Set the Bar Higher: the Value of High Standards
Lessons from Amazon’s latest shareholder letter.
In the latest Amazon shareholder letter, Jeff Bezos writes about how to create a culture of excellence through high standards and the value it has had on Amazon’s success.
Amazon has set on the throne of customer satisfaction with eight straight years of being ranked #1 by customers in The American Customer Satisfaction Index. On the 20th anniversary of the first shareholder letter, we are invited to take a closer look at how they have continued to meet customer expectations.
Customers are Divinely Discontent
Bezos describes customers as “divinely discontent”, as their expectations are constantly increasing forcing businesses to improve. This innate desire to find a better way has spurred innovation from the beginning of time. With the world being increasingly connected and customers having access to boundless information, the rate at which customer’s expectations increase is accelerating. There’s no doubt that the company has committed to meeting these expectations, with the first shareholder letter 20 years ago stating:
We will continue to focus relentlessly on our customers.
Jeff Bezos shares that a big part of the company’s success has come from having high standards within the organization and shares what he has learned about high standards.
Traits of High Standards
There are two misconceptions that about high standards that Bezos clarifies:
- Teachable, not intrinsic: There is a notion that having high standards is something that is inherent in certain people, but Bezos quickly refutes in favor of the view that it is teachable. He suggests that people adapt to the team they are on, whether it be adapting to high or low standards.
- Domain-specific, not universal: In a similar tone, he refutes the idea that a person will have high standards across the board. We will inevitably ‘blind spots’, underscoring the importance of humility and having a team that can close those gaps.
Achieving High Standards
- Recognition: Understanding what good looks like for a specific domain is critical. If we can’t recognize what success looks like, then we cannot know whether we are achieving success. At Amazon, memos are an important way to communicate ideas and spark discussion. While we may not be able to pinpoint what it is that makes up the anatomy of a great memo, we do know when we are reading a good one vs. a bad one. It’s imperative that we have this ability to distinguish what high standards are for any task or objective.
- Scope: Once you know what good looks like, you need to identify how difficult it will be to attain. Drawing further upon the memo example, he mentions that often times the reason that memos are poorly done is because there is a misunderstanding in the level of effort it takes to do it well. If you have the impression that it will take a few hours to create a great memo, then you are setting yourself up for failure because it very likely will take a week or more.
Skill? This begs the question of how skill fits into the picture. Can you create a great memo if you are not a great writer? Yes — it is more important that you are able to recognize what a great memo looks like and establish proper expectations on scope. As long as there is someone with the skill on the team, then there is an opportunity to succeed. Again, Amazon highlights the importance of teams as opposed to individual contributors.
A Culture of Excellence
While most of us are not in charge of running $175B annual revenue businesses, there is something meaningful here that applies to all businesses. Most people realize that company culture is important from a talent acquisition perspective because teams that work well together achieve more. However, the conversation on culture is generally focused on the attitudes and personalities of the individuals at a company. While companies spend tons of resources trying to acquire the perfect candidate, they often overlook the fact that employees will rise or fall to the standards the company sets.
We can learn from Amazon that company culture is also shaped by the way in which its employees set the bar for success on a daily basis. Jeff Bezos’ understanding that customer-centricity is a constant battle has led him to entrench high standards into the company’s values since its inception. With over 100M global Prime subscribers, it is clear that the high standard for success he has set is paying off.
Find the full letter here. Please let me know your feedback and applause/share if you found this article interesting!