Wandering is an essential counterbalance to efficiency

amazon bezos innovation

Wandering is an essential counterbalance to efficiency

Jeff Bezos letter to shareholders 2018

KEY MESSAGE 22/22

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.

“Market research doesn’t help. If you had gone to a customer in 2013 and said ‘Would you like a black, always-on cylinder in your kitchen about the size of a Pringles can that you can talk to and ask questions, that also turns on your lights and plays music?’ I guarantee you they’d have looked at you strangely and said ‘No, thank you.’”

Takeaway

Businesses are great at putting plans together. When they know exactly what needs to be built, many companies can execute on their ideas.

Where it gets messier and riskier is when you don’t know exactly what should be built. This is the most fertile and profitable territory for a business, according to Bezos.

To him, wandering — away from the obvious, away from old ideas — is key to Amazon’s success.

Challenge

When you’re a small company, virtually everything you try is an experiment. The bigger you get, though, the more you have to lose, and the less tolerant to risk-taking you can become.

For Bezos, it’s not enough for big companies to prioritize taking risks and “wandering” as much as smaller, more nimble companies do.

It’s that big companies need to scale everything up, “including the size of their failed experiments,” he writes.

“Wandering” isn’t an efficient practice for a business, but it isn’t random. It requires a culture of builders. It requires a deep customer obsession. And it requires an understanding that you should always listen to the people who use your products, but you ultimately must imagine and invent on their behalf. This is inevitably risky. But great companies, he argues, must take those risks.

Solution

For Jeff Bezos, the key to staying innovative and growing is constantly urging employees to “wander” — to pursue creative ideas that, while they might sound odd or useless today, stand to deliver extraordinary value to your customers.

Some experiments will fail: the bigger you are, the bigger your failures should be. But one big success can often make up for all those failed experiments, and more.

“Wandering is an essential counter-balance to efficiency,” he writes. “You need to employ both. The outsized discoveries – the ‘non-linear’ ones – are highly likely to require wandering.”

Bezos traces Amazon’s history of hiring “builders” back to the early days of the company. Year by year, Amazon pushed the online retail space forward, and it grew from an online bookstore to a big box retail store competitor to a global e-commerce juggernaut.

That constant innovation, according to Bezos, came mostly out of Amazon’s willingness to “wander” — to imagine and build the new things that customers might love.

For proof, he points to Amazon Web Services. Today a pillar of Amazon’s business, AWS was at one point nothing more than a hunch. No customer asked for it, but it found immediate demand upon its release. “That same pattern has recurred many times,” he writes, citing Amazon’s development of tools like DynamoDB, Amazon Aurora, ElastiCache, Amazon Go, and the Amazon Echo.

“No customer was asking for Echo,” Bezos writes, “This was definitely us wandering.”

Market research won’t tell you about most of the great inventions that your customers want, Bezos warns, but that doesn’t mean you should ignore them. “It’s critical to ask customers what they want, listen carefully to their answers, and figure out a plan to provide it thoughtfully and quickly (speed matters in business!). No business could thrive without that kind of customer obsession.”

But while customers can tell you what they want, they can never tell you what to build.

“The biggest needle movers will be things that customers don’t know to ask for. We must invent on their behalf,” he says. “We have to tap into our own inner imagination about what’s possible.”

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

 

Author: Andrew Mann

Managing Partner at NorthBailey. Having had senior marketing & insight roles at Tesco, Sainsbury's, Asda, Coop and M&S, I'm now using my experience & network to solve strategic marketing problems for NorthBailey clients

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