There may be no single formula for success, but Jeff Bezos’s annual letter to stockholders comes darn close.
Few figures have captured our attention the way Amazon founder and CEO Jeff Bezos has. In just under 23 years, Amazon’s revenue has soared from $500,000 to $178,000,000,000, from nine employees to over 560,000, and its stock has increased 1,000 fold since its IPO. You can’t argue with that sort of success. But trying to put it into a formula is somewhat ludicrous.
I’m always leery of reducing anything so complex to a simplistic set of rules. Still, there’s much we can learn from Bezos’s rise to the richest person in the world and Amazon’s spectacular growth.
Some of those lessons are captured in his latest letter to shareholders in Amazon’s annual report, which at times reads more like a Dear Abby for struggling entrepreneurs than a CEO’s update.
In the letter, Bezos doled out his usual pearls of wisdom. I’m especially drawn to what he has to say because it speaks directly to what I believe to be the most important tasks of being a leader.
A few things are clear.
1. Divine Discontent
First, Bezos has always been unyieldingly customer focused. I love how he repeatedly refers to what he calls “divinely discontented” customers. What a wonderful way to look at the friction and discomfort caused by customers who are always demanding more, no matter how much time and effort a company puts into its products and services.
Although Bezos begins his letter by talking about how Amazon has ranked in the No. 1 spot for customer satisfaction for many years in a row in both the U.S. and U.K., he then quickly follows up with the quote: “One thing I love about customers is that they are divinely discontent.” You can discount his obsession with the customer by saying that it’s easy for him as CEO to detach from the trenches, where dealing with customers can be absolute tedium.
Now you can use the power of established online marketplaces to grow your brand and sales, while streamlining and simplifying your business processes.
Bezos has been just as obsessed with customer focus from the earliest days of Amazon. In an early interview, after going public 20 years ago, Bezos stated:
“We have a relentless focus on customer service. That’s even more important online than in the physical world. If you make a customer unhappy in the physical world, they will tell five people. Online they can tell 5,000.”
2. Ideas Are Plenty
Second is Bezos’s focus on operations and execution. Again, going back to Amazon’s early beginnings, Bezos is a firm a believer that “Ideas have very little value in business and what turns out to have huge value is execution.”
Bezos is utterly transparent in detailing his own weaknesses in operations and execution, which he had to work on in order to lead and grow Amazon. In my own experience, I’ve found that the ability to keep one foot in a vision of the future and one firmly planted in the exceptional execution of the present is among the most important skills for a leader, especially a CEO, to develop.
3. Nature or Nurture?
The third point speaks to the quintessential question at the core of all hiring, “Are skills intrinsic or teachable?” Most of us would prefer to hire someone who has all of the requirements for the job. After all, training, mentoring, and ramping up all take time.
Bezos does not discount the inherent capabilities of some people and uses a wonderful example from basketball to illustrate–you can’t teach height–however, he is unwavering in his conclusion that an organization must focus on teaching skills as a core competency. In fact, much of his letter is dedicated to the topic of learning to do a handstand (yes, you’ll just have to read it!).
So few organizations have the sort of obsession with teaching and learning that Amazon does–even if that learning falls well outside of the scope of the employee’s responsibilities and career path within Amazon. The plain truth is that if you invest in training and teaching, it becomes the single most important determinant of your culture. It creates a culture in which learning, improvement, and growth are an expected part of everyone’s journey.
4. Set the Bar Really High
Each of these first three points have been critical to Amazon’s success and are well worth paying attention to in your own organization. But it’s the fourth point that contains the gem I alluded to in the headline of this column and which, in my mind, is the exclusive purview of the CEO to consistently reinforce throughout all phases of a company’s life cycle.
It is utterly simple and straightforward, and it is the single most important task of every leader: “High Standards.” Bezos’s letter is littered with references to the importance of high standards, how they are teachable, and why they are the core differentiator of a successful organization.
One of Amazon’s Leadership Principles puts it in very blunt terms: “Insist on the Highest Standards. Leaders have relentlessly high standards–many people may think these standards are unreasonably high.”
I’d go so far as to say that if your standards are not considered unreasonable then they are simply not high enough. A leader’s role is to stretch people beyond their perceived limitations and to take them to places that they never would have thought to, or could, go on their own. We respect and admire leaders who do this because those are the leaders who ultimately help us grow. In fact, the greatest joy of leadership is in seeing the impact you can have on people just by asking them to do better. Strike that, expecting them to do better.
Bezos puts it in very direct terms:
“…a culture of high standards is protective of all the ‘invisible’ but crucial work that goes on in every company. I’m talking about the work that no one sees. The work that gets done when no one is watching. In a high standards culture, doing that work well is its own reward–it’s part of what it means to be a professional.”
So, there you have it. Is it a formula for success? If only it were that simple. What these four lessons do provide is a foundation that is, at best, necessary but insufficient. However, what I can virtually guarantee are two things: Without these cultural cornerstones, your chances of success fall dramatically, but with them firmly in place, you at least have a foundation to achieve the extraordinary.
This article was originally published on Inc.
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Tom Koulopoulos is the author of 10 books and founder of the Delphi Group, a 25-year-old Boston-based think tank and a past Inc. 500 company that focuses on innovation and the future of business. He tweets from @tkspeaks.