“It’s not that I’m so smart, it’s just that I stay with problems longer.”

– Albert Einstein

Several years ago, Amazon was struggling with scaling its e-commerce infrastructure and realizing that many of its internal software projects took too long to implement, a major pain point from a competitive standpoint.

Andy Jassy, acting as a chief of staff for Amazon CEO Jeff Bezos, was assigned the task of figuring out why. What he realized was that what many of these teams were building wasn’t scaling beyond their own projects. For each new project, a team would have to reinvent the wheel.

Jassy and Amazon could have come up with a solution to this internal scaling problem and stopped there. But the team went beyond that, figuring that if they were having difficulty with certain technology infrastructure problems, it was highly likely that other companies were experiencing similar problems. Thus, if they could solve these issues for themselves, they could potentially also solve it for others.

So Amazon started to develop an architecture that could be re-employed over and over again by different engineering teams for different projects. These services allowed Amazon the retailer to move more quickly than it had previously.

But the company didn’t stop there, choosing instead to turn its solution into a new business line, offering cloud computing as a service. And so Amazon Web Services was born. Today, AWS generates roughly $3 billion in annual revenue and adds more infrastructure daily than it took to run all of Amazon in 2003 when it was a $5.2 billion retail business with over 7,800 employees.

The lesson of course is that Amazon didn’t stop by solving its problem, but found a “breakthrough solution” that opened up new business opportunities.

Eight Levels of Problem Solving

It’s not easy to create culture that, like Amazon, sees opportunities instead of problems. But it helps to start with a simple motivational framework to focus people on assessing their own problem-solving abilities. Even better is to begin to reward them as you see their problem-solving abilities progress.

What level problem solver can you be?

Level 0 – Can’t see the problem

Level 1 – See the problem and raise it

Level 2 – See the problem and define it clearly (a problem well defined is a problem half-solved)

Level 3 – See the problem, define it clearly, and identify the root cause

Level 4 – Plan ahead to avoid the problem or derivative problems re-occurring (prevention is better than a cure)

Level  5 – Find a practical and viable solution to the problem

Level 6 – Find a breakthrough solution to the problem (for example, one that saves more than it costs, or opens the way to other breakthroughs)

Level 7 – Take initiative to implement the solution or develop the breakthrough

Level 8 – Look beyond problem prevention – create new opportunities from continuous improvement  (Think 3M, or the Amazon example above.)

Andy and the team could have stopped at Level 3, but instead, they did an internal assessment of their core competencies, which obviously included retail. But when the company dug deeper, it realized that it also had a competency in running infrastructure, backed by an extremely strong technology team.  They were moving up to Level 5. By recognizing that others likely shared their need, they were thinking up to Level 8. The result was a new business opportunity – a breakthrough solution — now worth tens of billions of dollars.

For more, watch my interview with Amazon’s Andy Jassy.