Build high standards into company culture

Build high standards into company culture

Jeff Bezos letter to shareholders 2017

KEY MESSAGE 20/22

“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.” 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.

Takeaway

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.

Challenge

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.

Solution

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

Jeff Bezos Letter to Shareholders 1997

• 1998: Stay terrified of your customers

Jeff Bezos Letter to Shareholders 1998

• 1999: Build on top of infrastructure that’s improving on its own

Jeff Bezos Letter to Shareholders 1999

• 2000: In lean times, build a cash moat

Jeff Bezos Letter to Shareholders 2000

• 2001: Measure your company by your free cash flow

Jeff Bezos Letter to Shareholders 2001

• 2002: Build your business on your fixed costs

Jeff Bezos Letter to Shareholders 2002

• 2003: Long-term thinking is rooted in ownership

Jeff Bezos Letter to Shareholders 2003

• 2004: Free cash flow enables more innovation

Jeff Bezos Letter to Shareholders 2004

• 2005: Don’t get fixated on short-term numbers

Jeff Bezos Letter to Shareholders 2005

• 2006: Nurture your seedlings to build big lines of business

Jeff Bezos Letter to Shareholders 2006

• 2007: Missionaries build better products

Jeff Bezos Letter to Shareholders 2007

• 2008: Work backwards from customer needs to know what to build next

Jeff Bezos Letter to Shareholders 2008

• 2009: Focus on inputs — the outputs will take care of themselves

Jeff Bezos Letter to Shareholders 2009

• 2010: R&D should pervade every department

Jeff Bezos Letter to Shareholders 2010

• 2011: Self-service platforms unlock innovation

Jeff Bezos Letter to Shareholders 2011

• 2012: Surprise and delight your customers to build long-term trust

Jeff Bezos Letter to Shareholders 2012

• 2013: Decentralize decision-making to generate innovation

Jeff Bezos Letter to Shareholders 2013

• 2014: Bet on ideas that have unlimited upside

Jeff Bezos Letter to Shareholders 2014

• 2015: Don’t deliberate over easily reversible decisions

Jeff Bezos Letter to Shareholders 2015

• 2016: Move fast and focus on outcomes

Jeff Bezos Letter to Shareholders 2016

• 2017: Build high standards into company culture

Jeff Bezos Letter to Shareholders 2017

• 2018: Wandering is an essential counterbalance to efficiency

Jeff Bezos Letter to Shareholders 2018