In his 1997 shareholder letter, Jeff Bezos issued a manifesto “It’s all about the long-term” where he laid out his approach to business and to running Amazon. He pledged that decisions would be made with a long-term lens and with a focus on market leadership.
This manifesto has been included in every single shareholder letter for the last 20 years! After reading these letters, it is clear that the fundamentals of how Amazon does business remain the same. Talk about commitment and consistency.
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Setting the bar high on hiring has been the single most important element of Amazon’s success. During the interview process, Amazon asks each interviewer to consider three questions before making a hiring decision:
Bezos offers a set of guidelines for how to make decisions at high-velocity:
Many large companies fail to launch new businesses from scratch because of the patience and nurturing required. One of Amazon’s competitive advantages is its culture which is supportive of small businesses with large potential.
While Amazon’s culture demands that these businesses be high potential and differentiated, it does not require them to be large the day they are born.
While Amazon takes financial outputs seriously, 100% of the company’s time is focused on inputs. This is because these inputs are controllable and are the most effective way to maximize financial outputs.
From the outset, Amazon’s goal was to build the world’s most customer-centric company. Bezos would constantly remind employees to wake up every morning terrified… not of the competition, but of Amazon’s own customers.
Customers are fickle; they are loyal to a company until a competitor offers a better service. Amazon designed its core value proposition around keeping customers happy by constantly offering more selection, better convenience, and lower prices.
In the early days of Amazon, Jeff Bezos, founder and CEO, instilled the following rule:
He wasn't skimping on catering - instead, he purposefully wanted to create teams that were efficient.
Narrative structure is the way forward in the modern meeting environment.
Amazon does things differently. At the start of each meeting, each participant reads a narratively-structured six-page memo. This memo doesn’t carry the writer’s name. In many cases, its creation is a team effort.
The idea is to create a study hall environment at the beginning of the meeting. Everyone sits in silence to read and absorb the ideas tucked away in the memo’s narrative. Then, they start the meeting in earnest by jumping straight into the discussion.
That’s the key difference that memo culture offers. Meetings no longer involve one person standing in front of a group and presenting a bunch of dry facts. Instead, participants extract context and meaning from the memo, as well as key data.
"Most decisions should probably be made with somewhere around 70% of the information you wish you had. If you wait for 90%, in most cases, you're probably being slow."
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