Learning from the Titans

5 Leadership Strategies of Jeff Bezos

Aim, risk, delegate, design, and empower. Relentlessly.

C. C. Francis
Jul 11, 2020 · 8 min read

Jeff Bezos, Chairman of Amazon, personal net worth $180 billion, famously emphasizes that his company is threatened with failure and must adapt continuously to survive.

Bezos has a work ethic second to none.

His schedule would be physically impossible for some people — to say nothing of the mental discipline he exhibits every day (in his 50s).

It is not an understatement to say that Bezos’ (Amazon’s) success has now disrupted every facet of life across the globe. His vision is now reality. He has no equal.

Among others, Bezos consistently repeats these five business principles:

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Photo by Christian L on Unsplash

1) Focus on Customers, Not Competitors

No artist or performer or salesman or engineer ever encounters runaway success without a thought to how the audience will perceive the work.

The audience — the customer — is the ultimate target. The ultimate focus. The ultimate goal. Competitors are relevant, but they are never the focus.

One of the first things Microsoft did when the COVID-19 crisis hit was close all of its retail “Apple Store” replicas. This was after the failure of Zune, and also the failure of the first-gen Surface tablets. Microsoft’s stores looked just like Apple stores. The Zune looked just like the iPod. The first-gen Surface looked just like an iPad. What did they think was going to happen?

Bezos resists the use of proxies for understanding a target consumer base (think surveys, focus groups, etc.), instead emphasizing a focus on primary research, intuition, and deep knowledge of the market and external trends that drive it.

Innovation derives from you and the consumer — never from competitors. It does not come from iterations of the work of others who’ve already succeeded in doing something similar for the first time.

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Photo by SpaceX on Unsplash

2) Take Risks to Stay Ahead

No one sets out to fail. But fear of failure can be a powerful force.

“Given a 10 percent chance of a 100-times payout, you should take that bet every time.”

-Jeff Bezos

Fear causes paralysis on both the individual and corporate level. If you set out to accomplish something big for the first time, you will fail at least once. There will be costs associated with this. Count on it. Factor them in.

But if you do not take risks — if you do not try big things and innovate and risk likely failure — you will never advance. You will be irrelevant. You will fade into history.

Consider a rocket company, like SpaceX. They never get the rocket right on the first try. Every time they get it wrong, the rocket explodes.

“The thing about a rocket is, the passing grade is 100%.”

-Elon Musk

If they had stopped — had they been afraid to try — there would be no rocket. No Falcon. No Dragon. NASA might still be buying tickets from the Russians.

This principle is broad.

My first book had more than 130 agent rejections — query and manuscript. I was heartbroken. I had spent a year writing this thing, only to put it on KDP for free. I ended up with 10,000 downloads and a “mixed” reception. In terms of traditional publishing, this was an unmitigated failure. In terms of earning money writing, this was also mostly a failure. I gave my product away.

However, I learned how to write a novel (and how not to!). I learned how to market a novel (and how not to). I learned how to design and edit and proof a novel. I found my weak spots, and learned to fix them! I’m cautiously optimistic that my second and third books will be stronger, quicker to produce, and reach more people.

A growth mindset and a strategic willingness to fail are force multipliers.

You are always changing. You are always growing.

Weakness is a teacher. Strategic failure is a teacher.

Intelligent willingness to fail — combined with humble, structured discipline and hunger to learn — will stand you in good stead.

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Photo by Lance Anderson on Unsplash

3) Delegate Responsibility, use Original Compensation Structures, and Maintain Morale

Your actions — your creations — are the product of you, the person, the company, the creator.

If you do not take care of yourself (or your people), you will not create anything. Full stop.

Bezos solves this problem in part by paying employees like owners, and by involving them in high-level decisions that could not cause the company irreparable harm. This is simple and elegant.

Bezos doesn’t just tell employees to take ownership of customers’ problems. He incentivizes them to do so. Amazon’s people invest in the future of the company, as a result of their own financial interests.

Why is this so important?

Imagine the following scenario.

You work at the bottom of a big company. Your manager — your “boss” — the person with almost infinite power over your life and your livelihood (income, healthcare (in the USA), work relationships, etc.) — has a morale problem. It affects the people around him. Productivity and loyalty begin to wane.

When the first person leaves the company, others soon follow. So on, so forth. All this, because one mid-manager had a run-in with burnout.

That’s how important employee morale is. That’s how important it is to hire and keep the right team.

One toxic employee (especially in a management role) can harm an entire organization — and all of the people working there.

Once it takes hold, this type of problem can be challenging to rectify.

It’s far better to prevent HR situations with solid top-level management and robust, pre-established issue detection and escalation.

  • Prevent morale problems.

Leadership can fix morale issues before they begin.

One way to achieve this is through original (non-cash-centric) compensation frameworks. These can tie customer satisfaction (and, indirectly, company success) as closely as possible to employee compensation.

Management policy can do a lot, too. Amazon employees are trained in a concept called disagree-and-commit. When a disagreement reaches an impasse, the employee with the stronger conviction on an issue asks the other to “disagree and commit” in the absence of consensus.

“I know you disagree with me on this, but will you gamble with me on it? Disagree and commit?”

-Jeff Bezos

Disagree-and-commit allows rapid, decisive action and for the stronger conviction to own the decision. Everyone moves on. Bezos emphasizes that the entire team is trained in disagree-and-commit(even him).

  • Detect and escalate existing morale problems early.

Bezos emphasizes rapid escalation of what he calls misalignment problems — teams that have fundamentally different values or views and will not encounter success working together. At Amazon, these broader issues escalate quickly and are sorted out efficiently. They are not allowed to fester into lasting problems that can harm the company. Temporary failure is diagnosed to improve the process and workflow.

Again, it’s how you deal with issues that matters.

Are you using a suboptimal outcome to improve your process — even marginally?

If a failure is strategic and intelligent — if it is a growth opportunity — you will grow. Your process will grow. Your product will grow. The failure becomes part of a success story.

On the other hand, if your organization internalizes failure, maintains the process, and becomes stagnant, the failure defines you. Your brand progresses from Bezos’ “Day 1” — startup — to “Day 2” — stagnation — followed by “Day 3” — irrelevance.

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Photo by Kimon Maritz on Unsplash

4) Design a Company Culture

When people think of you, what do they think of?

  • What is your brand?
  • What is your philosophy?
  • What are your spending habits?
  • How do you treat your people?
  • What do customers expect of you?
  • What do employees expect of each other?
  • What do employees expect of leadership?
  • What do they see coming in the future?
  • How are you unique? Inside and outside your industry?

If you’re on your own, ask yourself:

  • How do you see yourself?
  • How do others see you?
  • What defines you?
  • What are your habits?
  • What sets you and your “brand” apart?

You need to make conscious choices here.

Perception is reality.

You will have an image and a reputation, whether you craft one, or not — even if you are not in business.

Often, you won’t get more than the first one or two thoughts of you or your brand in a customer’s head before they’re off and thinking of something else. And you might not even get into a customer’s conscious mind. They might be thinking of you beneath the surface, indirectly — without realizing it. You do not want your culture and your brand to be set by someone who doesn’t have your best interests at heart.

Every action you take builds your image and your culture, irrespective of intention. Make sure that you take positive steps every day.

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Photo by Marian Kroell on Unsplash

5) Empower People

Many people have the potential to achieve greatness. Much of that goes unrealized because of circumstance. Aim to change this, aim to make others powerful in some respect, and you will go far.

Jeff Bezos classifies Amazon decisions as either “Type 1” (irreversible turning points), or “Type 2” (other decisions). (Note the disciplined organization in his thought patterns.)

He allows non-executives to make Type 2 decisions — something he credits as lessening “stagnation and risk aversion” throughout the company. According to Bezos, the delegation of Type 2 decisions was responsible for the rapid expansion of the Amazon Prime Video business.

Look to a brighter future, and trust that well-hired and well-incentivized people can do their jobs well. If you empower others and raise them up rather than breaking them down, your business will be nimble. You’ll be a step ahead of competitors who are afraid to take these steps.

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A Brighter Tomorrow

C. C. Francis

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Author | Law & Policy Writer

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