Bezos measures amazon by free cash flow

Measure your company by your free cash flow

2001 : “Why focus on cash flows? Because a share of stock is a share of a company’s future cash flows, and, as a result, cash flows, more than any other single variable, seem to do the best job of explaining a company’s stock price over the long term.”

Takeaway

Because “a share of stock represents a share of that company’s future cash flows,” free cash flow is the best possible metric for understanding financial success as a business.

Free cash flow should be prioritized because it is pegged to your company’s value both today and in the future.

Challenge

It can be hard to prioritize free cash flow when public sentiment (especially stock prices) usually moves in line with revenues and profits. Few CEOs are able to hold their ground against the pressure of quarterly earnings results.

Communication is a critical (and often undervalued) way to highlight progress. While press releases and MD&A sections in SEC filings add some color to numeric results, they don’t usually allow much space for subtleties outside of their templates.

Solution

In Bezos’s original 1997 letter (discussed below), he made it clear to his new investors exactly how Amazon thought about free cash flow vs. GAAP accounting.

With each subsequent letter, he has enclosed a copy of that original letter to remind shareholders of Amazon’s outlook on this question.

For Bezos, focusing on free cash flow provides a clear method of valuing Amazon for internal planning purposes, as well as for investors.

The metric represents how much value each individual share of stock in a company has today and stands to have in the future.

“Ultimately, your determination of cash flow per share will be a strong indicator of the price you might be willing to pay for a share of ownership in any company,” he writes.

Over the years, Bezos’s constant advocacy for the idea of focusing on free cash flows has turned the idea into a more common and accepted view.

Jeff Bezos letter to shareholders 2001

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.

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

prioritise cash flow

“The year 2001 will be an important one in our development. Like 2000, this year will be a year of focus and execution. As a first step, we’ve set the goal of achieving a pro forma operating profit in the fourth quarter. While we have a tremendous amount of work to do and there can be no guarantees, we have a plan to get there, it’s our top priority, and every person in this company is committed to helping with that goal. I look forward to reporting to you our progress in the coming year.”

Takeaway

Focusing on free cash flow or otherwise giving your business some form of cash moat (whether through outside equity, debt stakes, or tight operations) will help ride out difficult times when customers aren’t buying and/or financing has dried up.

If you’re able to maintain composure while others fall, you have the opportunity to come out ahead and capture a much bigger market share.

Challenge

The dot-com bubble took down a slew of internet companies, including Pets.com and fashion site Boo.com. Amazon, too, nearly went bankrupt. The same happened in financial crisis of 2008/9 and in COVID pandemic 2020.

While the majority of tech upstarts folded during the crash, Amazon stayed afloat. Since March 2000, the company has grown about 20x in market value.

Solution

One reason that Amazon was able to ride out the downturn was the tight cash conversion cycle.

While some companies left inventory in stock for long periods of time, Amazon was always focused on minimizing this to a few days at most, and collecting payments from customers before paying suppliers. This avoided lag times and ensured that Amazon continued to have cash coming in while others were bleeding dry.

Prioritizing free cash flow and being extremely disciplined with their operating cash flows gave Amazon a sound foundation they could use to ride out tough times and ultimately come out ahead.

Jeff Bezos letter to shareholders  

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.

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

Build platforms on infrastructure that’s continually improving

The current online shopping experience is the worst it will ever be. It’s good enough today to attract 17 million customers, but it will get so much better. Increased bandwidth will result in faster page views and richer content. Further improvements will lead to ‘always-on access’ (which I expect will be a strong boost to online shopping at home, as opposed to the office) and we’ll see significant growth in non-PC devices and wireless access. Moreover, it’s great to be participating in what is a multi-trillion dollar global market, in which we are so very, very tiny. We are doubly-blessed. We have a market-size unconstrained opportunity in an area where the underlying foundational technology we employ improves every day. That is not normal.”

Jeff Bezos Letter to shareholders 1999 3/22

Takeaway

  • The biggest opportunities in tech are platform-driven.
  • When you build on an infrastructure that’s beginning to quickly develop and modernize, you reap the benefits of not just your own growth but also the growth of the infrastructure you’re building on.

Challenge

  • Building on established platforms is the easiest and most expedient route, but one with the least upside.
  • Established platforms offer the most integration, often have low barriers to entry, and have plenty of accumulated wisdom around them.
  • At the same time, their growth potential is often limited due to the high pace of technological innovation across industries.

Solution

  • With the rise of internet connectivity in the late 1990s, an increasing divide began to appear between industries. E-commerce, gaming, online financial services were industries where a strong footing established early could set the stage for huge growth.
  • While Bezos was helped by growth in the e-commerce field specifically, and in access to high-bandwidth connections more generally, he didn’t find himself there unexpectedly. Before Amazon, Bezos was vice president at the hedge fund D. E. Shaw & Co, where he saw the rise of the internet firsthand.
  • Bezos knew he wanted to build a technology company, and he consciously looked to hire the most talented infrastructure engineers he could find to build new solutions where none existed.
  • Building on a high-growth platform like Amazon did require a much higher degree of upfront investment in engineering and research, but on the long timeframe of technological improvement, it gives you a much higher chance of building a huge, long-term business.

Bezos masterclass in management through shareholder letters 1999 #3/22

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

Stay terrified of your customers

2. be afraid of your customers
keep customers by aligning with customers’ shifting needs. rather than be distracted by competitors.

If you don’t do everything in your power to align with customers’ shifting needs, and instead allow yourself to be distracted by competitors, you’ll quickly lose them.

“I constantly remind our employees to be afraid, to wake up every morning terrified. Not of our competition, but of our customers. Our customers have made our business what it is, they are the ones with whom we have a relationship, and they are the ones to whom we owe a great obligation. And we consider them to be loyal to us — right up until the second that someone else offers them a better service.” Jeff Bezos 1998

Takeaway

In business, the most important thing isn’t what your competition is doing. If you’re expending effort trying to follow your rivals’ every move, you’re losing the big picture.

Keeping pace with your customers is what will keep you informed, relevant, and competitive.

Challenge

Companies are usually wary of their competition.

Understanding where they stack up against rivals, particularly if they’re public and continually judged on relative value multiples like price to earnings (PE), is a key pillar of their business strategy. If they can come in top of class, it’s easier to attract investment.

But the issue with thinking like your rivals is that you start to make similar moves. In fast food, for example, McDonald’s, Burger King, Wendy’s, Chick-fil-A all start to blend together. The only ways to differentiate is to narrow down to price and brand. As competition heats up in these crowded areas, it’s increasingly difficult to gain an advantage.

Solution

Flip the focus inward and hone in on your customers. Obsess over their preferences, their shopping behaviors, the quality of their reviews. This will allow you to optimize product features and overall product mixes. You’ll be able to double down on what works and eliminate what doesn’t. If you have a self-service platform like Kindle, find out everything users are creating and where they’re hitting roadblocks.

This granular focus on your true partners will allow you to invent in ways you (and your peers) didn’t anticipate. You’ll begin to develop away from your rivals and stand apart from the pack. This is a core tenet of Bezos’ philosophy.

If you don’t do everything in your power to align with customers’ shifting needs, and instead allow yourself to be distracted by competitors, you’ll quickly lose them.

Bezos shareholder letters

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 that gives you a snap shot / key takes outs of each letter.

Link to all letters to shareholders

Jeff Bezos Letter to Shareholders 1997

links to all letters

  • 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

Wandering is an essential counterbalance to efficiency

“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.  Jeff Bezos letter to shareholders 2018

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.”

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. 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

Move fast and focus on outcomes

“Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.” Jeff Bezos letter to shareholders 2016

Takeaway

Companies that get complacent die.

Bigger companies are even more at risk because growth and scale make it harder to move quickly when you spot an opportunity.

To stay alive, big companies must strive to make decisions and act faster than startups.

Challenge

At Amazon, it is always Day 1— it’s a powerful refrain that has featured in every shareholder letter since the original.

Day 1 represents originality, enthusiasm, and an eagerness to delight customers.

Day 2, for Bezos, is a powerful concept that embodies everything he fears could happen to Amazon and that does happen to many large organizations.

It is the idea that all of the tools you used to grow, all of the processes you used to scale, and all of the work you did to get to where you are become the company’s undoing. People get stuck in their processes.

Day 2 is the failure to adapt. And the bigger an organization gets, the harder it needs to work to stave off complacency.

Solution

  1. measure yourself by your customers. They are always “beautifully, wonderfully dissatisfied,” in Bezos’ words, and if you focus on always trying to make them happier, it’s hard to go wrong.
  2. Bezos warns against allowing process to turn into proxy. When you abstract a task into a process, it’s easy to start managing to the process rather than to the outcome you want. Soon, you have people getting the wrong end result and justifying their actions by saying they “followed the process.”

Bezos suggests that you always keep one eye on the outcome, not whether someone has ticked off every box on a list of steps.

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. Links 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

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

how to get buy-in

5 fingers5 Steps to Get Buy-in for Your Next Innovation

Leadership Tip of week #129

adapted from HBR

Everyone wants innovation in their organisation, but getting a new idea implemented can be a challenge, especially when office politics are in play. When you’re trying to get approval for your latest innovation, follow these four steps.

1. be clear on the problem you are trying to solve: really understand the internal and customer problem you are trying to solve. this is 80% of the challenge

2. anticipate resistance. If you know what people might object to, you can plan how you’ll address those concerns.

3. understand what objections are truly about. For example, someone might say they object because of a publicly acceptable reason — say, the project is too costly — when their real concern is political, like they’re afraid their team will lose influence.

4. find a champion for the project. This should be a senior executive whose clout and expertise can help you move the project forward.

5. gather a critical mass of supporters. If you have a group of people who believe in the innovation enough to try it, you’ll have social proof that the idea is a good one.

Adapted from “How to Navigate the Politics of an Innovation Project,” by Brian Uzzi

Try Silence During Your Next Remote Brainstorm

brainstorm ideas 2

Try Silence During Your Next Remote Brainstorm

Leadership tip of the week #128

adapted from HBR

Research shows that embracing silence during a brainstorm helps teams produce significantly more — and higher-quality — ideas. Silent brainstorming can be particularly useful in remote meetings.

So what does it look like in practice?

  1. Starting with the meeting invite, make sure everyone understands the goals of the brainstorming session.
  2. At the beginning of your meeting, share a working document (such as a Google Doc or use Teams ) with key questions that need to be answered.
  3. Encourage all participants to contribute to the document for 10 to 20 minutes without talking. During this time, attendees can actively ideate and respond to each other in the document.
  4. The leader can also participate, providing direction and asking attendees to elaborate on specific ideas as they’re being formed.
  5. Once the silent phase of the brainstorm is complete, you can begin a discussion if your group is relatively small. If the group is large, you can end the meeting, review the document, and follow up with an email that shares conclusions and next steps. Or, you might consider sending out a quick survey where participants can react or vote on options to move forward.

A different approach to working on ideas but one that creates the workshop capability from before lock down and stops Zoom overload.

This tip is adapted from Break Up Your Big Virtual Meetings,” by Liana Kreamer and Steven G. Rogelberg

How to increase your versatility

darwin survival of fittest

How to increase your versatility

– the best leaders are versatile ones

Leadership tip of the week #127

adapted from HBR

Versatility is a key leadership trait.

Managers must have the capacity to read and respond to change with a wide repertoire of skills and behaviors.

So how can you actually build this ability?

  1. Start by soliciting feedback from trusted colleagues. Ask a simple question like, “What should I start doing, stop doing, or continue doing to be a more effective teammate?”
  2. You might also take a more systematic approach and complete a personality assessment to gauge your strengths and weaknesses.
  3. Follow up by asking colleagues if they agree with the results.
  4. Finally, learn some new habits from people you respect. Set up a meeting with a colleague who has different strengths than you to pick their brain. Your goal is to learn to see things from their perspective, so come with an open mind. You might even ask what they are reading, how they learn, or what their day-to-day routine is.

Try to adopt some elements from their approach — it just might make you a more flexible worker and versatile leader, and more adaptable to change.

Keep listening keep learning

This tip is adapted from “The Best Leaders Are Versatile Ones,” by Robert B. (Rob) Kaiser

 

Use curiosity to break a bad habit

curiosity

Use Curiosity to Break a Bad Habit

Leadership Tip of Week #124

adapted from HBR

Why is breaking a habit so difficult?

It’s because habits are made up of three components:

  1. a trigger (for example, feeling stressed),
  2. a behavior (browsing the Internet),
  3. a reward (feeling sated).

Each time you reinforce the reward, you become more likely to repeat the behavior. The key to breaking this cycle is to become more aware of the “reward” reinforcing your behavior.

First, figure out your triggers. If the habit is procrastination, for example, pay attention to the circumstances surrounding you when you put things off. Do you have a big project you’re trying to avoid? Do you have too much on your plate? Then, try to identify the behaviors you engage in when you procrastinate. Do you check social media instead of working? Do you take on unimportant tasks instead of what you should be doing?

The next step is to clearly link action to outcome. Ask yourself what you get from surfing the internet for pictures of cute puppies. How rewarding is it in the moment, especially when you realize that it isn’t helping you get your work done?

Lastly, replace the reward with curiosity. Being curious helps you acknowledge the sensations you’re feeling — boredom, distraction — without acting on them.

Working parents, help each other recharge

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Working parents, help each other recharge

Leadership tip of the week #123

adapted from HBR

It’s been a blast for working parents in last weeks of lockdown. They have spent more time with their children, and many admit to quite liking them !

But it’s not always easy for working parents to communicate their own needs, but it’s worth discussing with your partner how you can each make time for self-care.

Before having the conversation, take a few minutes to make a list of what would most benefit you.

  • Is it taking 15 minutes after work to decompress before jumping into child care responsibilities?
  • Maybe it’s enjoying a couple of hours on a weeknight to read a novel. Choose one or two things that are feasible and would truly recharge you.

When it’s time for you and your partner to talk, make sure you’re both free of distractions, relatively calm, and not overtired. During the conversation, remember that you’re playing for the same team. Use “I feel” statements that focus on your own experience instead of accusatory “You always” statements. Listen to your partner’s needs, and be willing to make concessions.

You’ll both benefit if you approach the conversation with empathy and an open mind.

This tip is adapted from How to Communicate Your Self-Care Needs to Your Partner,” by Jackie Coleman

work backwards from customers needs to know what to build next.

Work backwards from customer needs

to know what to build next

Jeff Bezos letter to shareholders 2008

Key message 11/22

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.

“’Working backwards’ from customer needs can be contrasted with a ‘skills-forward’ approach where existing skills and competencies are used to drive business opportunities. The skills-forward approach says, ‘We are really good at X. What else can we do with X?’ That’s a useful and rewarding business approach. However, if used exclusively, the company employing it will never be driven to develop fresh skills.”

Takeaway

Some companies figure out what to build next by thinking about what they’re already good at doing today — a good approach in some cases, Bezos says, but not always.

If you want to delight and amaze your customers and develop fresh lines of business, you need to think backwards from what your customers need.

Challenge

As a company, it’s more straightforward to rely on a skills-forward approach. Over time, you develop expertise in certain fields. Deciding what to do next based on the expertise you’ve already developed is often a good way to leverage your competence in one area into new successes.

The problem is that this method will never bring you new skills or capabilities. You’ll never learn how to do new things, and that will ultimately hurt your ability to innovate.

Solution

To take your business to the next level, start by thinking about what your customers want or need, and work backwards to figure out what you can build.

When the Kindle project started, the vision was simple — the capability for any book ever printed to be accessed in less than 60 seconds. That was it: the product was no more determined than that.

Although Amazon had never built a hardware device before, the team focused on fulfilling that vision. They hired people with the right skills to engineer that vision, rather than trying to create a product better suited to Amazon’s existing skills.

The Kindle software and hardware emerged organically out of the Amazon team’s attempt to answer that product vision, and the result became another powerful arm of Amazon’s business.

Thinking backwards from customer needs rather than seeking the path of least resistance at each juncture allows Amazon to be both successful and creative. That’s what has allowed them to reinvent the company time and time again.

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

Reach out to people you miss

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Reach Out to Those Casual Friends You Miss

Leadership Tip of the week #122

adapted from HBR

On an average day, we interact between 11 and 16 times with casual acquaintances — Meeting new people at work or catching up with acquaintances casually for a coffee.

Now that we live in an era of social distancing, these once-common interactions have disappeared, and we no longer have physical reminders that we are part of a wider social network. Reaching out to show someone that you’re thinking of them will make you both feel a bit closer during this challenging time.

  1. First, think of the right way to reach out — is it a text, a phone call, an email, a Facebook message? What will put the least amount of pressure on the recipient?
  2. If you don’t get a response, don’t take it personally. Think about this interaction as similar to smiling at a colleague in the hallway: Sometimes you might stop and chat, and sometimes you might not.
  3. Instead of expecting a reply, enjoy the knowledge that your message is likely to deliver a little hit of happiness for the recipient.
  4. Set an expectation for a short and simple conversation — it will help avoid the feeling that socializing is another item on your to-do list.
  5. And if you do end up talking, share something about yourself — maybe a photo of your pet or child doing something funny — to help build positive rapport.

It may feel awkward at first, but reaching out to an acquaintance will create a spark of joy for both of you while you’re out of each other’s sight.

Let’s all reach out to one extra person a day for the next week?

This tip is adapted from Why You Miss Those Casual Friends So Much,” by Gillian Sandstrom and Ashley Whillans

adapt your leadership style

Apple Developers Conference

adapt your leadership style to your situation

Leadership tip of the week #115

adapted from HBR

There’s not one leadership style that works for all contexts. Steve Jobs was not just a great leader he was a situational leader, with flexibility in his leadership styles.

For example, in some situations, it’ll make sense to tell people what to do, whereas asking open-ended questions will work better in others.

You might need to adjust goals as new information emerges, or, under certain circumstances, stick exactly to the plan.

You should adjust your style based on the people you’re managing, the context in which you’re leading, and the outside pressures you’re under.

To navigate tensions like these, you need a good deal of self-awareness. So understand your natural tendencies. What’s your default position? Do you tend to be more of a traditional leader, or do you align with a more adaptive, fluid style?

If you’re not sure, get feedback from others.

Then learn, adapt, practice.

The goal is to develop a portfolio of micro-behaviors you can employ when the situation demands you use a different style. And look to your employees for signals on when it’s appropriate to favor one approach over another

This tip is adapted from Every Leader Needs to Navigate These 7 Tensions,” by Jennifer Jordan, Michael Wade, and Elizabeth Teracino

The best way to find out if you can trust somebody is to trust them.

ernest-hemingway-trust-quotes

Trust Is Even More Important When You’re Working Remotely

Leadership Tip of the Week # 120

adapted from HBR

Leaders who suddenly have found themselves managing a fully remote team may be wondering how to measure employee productivity and quality of work from a distance.

The key ingredient is trust.

You may not be able to see what people are doing, but you can still equip them with the information they need, assign them tasks, and check on them like you always have.

  1. give them the right equipment
  2. give them rituals for the day
  3. find new ways to keep the coffee machine conversations
  4. be open in conversations ( the easy and the difficult ones)

Since you can’t monitor process in the same way, your review will have to be based on outcomes.

Of course, there’s no reason to believe that, in this new environment, people won’t do the work they’ve been assigned. Remote work has been around for a very long time, and today we have been learning to use that technology to not only do our own work but also to successfully collaborate.

So as a manager, your main job is to heed Ernest Hemingway’s advice: “The best way to find out if you can trust somebody is to trust them.”

This tip is adapted from 15 Questions About Remote Work, Answered,” by Tsedal Neeley

Stay Positive to Help Yourself — and Others — Through This Stressful Time

stay positive

Stay Positive to Help Yourself, and Others

Through This Stressful Time

Leadership Tip of the week #121

adapted from HBR

During stressful and uncertain times, it’s normal to feel anxious and scared. Chances are, most people around you feel it, too. It’s easy to infect each other with anxiety and fear, but we can take steps to protect ourselves from these emotional contagions.

  1. To start, cut down on how often you engage in venues where fear feeds on itself, such as social media, cable news, and frenzied conversations with friends and coworkers.
  2. Do your best to distinguish between people who are speculating and those who have sound information.
  3. Also, take care of your mental health. This means exercising, practicing mindfulness and meditation, volunteering, and seeking out positive, high-quality connections with others — even if they’re virtual.

Simple wellness practices like these will help you build resilience and positivity, and maybe pass some along to the people in your life.

This tip is adapted from The Contagion We Can Control,” by Sigal Barsade

Protect your non-work time

smiley post it note on corkboard happiness versus depression concept
smiley cartoon face expression on yellow post it note surrounded by sad and depressed faces on cork message board in happiness versus depression and smile against adversity concept

Protect your non-work time

Leadership tip of the week #113

adapted from HBR

As more people are adapting to working from home, we are all learning to adapt:  jobs used to have very clear lines between when you’re “on” and when you’re “off.” But when you working from home — it’s important to protect your non-work time.

  • If you feel like work is taking over most of your waking hours, start by clearly defining what “after hours” means for you.
  • Take into account the number of hours you’re expected to work each week, as well as personal commitments like homeschooling kids , exercise, family and some me-time
  • When do you need to start and stop to put in the appropriate amount of work time?
  • Then, develop mental clarity about what needs to get done and when you will do it.
  • Keep track of your tasks and plan them out.
  • Make sure you block off time for an end-of-workday wrap-up, where you review and make sure you did everything you needed to do for the day. Even have a collective end of week drink with colleagues on a zoom call.
  • Lastly, communicate with your colleagues about how (or if) you want to be contacted during your off hours.

Really guard your time. If you don’t, you won’t get the mental break that everyone needs

 

 

Reign in Video Call Ramblers

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Reign in Video-call Ramblers

Remember when videoconferencing software was a nice-to-have? Oh, how times have changed. Such technology has become a lifeline for British workers, many of whom had never even heard of Zoom or Google Meet just a few weeks ago—and it shows. As is the case with most things in life, practice makes perfect, but only if you’re aware of the pitfalls.

To make your virtual meetings as productive as possible, start by reigning in the ramblers. Discussions that turn into digressions aren’t unique to videoconferences, but they’re a lot harder to get a handle on when you’re remote. Regain control of the conversation by taking one of these three steps:

1. Ask the speaker to summarize his or her point for the meeting notes.

2. Ask the speakers to continue their conversation offline.

3. Establish a subtle signal (think, a hand raise) that participants can use if and when they feel the discussion is getting off track.

How to adjust to working from home

working_from_home

How to adjust to working from home

Leadership Tip of the week #113

adapted from HBR

When you aren’t accustomed to working remotely, it can be hard to adjust psychologically.

To make the transition, take a disciplined approach to managing your day and develop a few rituals.

  1. Schedule a start and an end time for work.
  2. Take a shower, get dressed — even if it’s not your usual office attire — then get started on the day’s activities. If you typically move around a lot at work, build that into your day by taking brief walks outside or even around the house.
  3. If you’re an extrovert and accustomed to a lot of social contact, make sure that still happens. Ask yourself: “How will I protect myself from feeling lonely or isolated?” and make a plan.
  4. Focus on the positives. Think about what you enjoy about working from home, for example, playing music or being more flexible with your time. Remind yourself that even if it’s not your choice right now, working from home can be fun.

This tip is adapted from 15 Questions About Remote Work, Answered,” by Tsedal Neeley

what do customers want in this crisis?

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Customers want companies to act in 3 broad ways in this crisis

leadership tip week #111

adapted from HBR

In a fast-moving crisis, it’s important for leaders to communicate with empathy and honesty — not just internally, but externally as well. Of course, customers require a different approach than employees.

Recent research by Kantar was clear that customers wanted organisations to communicate how they act in three broad areas :

  1. For their customers
  2. For their colleagues
  3. For their wider community

 

1.For their customers

In the current crisis Asda CEO Roger Burnley and Sainsbury’s CEO Mike Coupe recently sent out a note to customers describing how they were acting in all three areas and have gained widespread plaudits, whereas Tim Martin Wetherspoons CEO has come under high levels of criticism for the video message he sent to his colleagues suggesting they take their skills to Tesco!

2. For their Colleagues

Grocery Retailers are focusing on protecting  colleagues with social distancing, perspex screens at check-outs, in-store cleaning procedures , increase limit on contactless to £45 and supporting colleagues with sick pay and Asda even committing to a bonus in June.

3. For their wider community

Coop are doing some great work supporting Food Banks with a guaranteed donation of Food. Iceland, Sainsbury’s and Asda have led by opening shops specifically at times for older customers or NHS workers , and many online retailers are prioritising delivery slots for older or vulnerable customers. M&S and Coop even starting local delivery services to vulnerable people.

Overall the focus that is working to build trust is

  • Focus on empathy rather than trying to create sales opportunities.
  • Deliver great Basics in store.
  • Rethink advertising and promotion strategies to be more in line with what’s happening in the world otherwise you risk sounding tone-deaf and alienating your customers ( removing multi-buys) or Coles in Australia shot an ad with their brand spokesperson encouraging its customers to stay safe
  • Look at your messaging from the perspective of your audience, and let your compassion drive your communications, rather than fear of doing the wrong thing

 

This tip is adapted from Communicating Through the Coronavirus Crisis,” by Paul A. Argenti

Reassure Your Team During Uncertainty

london coronavirus 2

Reassure Your Team During Uncertainty

Leadership tip of the week #109

adapted from HBR

This has been a week like no other in the world. Health Crisis. Economic Crisis.

When the news is scary and the future is uncertain, many colleagues will look to leaders for reassurance — even though you might not have the answers yourself.

You can help by first finding your own sense of focus.

  1. Before you start communicating, take a minute to pause and breathe. Then put yourself in your audience’s shoes. What are their concerns, questions, or interests? What do they need an immediate answer to? You might use language such as, “I know many of you may be thinking…” The quicker you can address what’s on their minds, the more likely you’ll be able to calm them down.
  2. Seek out credible sources of information, and read fully before distilling it into clear, concise language. You can confidently express doubt or uncertainty, while still maintaining authority. You might say, “Reports are still coming in, but what we understand so far is…”
  3. Communicate frequently, even if you don’t have news to report, so that people know you are actively following the issue.
  4. And provide tangible action items. Use language such as, “Here are the steps we are taking,” or “Here’s what you can do,” to demonstrate action.

stay safe everyone…

This tip is adapted from How to Reassure Your Team When the News Is Scary,” by Allison Shapira

communicate communicate communicate

people10

Communicate with Your Team During a Rapidly Evolving Crisis

leadership tip of week #110

adapted from HBR

Keeping your employees informed during a crisis should be one of your top priorities as a leader, and this is the crisis of the century.

  1. It’s your responsibility to stay on top of events as they unfold — especially if they’re evolving as fast as they are right now.
  2. At the same time, beware of hype. News outlets often focus on what’s new, rather than the big picture, and they sometimes don’t distinguish between hard facts, soft facts, and speculation.
  3. Think critically about the source of the information before acting on it.
  4. Of course, colleagues have direct access to many sources of information too — but don’t assume they’re fully informed. It’s far better to create and widely share a regularly updated summary of facts and implications so you’re all on the same page.
  5. And constantly re-frame your understanding of what’s happening.
  6. Don’t hold off on disseminating plans just because they might change.
  7. Create a living document, with a time-stamped “best current view,” and update it regularly, highlighting critical changes.

This tip is adapted from Lead Your Business Through the Coronavirus Crisis,” by Martin Reeves, Nikolaus Lang, and Philipp Carlsson-Szlezak

4 steps to get buy-in

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4 Steps to Get Buy-in 

Leadership Tip of week #109

adapted from HBR

Everyone wants innovation in their organisation, but getting a new idea implemented can be a challenge, especially when office politics are in play. When you’re trying to get approval for your latest innovation, follow these four steps.

1. anticipate resistance. If you know what people might object to, you can plan how you’ll address those concerns.

2. understand what objections are truly about. For example, someone might say they object because of a publicly acceptable reason — say, the project is too costly — when their real concern is political, like they’re afraid their team will lose influence.

3. find a champion for the project. This should be a senior executive whose clout and expertise can help you move the project forward.

4. gather a critical mass of supporters. If you have a group of people who believe in the innovation enough to try it, you’ll have social proof that the idea is a good one.

Adapted from “How to Navigate the Politics of an Innovation Project,” by Brian Uzzi

Amazon Go accelerates in size and confidence

 

Amazon Go Grocery, an expanded version of the walk in, select and walk out Amazon Go format, has been open since end February and it is different from the much smaller stores that preceded it and which have been making inroads in cities across the US.

Rather than being sub 2,000 sq ft, this is a 10,400 sq ft concern, putting it firmly in the small neighbourhood supermarket or super-sized convenience store category.

As such, the offer is substantially different from the Amazon Go norm where the focus has been on snacks, prepared and packaged foods and perhaps a cup of coffee from a machine while the shopper is at it. In Amazon Go Grocery there is a much greater fresh offer and it now becomes possible to shop for the evening meal or even to stock the larder. Yet the look and feel of the store is nearly identical to an Amazon Go with the difference being the mechanics of allowing customers to have a ‘bigger’ shop with trolleys, reusable bright green bags and suchlike.


There are also elements of the Amazon-owned Whole Foods Market about what has been done with products from suppliers to that chain being used to boost the Go Grocery offer, although prices are generally lower than in the sister enterprise.
this still doesn’t break even with the economics but they look more and more likely to be able to develop that in the future . There will be a limit to how many they will launch but when they do sort out economics beware 7-11 in USA and TESCO Sainsbury’s in UK.

This may all still represent small change for Amazon, but increasingly the app-based walk in walk out food shop at scale looks a realistic possibility. UK retailers need to take note.

check out other Blogs on Amazon and on creating fast check-outs

1. Bezos masterclass in management through shareholder letters #1 /22

2. Zig while amazon zags

3. Amazon-Go leading the way

4. Robots make stores Better Simpler Cheaper

5. Frictionless C-Stores