The keys to business success lie in the way you think about how you will accomplish your goals
In January 2020, Amazon crossed a $1 trillion market cap. Because of its behemoth size, it is no wonder entrepreneurs from around the globe keep a watchful eye on what Amazon does, trying to extract insights into what makes it so successful. The good news is its CEO Jeff Bezos has been very upfront about the core operating principles that fuel Amazon’s growth. In particular, he credits the company’s success to its commitment to the following three areas.
1. Accept Occasional Failure as the Price of Innovating
Most companies avoid failure like the plague. Intuitively, they understand the need to innovate to stay relevant, yet they often get lulled into competing in a way that is safe to minimize losses. But, Bezos notes that you can’t be innovative if you aren’t willing to fail. Here’s his commentary on the topic from one of his annual reports:
One area where I think we are especially distinctive is failure. I believe we are the best place in the world to fail (we have plenty of practice!), and failure and invention are inseparable twins. To invent you have to experiment, and if you know in advance that it’s going to work, it’s not an experiment. Most large organizations embrace the idea of invention, but are not willing to suffer the string of failed experiments necessary to get there.
You’ve got to make experimenting a part of the culture of your business. That means allowing space to explore your curiosity as you try out new ways to add value to your customers.
That doesn’t mean that you have to start failing big. Rather, make calculated bets on the experiments you engage in. This will allow you to get the learning you need to determine the optimal path forward, without losing your shirt in the process.
2. Work Every Day Like It’s Your First Day in Business
Amazon has nearly 350,000 employees. With an organization that size, it would seem that they would operate at a slower pace, much the way many mature companies do. But since the beginning, Bezos has declared that Amazon will operate like a hungry startup, as if it is day one for the business. In his 2016 letter to shareholders, Bezos explained why operating in this manner is so critical:
Day two is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.
Even though Amazon has the resources to be very sophisticated in how they execute on delivering value for their customers, it is the mindset of always operating with a sense of urgency in their work that makes the key difference. This means they make decisions quickly, usually with 70 percent of the information rather than 90 percent. They embrace trends that impact their customers and resist proxies as a marker for success.
You can maintain your startup culture too, even as your business grows. You could do that by empowering your team members to make decisions to delight your customers, foster creativity, and encourage dissent over groupthink as a way to deliver products that solve unmet needs.
3. Give Your Customers What They Want Before They Know They Want it
Adding more value to their customers is the simple goal that is the driving force behind Amazon’s sense of urgency and willingness to experiment. According to Bezos, Amazon is obsessed with them and is always on the lookout for ways to improve upon how they serve them.
That obsession causes them to develop a degree of intimacy with their customers that enables them to work to develop solutions that make Amazon an indispensable part of their customers’ world. Bezos explained why this is such a critical tenet of their business:
Even when they don’t know it, customers want something better, and your desire to delight your customers will drive you to invent on their behalf. No customer ever asked Amazon to create the Prime membership program, but it sure turns out they wanted it.
Be relentless about getting to know your customers. Talk to them, observe them, and get to know them better than they know themselves. Then you’ll know exactly how to deliver products, services, and experiences that solve their problems like none other.
You can build a business that is wildly successful. A smart strategy to do that is by following the principles of companies who’ve already done what you aspire to do, and applying them to the way you operate. These universal lessons from Amazon are a great place to start.