Jeff Bezos On Innovation: Five Big Takeaways
Jeff Bezos is about as close to Oz as the business world has right now. Despite being world’s richest man, and an omnipresent force in global commerce (as well as owner of one of America’s most important news outlets, The Washington Post), the founder and CEO of Amazon is approaching cipher-status when it comes to discussing the outlook for his business, or his plans for the future.
So when someone actually gets him to talk about how he does what he does, it’s worth taking note (kudos to editor Randall Lane at Forbes for a peek behind the curtain).
As you’d expect, the story has a lot of great background on his rise to the top, with some intriguing side-trips into Bezos’s interest in revolutionizing healthcare and advertising, etc, which makes reading the whole interview worthwhile.
But for most board directors, what’s probably most useful are the insights into how Bezos thinks about strategy and innovation, and structures his personal activities and those of the company to get done what he wants to get done. Here are five useful takeaways:
1. He’s Fixated on the Future, Not the Present: “I very rarely get pulled into the today,” Bezos tells Forbes. “I get to work two or three years into the future, and most of my leadership team has the same setup.”
“Friends congratulate me after a quarterly-earnings announcement and say, ‘Good job, great quarter,’ and I’ll say, ‘Thank you, but that quarter was baked three years ago.’ I’m working on a quarter that’ll happen in 2021 right now.”
2. He’s Built His Job Accordingly: To enable this future focus, Bezos, at least by his telling, has mastered the difficult art of working On the Business, not In the Business, decoupling his activities from day to day operations to facilitate idea generation. Other executives run the business, he says, “I come up with ideas. We could sit here with an idea, and I could fill this whiteboard in an hour with 100 ideas,” Bezos tells Forbes. “If I have a week with no brainstorming meetings, I complain to my office, like ‘Come on, guys, help me here.’ ”
3. He’s Systematic About Making Small Bets: According to Forbes, Bezos built his company with “multiple paths to yes,” allowing deeply decentralized decision-making that empowers literally hundreds of managers to green light incremental improvements that can be backed out of if they don’t work — what Bezos calls “two-way doors.” This allows for lots and lots of innovation in small steps while minimizing risks.
4. He Goes Slow On Big Bets: Bezos calls himself “chief slowdown officer” when it comes to trigger pulls on what he calls “one-way doors,” big, business-sized bets. His vetting system: He’s looking for a “differentiated idea” that can work at scale, and “even at substantial scale, it has to have good returns on capital.”
5. He’s Patient and Willing to Fail. The best example, says Forbes, is his huge bet on bringing the Kindle to market despite having little to no experience creating hardware. His rationale was that the company needed to build those muscles if it was going to keep its long-term options open. And while the Kindle never really became a runaway hit, and the Amazon Fire was a total bust, what they learned with those projects eventually led to the game-changing Alexa, arguably the most important advance in the way humans interact with computers since Apple rolled out the iPad and iPhone.
Taken together, it’s a pretty useful toolbox for any leader looking to structure their days—and their companies—to avoid the trap of everyday operations eating the future.
Read more: What Can Amazon Teach Boards?
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