As part of my “quarantine cleanup” I realized that there is a whole stack of books that I’ve read, highlighted and taken notes in … but never revisited. So I figured that it would be helpful for me to dive back into them and extract some of those key lessons.
Rereading a book read a couple of years ago is an interesting process. The person re-reading is (hopefully) not the same person who read it the first time. We all change. Experiences shape us. Time passes. We grow. We fall down. We learn some hard lessons and we keep on going. I don’t note the date that I read a book, but I am certainly going to do that now.
The first of the foremat that I’m trying is to distill the lessons / personal notes / highlights of the book into ten lessons. If you’re looking for a better version of this, you can read fellow-Canadian Shane Parrish’s summary here.
But this book was written in 2013. As was the review. Seven years later, the context is different. Amazon has grown from successful startup to economic monolith - the acquisition of Whole Foods, the proliferation of AWS, the Department of Defence contracts and - of course - the COVID-19 pandemic has pushed a lot of economic and cultural power to Amazon.
So perhaps it’s interesting to view a book written almost a decade ago through the lens of today.
1. BUILD YOUR TEAM ON POTENTIAL, NOT PAST EXPERIENCE
Miller knew nothing about toy retailing, but in a pattern that would recur over and over, Bezos didn’t care. He was looking for versatile manager - he called them “athletes” - who could move fast and get big things done.
I think that we can all agree that the hiring process in most organizations is broken. They defer to past experience. To people exhibiting a specific mold or pattern throughout their career. Someone worked at Nike? Holy shit! They must be amazing. That means that you’re relying on another company’s recruiting department from a couple of years ago to filter your candidates.
Don’t hire for past experience. Hire for who can deliver future results. Do the hard work to find, test and develop talent. Hire for values like hard work, tenacity, openess to learn and politness. Teach the skills like sales, marketing, customer service.
2. EXPLICITLY STATE YOUR VALUES
The leadership team agreed on five core values and wrote them down on a whiteboard in a conference room: customer obsession, frugality, bias for action, ownership and high bar for talent. Later Amazon would add a sixth value, innovation.
Think about your values. Bat them around. Poke holes in them. And then write them down. Start wtih the smallest circle - yourself. Define who you want to become. What’s non-negotiable and what’s flexible. As Pete Carroll advised Steve Kerr before his first season as an NBA head coach - ask what kind of coach you want to be. A lot of us default to skating through life chasing a position, partner or goal without thinking what kind of person you want to be at work, in a relationship or on the field.
Are you someone who succeeds at any cost, or someone who thinks a strong reputation is required for long term success? Are a romantic partner who looking for a short term or long term relationship? Are you the type of player who puts their body on the line for the team, or prioritizes their long term health even if it means not catching that?
There are no right answers. But asking the questions may shake you out of your comfort zone to make your default choices more intentional.
3. FOCUS ON WHAT’S IMPORTANT AND FORGET MARKET PRESSURE
Bezos insisted the company need to master anything that touched the hallowed customer experience, and he resisted any efforts to project profitability. “If you are planning for more than twenty minutes ahead in this kind of environment, you are wasting your time,” he said in meetings.
Amazon had pressure to deliver for the market. The people betting on your success / failure with minimal skin in the game. They don’t actually care if you succeed or not. They care if you’re predictable. They care if they can make money through investing in your business. And they judget success measured in fiscal quarters, not over years or decades.
If you’re confident in your approach, your focus and your team, don’t focus on selling a story to the market. Just represent yourself and ingore the noise. Masai Ujiri - President of the 2019 NBA Championsip Toronto Raptors - provided great insight on how he does this. After trading away the face-of-the-franchise in DeMar DeRozan to stack up for a championship run, he knew his decisions were going to be second guessed and overanalyzed in the press.
So what did he do? He made a deal with himself that he would not read any press on the trades until 6 months later. A year later, the trades he engineered help situate the team to bring the first NBA championship to Canada. Ever.
4. WHEN YOU OUTSOURCE, YOU’RE THINKING SHORT TERM.
By relying on Amazon, the retailers (AOL, Circuit City, Borders) delayed a necessary education on an important new frontier and ceded the loyalty of their customers to an aggressive upstart.
Outsourcing knowledge / skill / expertise is common. Especially for growing companies. I get it. You can’t be great at everything. But be acutely aware that when you are outsourcing something that you are consciously creating a potential long term disadvantage. Put a trigger or exit strategy in place. Have options. Don’t be locked into one supplier/[partner.
You’ve got to decide what you’re great at. And what you’re not. But don’t let your weaknesses become the blindspot that your competitors can leverage to their advantage.
5. WHY INNOVATE INSIDE YOUR ORGANIZATION WHEN YOU CAN CREATE A NEW ONE?
Great companies fail not because they want to avoid disruptive change, but because they are reluctant to embrace promising new markets that might undermine their traditional businesses and that do not appear to satisfy their short-term growth requirements.
Set up autonomous organizations charged with building new and indepenedent businesses around the disruptive technology.
The Kindle was designed to kill Amazon’s core business - physical books. The business unit had a separate office. A separate staff. It was completely autonomous, clear of the previous politics, culture and baggage fo the previous organization. They had a clear mandate from the top and buy-in to make it happen. It was an monumental task - build the hardward, build the network and convince publishers to sell thousands of ebooks for $9.99.
Replicate the iPod model for books. A new unit, separate from the mothership, prevented the naysayers, the politics and the old thinking to pollute the opportunity. It cleared the path for the group to tackle the singular focus of bringing a new e-reader and it’s ecosystem to the market.
6. ALWAYS SEARCH FOR THE BEST TRUTH.
Jeff (Bezos) does a couple of things better than anyone I’ve ever worked for,” Rick Dalzell says. “He embraces the truth. A lot of people talk about the truth, but they don’t engage their decision-making around the best truth at the time.
There are many forms of truth. And the best truth shifts over time as more evidence comes to life. As we have experienced over the past months, science is a fluid and evolutionary process. More experience, more exposure and growing bodies of evidence fuel better insights. Better understanding. Better working knowledge.
We have to remember that almost all truth that we’re looking for - outside of the laws of physics - is a based on working information. As knowledge shifts, we have to be aware how our biases and our egos disrupt our thinking - prefering the secure to the uncertain. Prefering to confirm rather than question. Always search for the best evidence based truth, regardless of where it comes from.
7. NOT JUST COLD HARD DATA. ADD PERSONAL STORIES.
The company relies on metrics to make almost every important decision, such as what features to introduce or kill. Yet random customer anecdotes, the opposite of cold, hard data, also carry tremendous weight and can change Amazon policy.
Understanding the data as it sits in the current world is important. It’s the bedrock of solid decision making. That’s because for the majority of things (including fantasy football performance I might add), past behaviour is the most consistent predictor of future performance. But pure data does not predict the future. You need human stories and insights for two reasons: (1) to contexualize the reasons and colour behind the decisions that peopel are making, and (2) to sell it in.
People see numbers. But people remember stories. As rational and logical as we all try to be, our executive functions would prefer an idea with a personal story attached to it. It makes it real. It makes it relatable. It makes it memorable.
8. GOOD LEADERS HAVE AN OBLIGATION TO VOICE DISAGREEMENTS
Leaders are obligated to respectfully challenge decisions when they disagree, even when doing so is uncomfortable or exhausting. Leaders have convocation and are tenacious. They do not compromise for the sake of social cohesion. Once a decision is determined, they commit wholly.
Voicing disagrements is not easy. The social pressure to agree with the group is imprinted onto our very genetic code - it’s the programming that knows we survive better in groups than alone. But as a leader, it is not your job to be popular. It’s your job to put the organization on track for success. And to do so, you need to be searching for a correct solution, not a popular solution.
Disagreements make concepts stronger. Even if they’re wrong. By attacking an idea, it forces you to consider counterpoints. To call out the flaws in the logic. To identify previously unforeseen challenges. Even if the dissenting point of view turns out to be a red herring, it still provides immense value in the act of opening people’s minds to other possibilities.
9. HAVE A LONG VIEW. BUILD OVER DECADES, NOT YEARS.
If humans think long term, we can accomplish things that we wouldn’t otherwise accomplish. Time horizons matter, they matter a lot.
Amazon was founded 26 years ago. Bezos bet on the future of commerce being over the internet. He knew that he wanted to create the “Everything Store” but needed to start somewhere. He needed to start somewhere, so he chose books.
There were three million books in print worldwide - enough to leverage an infinite bookshelf that couldn’t be stocked in traditional retailers. That small slice of an advantage. He started with books, added in CDs, toys, then … everything else. It wasn’t overnight. It was bit by bit.
We often look at an overnight success and don’t recognize the hours, years, and decades behind their current trajectory. Build with the long view in mind, not the quick cashout. It’s the difference between building an audience on the hottest social media platform vs owning the relationship directly with them. The second is much more difficult in the short term, but will pay off whenever a platform changes/gets banned.
10. SMALL ADVANTAGES COMPOUND. CULTIVATE THEM.
Any process can be improved. Defects that are invisible to the knowledgable may be obvious to newcomers. The simplest solutions are the best. We don’t have a single big advantage. So we have to weave a rope of many small advantages. Amazon is still weaving that rope.
Amazon doesn’t have a single advantage - it’s had a lot of tiny advantages. A great reminder that there doesn’t have to be a silver bullet. There doesn’t need to be a single reason that you’re better than the competition. There can be a thousand tiny ones.
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As I comb through my notes from the book, there are certainly a lot of amazing tidbits, stories and lessons through three decades of Amazon. It’s great to understand the reasoning, difficulties and intentions behind some of their greatest hit and painful failures. I’m just excited to be priviledged enough to hold the opportunity to learn from them.
- Christian
