Build high standards into company culture
Jeff Bezos letter to shareholders 2017
KEY MESSAGE 20/22
Jeff Bezos has been writing a letter to shareholders since 1997 and looking at all if them gives an insight to the organisation and a masterclass in leadership. This is a series of short blogs that gives you a snap shot / key takes outs of each letter, along with links to them all.
“How do you stay ahead of ever-rising customer expectations? There’s no single way to do it — it’s a combination of many things. But high standards (widely deployed and at all levels of detail) are certainly a big part of it. We’ve had some successes over the years in our quest to meet the high expectations of customers. We’ve also had billions of dollars’ worth of failures along the way. With those experiences as backdrop, I’d like to share with you the essentials of what we’ve learned (so far) about high standards inside an organization.”
Great companies, like Amazon, are built on high standards.
Bezos argues that despite common thinking that high standards are intrinsic to certain people, high standards can be taught in virtually any domain. And if a company wants to stay competitive, it must teach high standards.
As you grow, you need to make an effort to not just get your own standards up, but to build an organization that can develop and recruit new people with high standards.
Today, when people are shopping, they can read reviews of items, compare prices across stores, and research products from their mobile devices with unprecedented ease. The customer is more empowered than ever, and as a retailer, that means you’re never safe from your competition.
Big companies like Amazon are especially at risk in this kind of environment. They need to get technologically ahead of more nimble startup competition — who often have hyperfocus, and little to lose — and do it with far larger organizations.
To stay competitive, companies need to ensure that standards internally don’t stagnate, but constantly rise along with the customer’s expectations.
Two things hinder the ability to cultivate high standards, according to Bezos:
- Scope: Employees are able to recognize high quality in the field, but they have an incorrect idea of how long it’ll take to reach that level themselves
- Recognition: They lack the ability to recognize high quality in the field
Whether it’s creating a great deck or responding perfectly to a customer question, a major prerequisite of high standards is understanding how difficult it will be to achieve greatness.
For Bezos, it’s possible to become great at virtually anything, if you can both recognize the level you need to get to and accurately estimate how long it will take to make it.
“To achieve high standards yourself or as part of a team, you need to form and proactively communicate realistic beliefs about how hard something is going to be,” writes Bezos.
The second ingredient is recognition, or being able to understand the difference between bad, good, and great.
If you have leaders who can help the people on their teams both recognize quality and understand scope, Bezos concludes, you will end up building better products and services for your customers.
link to all letters to shareholders
- 1997: Bring on shareholders who align with your values
- 1998: Stay terrified of your customers
- 1999: Build on top of infrastructure that’s improving on its own
- 2000: In lean times, build a cash moat
- 2001: Measure your company by your free cash flow
- 2002: Build your business on your fixed costs
- 2003: Long-term thinking is rooted in ownership
- 2004: Free cash flow enables more innovation
- 2005: Don’t get fixated on short-term numbers
- 2006: Nurture your seedlings to build big lines of business
- 2007: Missionaries build better products
- 2008: Work backwards from customer needs to know what to build next
- 2009: Focus on inputs — the outputs will take care of themselves
- 2010: R&D should pervade every department
- 2011: Self-service platforms unlock innovation
- 2012: Surprise and delight your customers to build long-term trust
- 2013: Decentralize decision-making to generate innovation
- 2014: Bet on ideas that have unlimited upside
- 2015: Don’t deliberate over easily reversible decisions
- 2016: Move fast and focus on outcomes
- 2017: Build high standards into company culture
- 2018: Wandering is an essential counterbalance to efficiency