Five “Bezos-isms” that Inspire me

Anyone that knows me knows I’ve always been very influenced and inspired by Amazon CEO, Jeff Bezos. I was lucky enough to meet him once, which is a story I told in my recent Keynote presentation to the Red Rock Leadership Forum in March – which you can view here:

In it I speak mainly about the importance of corporate values (a favourite topic of mine) and how – as Simon Simek explains in this TED video – while companies are usually focussed on telling customers about the what and the how of their business, those customers only want to buy the “Why”. That why is “Purpose” and is my addition to the previously Five Ps of Marketing. That business of Purpose is why we have invested so much in our Corporate Culture and Values .

JR 5 P's

But I also tell the story about how I once had the opportunity to speak with Jeff Bezos at a TED conference in Oxford a few years ago. After some initial clumsiness by me, we got talking and I happened to mention to him during our conversation that my team had coincidentally been in negotiations with his people to secure a licensing agreement and that the process was slow. Before I awoke the next morning, I had been copied on an email from Jeff to his Head of Corporate Services requesting an update.

JR at TED

This inspired me not only because of the excellent responsiveness it displays, but at a broader level it was a great example of a Leader “walking the talk”. Putting the Customer First is an essential Amazon value and it was clearly one Jeff himself personified.  In fact, I have learnt that Customer-centricity is obsessive at Amazon and Jeff used to bring empty chairs into early Amazon meetings to represent the unheard voice of the customer. The company now employs trained specialists who role-play innovation scenarios on behalf of the customer.  From that develops the first of 5 other important “Bezosisms” that have inspired me, and I hope inspire others:

  • Determine what your customer needs, and work backwards” – as a thought process this is a fantastic model to help strategy development. It has driven us in many of our most successful directions, including our recent move onto Jeff’s own Amazon Web Services platform to host cloud services for our customers.
  • Have backbone: disagree and commit” – Amazon is famous for its adversarial culture but any friction is purely in a good cause – to not accept too easily, to question everything and not to agree merely for the sake of being agreeable. As Business Insider describes it: “Bezos can’t stand ‘social cohesion,’ the cloying tendency of people who like to agree with each other and find consensus comfortable.” I’m a contrarian by nature, but agree wholeheartedly with this maxim!
  • Be Patient – “If everything you do needs to work on a three-year time horizon, then you’re competing against a lot of people”; the point being that very few people take the longer view and by so doing you are competing with far fewer people”. We certainly believe in playing the long game at Red Rock and are already looking to the next 5 years in our business planning.
  • Your margin is my opportunity” – Another way he has put it (as quoted in Forbes – number 4 ) is: “There are two kinds of companies: those that try to charge more and those that work to charge less. We will be the second.” With the business environment more dynamic today than it has ever been it is crucial not only to continually question your own model to ensure it offers the best value to your customer; it is also important to always scrutinise your competitor. Unless they are doing the same they will leave opportunity on the table ripe for the taking.  This ethic of constant scrutiny has definitely sharpened our approach.
  • Embrace failureI’ve written before about the problem that Australia has with failure. We have to learn to process it better. Jeff Bezos has famously said: “If you want to be inventive, you have to be willing to fail.” To understand this better, it is worth reading this blog post by Tren Griffen  about how Amazon practices “Optionality” as a rule – that small potential downside is worth massive potential upside. As Griffen puts it, “Harvesting optionality *requires* failure. It can’t be avoided since failure provides information that enable success.”

Which “Bezosism” have influenced you? If not Jess Bezos, which leader has the most impact on the way you do business?

 

We need a better climate for entrepreneurs in Australia

Last week I had an article published in the Rust Report about Australia’s attitude to innovation, risk and entrepreneurism:

Rust Report: Why are we taxing risk instead of rewarding it?

investorI urged the Federal Government to relax some of the tax rules around share options to encourage more investment and risk. The argument for this has been made most strongly by Business Spectator journalist Paul Wallbank in this article earlier this year: “Is Australia Open for Start-up Business“. I spoke to Paul on Twitter about the topic and he referenced a blog post he had also written about investment capital investment, entitled “Counting the Cost of Investors.” In it he wrote: “For founders, the tricky balance in raising enough money to achieve their objectives while not giving away a controlling interest.

He makes an excellent point about another general malaise in Australian Innovation – short-termism among the investment community. I agree with Future Fund Chairman David Gonski who told an Australian Securities and Investment Commission dinner last year that “Sadly, in Australia, we live in a world of Short Termism”. This is where we also differ from the far preferable climate in The Bay Area and Silicon Valley where companies are able to take a much longer view around building their product, proposition and customer base before being required to return gains. They also have far greater controls over their destiny – it is my undertanding that investors there prefer to advise more than control.

We need to give our entrepreneurs more room to move for them to succeed and without that room it is far harder to achieve what is already a difficult challenge.

As a post-script, this is an interesting article by Marc Andreessen about how the investment culture of Silicon Valley versus elsewhere in the US: Beware Non-Silicon Valley Investors.