Jeff Bezos rallies Amazon shareholders

In his annual letter to Amazon shareholders, Jeff Bezos, the company’s chief executive, defended the firm’s corporate culture and rallied investors.

The company came under fire last year after a New York Times story provided a critical look of the e-commerce giant’s workplace. There were anecdotes of people weeping at the desk and managers who would try to sabotage each other, as I wrote then.

Bezos, in his letter, addressed the company culture and Amazon’s goals.

Corporate culture:

If it’s a distinctive culture, it will fit certain people like a custom-made glove. The reason cultures are so stable in time is because people self-select. Someone energized by competitive zeal may select and be happy in one culture, while someone who loves to pioneer and invent may choose another. The world, thankfully, is full of many high-performing, highly distinctive corporate cultures. We never claim that our approach is the right one – just that it’s ours – and over the last two decades, we’ve collected a large group of like-minded people. Folks who find our approach energizing and meaningful.

On Prime: Bezos also talked about the success of Amazon Prime, the firm’s $99 annual subscription service. Prime offers among other things, free two-day shipping and access to Amazon-created streaming content through Prime Video, its Netflix competitor.

Bezos indulged in some jokey boasting, saying he wants to make Prime “such a good value, you’d be irresponsible not to be a member.”

The service, which expanded over the past year, has “tens of millions” of members worldwide, and grew 51 percent last year, including 47 percent in the U.S.

“There’s a good chance you’re already one of them, but if you’re not – please be responsible – join Prime,” Bezos wrote.

Is this going to be a new ad campaign? Do the responsible thing and sign up for Prime?

Traps of being a large company: Bezos also spoke, somewhat obliquely, of the danger of Amazon getting bogged down by process:

One common pitfall for large organizations – one that hurts speed and inventiveness – is “one-size-fits-all” decision making. Some decisions are consequential and irreversible or nearly irreversible – one-way doors – and these decisions must be made methodically, carefully, slowly, with great deliberation and consultation. If you walk through and don’t like what you see on the other side, you can’t get back to where you were before. We can call these Type 1 decisions. But most decisions aren’t like that – they are changeable, reversible – they’re two-way doors. If you’ve made a suboptimal Type 2 decision, you don’t have to live with the consequences for that long. You can reopen the door and go back through. Type 2 decisions can and should be made quickly by high judgment individuals or small groups.

As organizations get larger, there seems to be a tendency to use the heavy-weight Type 1 decision-making process on most decisions, including many Type 2 decisions. The end result of this is slowness, unthoughtful risk aversion, failure to experiment sufficiently, and consequently diminished invention. We’ll have to figure out how to fight that tendency.

And one-size-fits-all thinking will turn out to be only one of the pitfalls. We’ll work hard to avoid it… and any other large organization maladies we can identify.

 

Above: Jeff Bezos, Amazon’s CEO. (AP Photo/Reed Saxon)

 

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