In a letter published yesterday, Jeff Bezos announced he is stepping down as Amazon CEO later this year. Andy Jassy, Amazon’s head of cloud computing will be taking the helm.
Jeff Bezos founded the eCommerce retailer 27 years ago in a garage when it “was only an idea” and people were asking him “What’s the internet?”.
Leveraging the power of the internet and thanks to his vision on what makes a successful company, today Amazon is the world’s largest online retailer of consumer products and a leader in the cloud computing segment.
With a market value of 1.6 trillion dollars, Amazon is in the Top 5 big tech US companies and it doesn’t look like it’s going to slow down.
“Being the CEO of Amazon is a deep responsibility, and it’s consuming. When you have a responsibility like that, it’s hard to put attention on anything else”, he writes. In his new role as Executive Chair of the Amazon Board, Jeff Bezos will still watch closely over the company but will dedicate his time and energy to other Amazon initiatives such as the Day 1 Fund, the Bezos Earth Fund, Blue Origin, The Washington Post “and my other passions”.
As Jeff Bezos steps down as CEO of the world’s largest eCommerce retailer, let’s take a look at what he leaves behind, his legacy.
Jeff’s business strategy is his legacy.
Are you looking to improve your business strategy?
Here are eight essential factors of Jeff’s successful business strategy for Amazon:
1. Move quickly to solidify and extend your current position
In 1997, with big tech companies like Microsoft and AOL expressing interest in online commerce, Bezos saw a window of opportunity.
“Our goal is to move quickly to solidify and extend our current position while we begin to pursue online commerce opportunities in other areas. We see substantial opportunity in the large markets we are targeting”, he writes in his 1997 shareholder letter. I remind you that, at the time, Amazon was still selling books.
2. Set out to delight your customers
Jeff believes complaining customers are a company’s most valuable resource for growth. They reveal blind spots that employees or managers could not otherwise identify giving the business the opportunity to improve and develop.
Amazon’s focus on customer obsession is one of its underlining factors for success.
3. Make bold investment decisions
At the heart of Amazon’s investments is the customer.
Every investment that Amazon makes is to further improve customer satisfaction and experience by developing systems, infrastructure and service.
4. Become aware of proxies
In his 2016 shareholder letter, Jeff talks about the danger of allowing proxies to gain power within the company.
Proxy is something or someone who acts as a substitute. This is when the process has become more important than the result and replaced it. It’s the process as a substitute for the outcome.
When someone in the company starts saying This is how we’ve always done it, it’s time for a change.
5. Your employees must think like an owner
Jeff acknowledged early on that hiring the right people was paramount if Amazon was to be successful and achieve its objectives. “Setting the bar high in our approach to hiring has been, and will continue to be, the single most important element of Amazon.com’s success.”
The retailer behemoth compensates its employees in Amazon stock than cash because becoming stockholders changes their mindset.
6. Embrace external trends
Businesses that adapt to the latest technological trends and customer behaviour changes evolve and survive. Businesses that resist change, don’t survive.
His advice to every company founder is to acknowledge powerful external trends like AI and machine learning and embrace them quickly.
7. Make high-quality decisions fast
Large organizations like Amazon have many things going for them with one downside: they are slow at making decisions.
Jeff didn’t allow this to happen to Amazon.
He created a system of making high-quality decisions fast which relies entirely on the Day 1 mindset. Day 1 companies are startups, nimble and agile, bursting with vitality. Day 2 companies are already heading for the end. Amazon is a Day 1 company.
8. Implement high standards
Amazon’s obsession with customer satisfaction has led to a number of outstanding product innovations (Alexa, AWS) and excellent customer experience (Amazon Go, 1-click purchases).
What does it take to achieve such results? Implementing high standards in the company.
At the core of Amazon’s supremacy is innovation. So it’s no surprise that Jeff Bezos ends his letter to the employees with an encouragement to continue down the path of innovation.
Keep inventing, and don’t despair when at first the idea looks crazy. Remember to wander. Let curiosity be your compass. It remains Day 1.
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