Smart People Are A Dime a Dozen. What Counts Is Having A Builder’s Mentality.
On September 2nd in “Smart People Are A Dime A Dozen. What Counts Is Being Creative And Imaginative”, I said I had started reading Invent & Wander: The Collective Writings of Jeff Bezos, with an introduction by Walter Isaacson. My first short article was not a review, it offered a few initial observations that linked to the news of the death of a great thinker, Sir Ken Robinson. So, in this article I will review the book more fully.
I began the first article saying, “Most people know Jeff Bezos is the Billionaire founder and owner of Amazon. And many people will know Walter Isaacson as the author of the biographies of people including Steve Jobs, Leonardo da Vinci, Einstein, and Benjamin Franklin. All are men with certain traits that Bezos also has, says Isaacson.
In something of an understatement, Isaacson says all are smart people, but adds, “Smart people are a dime a dozen and often don’t amount to much. What counts is being creative and imaginative”. But does Bezos earn the right to be compared to Leonardo da Vinci? I will have to read the whole book before I jump to conclusions, but I confess the idea did make me cringe”.
Having now read the book I would put Jeff Bezos on a par with Steve Jobs, but I think we need to wait some time before comparing either to Leonardo da Vinci, Einstein, or Benjamin Franklin. Doing so seems almost as ridiculously premature as giving Barak Obama a Nobel Peace Prize barely a year into his presidency.
In the first article I continued, “Are you wondering, on what basis Isaacson ranks Bezos among these greats? Let me tell you. Among the “ingredients of creativity and imagination” listed, the first is “ to be curious, passionately curious”. He quotes Einstein saying, “I have no special talent” “I am only passionately curious”, and “curiosity is more important than knowledge””.
“The second is “to love and to connect the arts and sciences”, and to recognise that “technology is not enough”, as Steve jobs and Leonardo da Vinci both did. On this second trait Isaacson goes on to say, “In fact, it helps to be excited by all disciplines” to want “to know everything you could possibly know about everything that was knowable”. Because “people who love all fields of knowledge are the ones who can best spot the patterns.””
“The third characteristic is to “have a reality-distortion field”, a phrase used in relation to Steve Jobs that comes from a Star Trek. It describes the “ability to create an entire new world through sheer mental force”, and the ability to “think different””.
“The final trait is the ability to “retain a child-like sense of wonder.” He cautions, “we should be careful to never outgrow our wonder years — or to let our children do so””.
Now, after reading the book, I think the greats all had something far more important than creativity and imagination and the traits already listed, important though they are. The greats, and not only those already mentioned but others throughout history, were driven by a desire to solve problems — big problems that, once solved, created massive and enduring changes in the levels of prosperity enjoyed by nations and their citizens.
We often regard these people as inventors. But they were more than inventors. They were innovators. The difference being, what they invented solved a problem that benefitted society. It gained wide-spread adoption because it had value. And they were able to build enterprises that delivered solutions at scale. Later in the article I will return to this last, and to my mind most important, trait.
In philosophical terms value is a complex concept. In practical terms it is a simple one. It is achieved by bridging the gap between what is and what could be or ought to be.
For example, it could be, and ought to be, possible to end poverty. But poverty is still rife. Solving that problem would be valuable. Doing so requires innovation, not only invention. It needs more than creativity and imagination, even if they are essential. And the solutions needed must have scale.
Bezos says he does not care to be celebrated as the worlds richest man. He would prefer to be remembered as an inventor, an entrepreneur, and a father. I think he is an innovator, not just and inventor. It is important to note, from early childhood he was taught to be a problem solver, by his grandfather, mother, and father.
A problem to be solved was looked at in a slightly different way by Harvard Professor Clayton Christensen whose interest was focused on innovation. He spoke of “jobs to be done”.
Getting the job done more efficiently than is currently possible would be what Christensen called Incremental Innovation. Some innovations allow us to do things that were previously impossible. Christensen called them Disruptive Innovations. We might also call the latter Game-Changing Innovations.
All the greats throughout history produced game changing-innovations, that gave us new possibilities and solved massive problems. And The Age of Enlightenment, which led to the Industrial revolution, was the period in history that produced many greats and the transformation in levels of progress and prosperity, in scale and scope, that far exceeded anything previously experienced by humanity.
What Bezos has done at Amazon is create a culture akin to that of The Age of Enlightenment.
In his letter to shareholders in 2018 Bezos spoke of “intuition, curiosity, and the power of wandering”, of wanting to hire people with these traits, who “like to invent”.
In hiring such people and encouraging them to wander the goal was to make “outsized discoveries”, “powered by a deep conviction that the prize for customers is big enough that it’s worth being a little messy and tangential” to find the solution.
Bezos notes that, “sometimes (often actually) in business you do know where you’re going, and when you do, you can be efficient. Put in place a plan and execute. In contrast, wandering in business is not efficient — but it is also not random. It’s guided by hunch, gut, intuition, curiosity, and powered by a deep conviction.” That conviction comes from knowing that the prize for customers is big enough. And “such wandering is an essential counterbalance to efficiency. You need to employ both.”
Crucially, Bezos mentions the one trait that Isaacson did not pick up on. It defines the difference between an inventor and an innovator, and the difference between an average entrepreneur and a great entrepreneur. I referred to it earlier. It is what Bezos calls it “a builder’s mentality.”
He says, “from early on in Amazon’s life, we knew we wanted to create a culture of builders”. He says, “A builder’s mentality helps us approach big hard-to-solve opportunities with a humble conviction that success can come through iteration: invent, launch, reinvent, relaunch, start over, rinse, repeat, again and again”. “the path to success is anything but straight.”
Approximately sixty percent of the book consists of the reproduction of the letters Bezos sent to shareholders between 1997–2019. Over and over, starting with the first of his letters, Bezos repeats the need for a focus on the long-term, and the need for an obsession with creating value for customers, not shareholders. He states that in the long run those interests align. But he is adamant that customer value creation must be the focus. And that involves inventing solutions for customers. The book also provides evidence that Amazon’s focus was, and is, invention for both incremental and game changing innovations.
If you have read my previous articles, you may have read something about Valueism. It is a concept I have been developing for some time. It argues for an evolution of capitalism re-focusing it on value creation, as opposed to the current model which is driven by value extraction and rent seeking — “trying to make more money without producing more for customers”, as the Economist newspaper defines it. Such rent seeking is the goal of much incremental innovation, such as re-designing packaging and other schemes to attract a price premium without adding any real benefits.
Clearly that is not the strategy Bezos believes in. He aims to deliver real benefits whilst also reducing prices. i.e. “offering more for less”. In this sense he is a Valueist. He also aims to serve suppliers and employees well, by offering them several products and initiatives that are described in the book.
Some would argue the approach he describes confirms the need to switch from the shareholder primacy model of maximising shareholder value (MSV), to the stakeholder model. I would argue it instead proves the shareholder v stakeholder argument is an entirely false dichotomy, particularly in the long run when interests align, as Bezos also argues. For more on this read my previous article: The primacy Debate and False Dichotomies.
Another key takeaway relates to the power derived from having clarity about what value you create, who for, and how you create it. In my articles on Valueism I have suggested this clarity is central to strategic thinking and management. But, I am not referring only to customer value when I make my argument.
Bezos has designed and executes what he calls a platform for the creation of customer value, which he admits he is obsessed about. But his platform, a Value Scheme in my language, is also designed to create value for other stakeholders. It is designed to co-create value collaboratively.
A value scheme explicitly defines how the firm creates value for each and every legitimate stakeholder group, and by what means. This scheme, like the platform Bezos speaks of, should be constantly evolving in innovative ways to deliver greater value to all stakeholders including society.
By designing and executing a Value Scheme, the system upon which the organisation creates value, it becomes clear who the operation depends on. This risks can be better understood,and the need for trade-offs avoided or reduced. In this way resilience and performance can be improved significantly.
There is no shortage of big problems to be solved and we need great innovators to help solve them. As Bezos makes clear, it is only big corporations that can solve the biggest problems, since doing so often requires scale. And this is where the big value creation and growth opportunity exists for corporations.
In this context, it is sad to think that most innovation by big business is focused on incremental innovation for value extraction purposes, driven by the constraint of a short-term focus. Those companies and their shareholders will never realise the potential of a company like Amazon. They are not operating a Bezos business model, nor do they think like the great innovators.
In addition, most companies and their boards lack clarity about what value they create, for whom and by what means. I have often cited research giving evidence that this is the case, so I will not repeat it. I will approach the matter in a slightly different way this time.
As the writings of Bezos make clear, value creation requires relentless innovation, both incremental and game changing innovation. So, how many companies have an innovation system?
Curt Carlson, former CEO of the technology accelerator SRI, which produced a series of innovations worth billions of dollars, says “most organizations do not have comprehensive innovation systems or processes”, and “if the professionals in a company cannot describe the company’s innovation processes, there clearly are none”.
Carlson also advocates a focus on “value creation”, which means “formally and systematically connecting market needs with new solutions.”
Many of the other ideas in Carlson’s Innovation Playbook read much like the Bezos formula — form the design of meetings and the decision-making process, to the need to focus on game changing innovations. But Carlson would have a problem with Bezos’s attitude to failures.
Carlson suggests the focus has to be on big projects because, “the cost of putting together a high-powered team is otherwise not justified.” He adds, “In the innovation economy, we must aspire to work on important customer and market needs, not just those that are interesting to us. Interesting problems are quickly overrun by others in the innovation economy. Important customer and market needs allow for the creation of significant customer value and they also motivate and attract the best staff”.
The writings of Bezos also reminded me of a comment by the management writer, speaker and former professor, Roger Martin in his book The Design of Business. Like Bezos Martin describes innovation as an iterative process that starts with an idea and possible solutions based on heuristics — rules of thumb.
The heuristics are then explored in iterative stages that end in an algorithm-based process if successful. Martin depicts this process as a funnel with progress from one end to the other being driven by information and the speed of learning.
He concludes, “the velocity of movement through the knowledge funnel, powered by design thinking, is the most powerful formula for competitive advantage in the twenty first century.” It is a formula that Bezos understands extremely well. It is driven by his builder’s mentality and that of the people and the culture of Amazon.
Invent & wander will be published by Harvard Business Review Press on November 17th and is available to pre-order on…you guessed it….Amazon.