members.
Bezos could be particularly frank with his feedback, as he liked to maintain an extremely high level of adding new names to the list. Team S, for example, had very little turnover and rarely added new members until last year, when it saw nine new members.
Overall, the people who attended these meetings say it is a good exercise to help the S team and the board become familiar with other parts of the company and new leaders who are on the right track at Amazon.
“It is a really good opportunity to discuss strengths and weaknesses,” said one of the people.
In recent years, as Amazon has become a popular poaching field for other companies, Bezos has also started conducting individual sessions with many of the executives on the list so he could better understand his future intentions. The goal is to avoid being “caught off guard”, said one person, since Bezos likes to be “very warned” before his top lieutenants leave.
Amazon’s approach to succession planning is a “good orderly process” that can be found in any “working well” company, according to Jason Schloetzer, business professor at Georgetown University, whose research includes CEO succession practices . The only risk, he said, is that Bezos will remain on the company’s board, making it potentially difficult for Jassy to force decisions that her predecessor may not always agree with. Considering that there were previous cases of former CEOs in other companies that ended up being a distraction for new leadership, it is a dynamic that Jassy will have to navigate after being promoted.
“It’s a little unusual,” said Schloetzer of Bezos’ new role. “But this is the founder of the company, which has been hugely successful.”
Amazon Web Services CEO Andy Jassy will replace Jeff Bezos as Amazon CEO.
Isaac Brekken / AP
Bezos empty box
Although the chart reviewed by the board usually showed candidates for successors for the nearly two dozen senior positions at Amazon, there was always a remarkably empty box – next to Bezos’s name.
The CEO’s potential successors were not mentioned in the chart analyzed by the board, in part because Bezos didn’t want to be too explicit about who he preferred as his replacement, said a person familiar with the process.
Instead, Bezos would have private discussions with the board, sharing several names he considered ideal as Amazon’s next CEO.
These candidates were almost always interns, since Bezos had a strong belief in finding someone from the inside, two people said. Bezos feared that an external candidate would be less “risky” or someone who did not want to try new experiments, an important leadership trait at Amazon. One person said Bezos also became more cautious about outside hiring after Joe Galli’s failed experiment – a high-profile hiring in 1999 that left the company just 13 months after joining the company as president and chief operating officer.
During these board meetings, Bezos used to name three names: Jassy, the AWS CEO who is due to replace Bezos later this year; Jeff Wilke, the former retail CEO; and Jeff Blackburn, former video and corporate development executive.
One person said that it is difficult to say that Jassy was the “first of equals”, as the three have their own strengths and weaknesses. But the final call to nominate Jassy as the next CEO probably depended on Bezos’ own decision, even if the board evaluated the three candidates, he added.
This does not necessarily mean that Bezos liked Jassy instead of Wilke or Blackburn. Wilke announced his retirement last year, before the announcement of the new CEO, while Blackburn took a one-year leave in 2020 before deciding to resign last month. The Amazon spokesman said earlier that these changes had nothing to do with the appointment of Jassy, although there is internal speculation that they are in fact related.
Bezos also “signaled” to the board last summer that he was ready to take on a new role, the Wall Street Journal reported last month.
The ‘hit by a bus’ plan
In addition to the list of the top 25 executives and their potential successors, Amazon’s board looks at a separate chart that includes about 50 of the company’s rising stars. The people in this graph are different from those in the other list, as it aims to identify the future leaders of the company.
The graph is divided into four quadrants: the highest quadrant being “very potential” and the lowest quadrant being “disappointing” or “not corresponding to potential”. The main purpose of the chart is to guide new leaders to take on bigger roles in the company, one person said. Some of them would be transferred to the company to gain a broader experience, while others would be chosen to take specific positions, such as Bezos’ shadow consultant, who joins all the CEO’s meetings.
Outside of board and S team meetings, Amazon encourages its vice presidents and directors to informally plan their own successors, three people said. Internally, some call it a “hit-and-run” plan because it allows the executive to prepare for the worst in advance. The name is a reference to a phrase commonly used by Bezos, who liked to ask if the company had plans “if I were hit by a bus”, said these people.
Amazon executives typically have two or three qualified people in mind to replace them immediately. For example, when former senior vice president Greg Greeley joined Airbnb in 2018, the company had two vice presidents, Jamil Ghani and Cem Sibay, to replace him. And when former head of physical stores Steve Kessel abruptly left last year, Amazon was able to give another vice president, Dilip Kumar, an expanded role within the team.
Still, plans that take place outside the boardroom are less formalized and often receive limited attention, people said. This is partly because Amazon likes to act quickly and constantly reorganize teams when necessary, leaving executives with little time to work out a detailed succession plan.
“Ideally, we should have succession planning for all management positions and above,” said one of the people. “But we just move too fast.”
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