A few months ago Amazon reached what its founder and CEO Jeff Bezos said was a milestone. The retailing giant, associated with books, then music and video, now has more than 20 million products in stock and a majority of them are non-media goods: drills, dress shoes, tennis rackets and almost anything else that a human can ship. Adults may still mentally link Amazon with Barnes & Noble , but to teenagers Amazon is now synonymous with the word “store”.
This might be Bezos greatest accomplishment. In officially transforming Amazon from an online bookstore that sells other stuff to a retailerand business services providerthat once sold mostly books, he has taken one of the original Internet bonanzas and created a success story all over again.
Bezos, age 48 years old is one of the 30 richest men in the world, any yet he still runs around Amazon headquarters like a start up boss trying to make his first payroll. He is a happy, giddy person who still has a passion and love for what he is doing. He has 56,000 employees and 164 million customers.
“Jeff Bezos managers at Amazon find him formidable enough. But the figure that overwhelms their lives goes by the internal nickname the empty chair. Bezos periodically leaves one seat open at a conference table and informs all attendees that they should consider that seat occupied by their customer, the most important person in the room. If the empty chair is the ultimate boss at Amazon, then Bezos is its billionaire enforcer, the guardian of what he calls the culture of metrics that tries to give that inanimate object a loud, clear voice. Amazon tracks its performance against about 500 measurable goals. Nearly 80% relate to customer objectives.”
Bezos is even stricter about what customers dont want. They hate delays, defects and out-of-stock products, so the metrics patrol at Amazon constantly tracks such numbers, looking to make them as rare as possible. For Bezos a data-driven customer focus lets him take risks to innovate, secure in the belief that hes doing the right thing. We are comfortable planting seeds and waiting for them to grow into trees, says Bezos. We dont focus on the optics of the next quarter; we focus on what is going to be good for customers.
Amazon, started in a garage and nurtured in a rundown stretch of Seattle waterfront, is now settling into its fifth headquarters, in Seattles elegantly rehabbed South Lake Union district. The companys new campus consists of nearly a dozen shiny glass and steel buildings, complete with courtyards, cafes, restaurants and a little bit of public artwork on display. Jeff Bezos should be there a long time. He just turned 48 in January and could easily run Amazon another two decades. Thats good for stability. It could be a challenge in terms of retaining other executives with aspirations of becoming a CEO. Bezos says he knows when to avoid meddling so that his project leaders can find their own paths. Yet its congenitally hard for founders to be hands-off for longan effort to bring in a chief operating officer to work directly under Bezos didnt work out a decade ago.
In some ways this is the area Bezos least needs to worry about: Last December he was very proud that Amazon was able to make good 99.99% of the time on its promises to get packages to customers before Christmas. No small feat (just ask Best Buy ). To Bezos, though, this also means they came up short one time in 10,000. Were not satisfied until its 100%.
Jeff Bezos Top ten Maxims, Decoded
- Base your strategy on things that wont change.
Selling lipstick, tractor seats, e-book readers and data storage are all part of one big plan with three big constants: offer wider selection, lower prices and fast, reliable delivery.
2. Obsess over customers.
Early on Bezos brought an empty chair into meetings so lieutenants would be forced to think about the crucial participant who wasnt in the room: the customer.
3. We are willing to be misunderstood for long periods of time.
If the new initiatives make strategic sense to him, a five-to-seven-year financial payoff is okay.
4. There are two kinds of companies: those that try to charge more and those that work to charge less. We will be the second.
Frugality is one of eight official company values. The reward for putting up with cheap office furniture: a $90 billion stock market valuation and 35% revenue growth.
5. Determine what your customers need, and work backwards.
If customers dont want something its gone, even if that means breaking apart a once powerful department.
6. Our culture is friendly and intense, but if push comes to shove well settle for intense.
Data reigns supreme at Amazon, particularly head-to-head tests of customers reactions to different features or site designs. Bezos calls it a culture of metrics. With dozens of these gladiator-style showdowns under way each week, there isnt much time for soothing words or elaborate rituals of social cohesion.
7. If you want to be inventive, you have to be willing to fail.
Bezos regards such stumbles as a part of life, as long as Amazon can learn something useful.
8. In the old world, you devoted 30% of your time to building a great service and 70% of your time to shouting about it. In the new world, that inverts.
Bezos believes old-fashioned word-of-mouth has become even more important in the digital ageso he prefers low-key process improvements that are meant to get happy customers buzzing.
9. Everyone has to be able to work in a call center.
Complaints can be devastating in the age of viral tweets and blogs. Bezos asks thousands of Amazon managers, including himself, to attend two days of call-center training each year. The payoff: humility and empathy for the customer.
10. This is Day 1 for the Internet. We still have so much to learn.
Bezos first made that observation in 1997, in his initial letter to Amazons shareholders. He hasnt budged from it. He still talks about the Internet as an uncharted world, imperfectly understood and yielding new surprises all the time.