3 Takeaways from Amazon’s 2016 Letter to Shareholders
Almost like a Harry Potter fan club, Amazon’s year-end letter to shareholders is something investors and fans alike eagerly await.
After all it’s penned by none other than the visionary at the helm, Jeff Bezos. If you’ve ever read the long letters of Warren Buffet, Bezos’ comes in much shorter but just as insightful.
While ‘corporate America’ can seem removed at times for many, I think the Letter is an invaluable read for stake-holders and business school students, and frankly for anyone wanting to navigate the journey of how innovation, insight, and going beyond mediocrity create lasting change — albeit epitomized today through juggernaut Amazon Inc.
My takeaways from the 2016 Letter:
1. Being a ‘Day 1 Company’
Bezos dediates a good amount of time outling the concept of being a Day 1 Company. Day 1 companies stretch the boundaries of ordinary; they prevent themselves from “becoming a Day 2 Company,” something that commonly spells the death of companies — instantly or over a gradual fall.
Perhaps one of the biggest implications Bezos outlines: Employees have an integral role to play. They must all evaluate the culture. They ought to think strategically. But even more so, they must avoid the consensus decision-making that waits for things to happen.
Companies can focus their business along the dimensions of competitors, products, technology, or a business model itself, yet the one thing that makes a company “good” is always improving — incremental improvement. I think another way to phrase this is: Don’t devote 100% of your time to pondering what competitor firms are doing. Be different.
2. Being Customer-Centric
It’s no secret Amazon’s path to dominance has relied heavily on gambles. But even more so Amazon’s continued success stems from its commitment to the customer.
Bringing new products to customers, new ways to engage, and asking the perennial question: How can we base our business around the customer?
3. In for the Long Haul
Much of Bezos’ commentary angles around the notion that short-term fixation stunts development and prevents true revolution from occurring in the business.
Saying about a long-term approach:
“…If you’re willing to invest on a seven-year time horizon, you’re now competing against a fraction of those people, because very few companies are willing to do that.”
I think the long-haul as Bezos calls it requires a commitment from all stakeholders, employees ought to become individual “owners” within the process and stay motivated.
Much the same as personal growth through setting goals and tweaking them over time, this is the principle of playing in a game focused not on the next 3 years but the next 20. Like people, businesses should iterate their plans, have checks along the way and seek to develop to fend off obsolescence. Change needs to be embraced.
As we look back at the history of Amazon, we see a foray into ventures stretching the boundaries of what many thought a retailer could do.
Bezos led his team, in turn applying his values as a leader to create a company more valuable than many of its peers combined.
A firm that has not only ‘survived’ — but thrived.
View the full Letter here: http://phx.corporate-ir.net/phoenix.zhtml?c=97664&p=irol-reportsannual.
Originally published at https://www.linkedin.com on April 16, 2017.