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Insights on Amazon Innovation & Success



” You have to be willing to be misunderstood if you’re going to fully innovate ” – Jeff Bezos, CEO, Amazon

With this Jeff Bezos identifies the most essential attitudes, practices, and culture of a successful and growing company. As he says, ” I’ve often struggled to put a name to the unique chemistry of a startup, but it captures beautifully all of the trials, tribulations, and magic of the entrepreneurial spirit “. He calls it being a Day 1 Company. He is so passionate about the importance of staying a Day 1 Company, the building he works in is called Day One ! According to Bezos, ” a Day 1 Company’s obsessive goal should be to avoid becoming a Day 2 Company because of stasis, followed by irrelevance, then excruciating, painful decline, and finally death. And that is why for Amazon it is always Day 1 “.

In his recently released letter to stockholders (www.SEC.gov), Bezos highlights what’s needed to be a successful Day 1 Company –

1. Having True Customer Obsession

You can be competitor focused / product focused / technology focused / business-model focused / etc. But having an obsessive Customer Focus is by far the most representative of day one vitality. Customers  always want more, even when they report being happy and business is great. Even if they don’t yet know it, Customers want something better, and your desire to delight Customers will drive you to invent on their behalf.”  If you want to know if you’re a day one or day two company, just ask your customers – if you’re ready for the answer – and be prepared to do something more – sooner than later.

2. Resist Proxies / Recognize the Limits of Processes

This is extremely difficult since proxies are what every enterprise does when common sense or the need to meaningfully innovate isn’t occurring.  The biggest challenge to innovation in enterprises is the supposed safe and prescribed process, and outside of that, people have an excuse to absolve themselves of personal responsibility.  Because of this, Bezos is vigilant in recognizing the limits of processes – “ It’s not that rare to hear a junior leader defend a bad outcome with something like, “ Well, we followed the process ”.  A more experienced leader will experiment as an opportunity to investigate and improve the process. The process is not the thing. It’s always worth asking, do we own the process or does the process own us ?  In a Day 2 Company, it’s frequently the latter”.  He further added, “ As companies get larger and more complex, there’s a tendency to manage to proxies or processes. This comes in many shapes and sizes, and it’s dangerous, subtle, and very Day 2. A common example is process as proxy… if you’re not watchful, the process can become the thing. This can happen very easily in large organizations. The process becomes the proxy for the result you want. You stop looking at outcomes and just make sure you’re doing the process right ! ”

3. Embrace External Trends

It’s amazing how people in enterprises look directly into a new trend without a clue as to what they’re seeing. It’s like looking at a tsunami rolling in on a bright sunny day and wondering where to pitch your umbrella for maximum shade. “ These big trends are not that hard to spot, but they are frequently difficult for enterprises to embrace. ” Easy to say – very hard for a Day 2 Company to do because of the difference between a Day 1 and Day 2 Company is attitude toward risk. When you’re entrepreneurial you have this attitude of experiment, fail, get back up, repeat. Typically in enterprises if you experiment and fail, people frequently are fired. Because of this there is typically little experimentation on a potentially disruptive initiative, but rather continue doing incremental or sustainable innovation since that is what people are familiar with, within their comfort zone, and is tradition.  From this it is easy to understand why disruptive innovation in an enterprise is very challenging.

4. High Velocity Decision Making

Jessica Stillman does a great job describing it in her article, Here’s How Amazon’s Jeff Bezos Makes Great Decisions, Super Fast.  The bottom line is, when it comes to decisions, Bezos emphasizes speed over perfection – “…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. Plus, either way, you need to be good at quickly recognizing and correcting bad decisions. If you’re good at course correcting, being wrong may be less costly than you think, whereas being slow is going to be expensive for sure”.   

In conjunction with this, it’s critical for leaders to ” disagree and commit to save a lot of time. If you have conviction on a particular direction even though there’s no consensus, it’s helpful to say, Look, I know we disagree on this but will you take a calculated risk with me on it ? ” – since no one knows the answer.

It’s Day 1 Every Day ….

Since enterprises are either in ” Day 1 ” mode or the “ excruciating, painful decline ” of Day 2 “, where is your organization?  If not Day 1, contact a company in the Innovation ecosystem about how to make it happen.

Nov 18, 2018  from an article by Tom Koulopoulos     –     CAIL Innovation commentary

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