From One-Way to Two-Way Doors: Rethinking How We Make Big Decisions
How to recognize the differences between one-way and two-way doors. A way to think about risk and decision-making.
Welcome to the Scarlet Ink newsletter. I'm Dave Anderson, an ex-Amazon Tech Director and GM. Each week I write a newsletter article on tech industry careers, and specific leadership advice.
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It can be scary to present a document or proposal to your SVP at Amazon. It’s not like they’re mean people. I’d actually say that every SVP I worked with was quite reasonable. They were all brilliant, and fairly calm.
Instead, I’d say it was the potential impact which was scary. With a word or whim or decision, they could make or break your group. They had the potential to drop a casual, “Now that you mention it, maybe we shouldn’t fund your team?”
All that being said, if you weren’t the primary person presenting that document or proposal, it was quite fun to go to an SVP meeting. I always felt like I learned a lot, and I’ve always loved change. One way or another, SVPs made changes happen.
One day, my organization brought a couple of proposals to our SVP.
I assumed one was a hard sell, and one would be a slam dunk.
The hard sell was a big increase in funding. We were asking for tens of millions of dollars to spend in the coming months to improve our product. Headcount, licensing, the works. It was a major cost increase.
The slam dunk was a minor update to our product name. We didn’t want to completely rename our product, but we felt that we could clarify our product and the value it provided if we slightly renamed it. We felt this should be particularly easy as everyone in the organization was on board that it was an obvious change to make.
We sat there for the usual 45 minutes as the document was read. As usual, I tried peeking at the stack of paper in front of our SVP, trying to read an upside down scribbled note from 10 feet away. I’d found through many document readings over the years that I could sometimes identify which word or phrase was marked, so I could have a head start preparing for a potential question.
When he finished reading, he said he had no questions about the funding request. He said that was approved immediately. His comment was something like,“The math works. I’d just like to see regular updates to see if the increase in funding did result in better or worse than expected changes for the business.”
We were 30 seconds after our reading time, and we already had tens of millions in additional funding. Looking around the table, I could tell I wasn’t the only one gobsmacked.
However, we weren’t done. His next comment also surprised us all.
“Name changes are one-way doors. I want to be absolutely sure that you’ve explored every option before we consider doing this. I don't think we're there yet.”
During the remaining 45 minutes, we covered a number of topics.
We discussed data we could gather to be confident that our name was indeed causing an issue, and that it wasn’t simply a matter of internal perception. We discussed alternative options to clarify things for our customers without renaming, and which were worth investigating.
We did not get a green light to make our change. The slam dunk change we were so confident about. But we really could have anticipated this result.
At Amazon, we talk a lot about one-way and two-way doors. One-way doors are irreversible. They can’t be undone easy, so once you make that decision, you generally can’t change your mind. Two-way doors are lower risk decisions. At any moment, you can decide to go in the other direction. These are decisions you can audit, and change direction as you learn more.
Everyone at Amazon spends significant effort trying to turn every possible door into a two-way door. We are taught to be aggressive with two-way doors, and shy away from one-way doors.
When increasing your level of investment in a business, you can change your mind at any time. At any point, payments could stop. While the numbers sounded large to us normal humans, the cost to Amazon was relatively low in the grand scheme of things. Either Amazon got a good return on investment, or it didn’t. Either way, our organization would learn more about our business. Plus, moving slowly has a different set of hazards associated with it.
In this case, our SVP wanted our business to either grow through additional funding, or to learn that we couldn’t grow through additional funding. Tens of millions to answer that question was a low and safe price.
On the other hand, changing a business name can't be undone easily. It's a one-way door. While the cost to Amazon's pocketbooks might be minimal in the short run, it could have long-term ramifications. Any change like this could cause brand reputation issues, and impact the long-term success of a product. While a slight rename requires minimal actual effort, it requires a slower, thoughtful process to examine potential risk, experiment, and check every other possible direction before deciding that this decision is the right one.
Jeff Bezos on one-way vs. two-way doors
Jeff has repeatedly mentioned these doors in interviews and in his writing. This concept is a core tenet behind how he thought Amazon should operate.
From his 1997 letter to shareholders.
Some decisions are consequential and irreversible or nearly irreversible – one-way doors – and these decisions must be made methodically, carefully, slowly, with great deliberation and consultation. If you walk through and don’t like what you see on the other side, you can’t get back to where you were before. We can call these Type 1 decisions. But most decisions aren’t like that – they are changeable, reversible – they’re two-way doors. If you’ve made a suboptimal Type 2 decision, you don’t have to live with the consequences for that long. You can reopen the door and go back through. Type 2 decisions can and should be made quickly by high judgment individuals or small groups.
As organizations get larger, there seems to be a tendency to use the heavy-weight Type 1 decision-making process on most decisions, including many Type 2 decisions. The end result of this is slowness, unthoughtful risk aversion, failure to experiment sufficiently, and consequently diminished invention. We’ll have to figure out how to fight that tendency.
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Any companies that habitually use the light-weight Type 2 decision-making process to make Type 1 decisions go extinct before they get large.