A few provocative things happened after The New York Times published a story about Amazon’s culture.
An Amazon employee fought back. A former Amazon employee described what happened after cancer and a baby kept her out of the office for five months and she returned to discover some changes. Amazon launched a generous new parental leave policy.
We are long-time Amazon customers and followers of the trajectory of Amazon’s customer-obsessed strategy of imagination and inventiveness. As I prepare to deliver two keynotes to Amazon tech leadership this summer, I want to share something simple but powerful that I came across early in my research that illustrates the benefit of long term vision.
Jeff Bezos still sends out Amazon’s first shareholder letter with every new letter that has gone out since. 1997 was a big year for Amazon. By year-end, the company had served more than 1.5 million customers, yielding 838% revenue growth to $147.8 million, and extended its market leadership despite aggressive, rapidly evolving competition.
“This strategy is not without risk,” Bezos began. “It requires serious investment and crisp execution against established franchise leaders.”
I have worked with the leadership teams of many large companies for a decade , and as much as anything, the strategy laid out in this initial letter explains why Amazon is in its current position while many of their competitors are struggling to move quickly enough to keep ahead of, much less understand, the crushing demands of their customers. Bezos didn’t just say that Amazon was going to do these things. The company actually delivers on the strategy.
Below, I’ve edited the letter for brevity. Spoiler alert: the letter ends with the need to maintain a sense of urgency, which is the single most important thing to accomplish when trying to get individuals to focus on the long-term health of the organization and the delivery of value to customers over their own self-interest. This doesn’t mean that individuals should be exploited in such an environment. It means that the only way to win the long game is to find balance.
Here it is:
It’s All About the Long Term
We believe that a fundamental measure of our success will be the shareholder value we create over the long term.
We have invested and will continue to invest aggressively to expand and leverage our customer base, brand, and infrastructure as we move to establish an enduring franchise.
Because of our emphasis on the long term, we may make decisions and weigh tradeoffs differently than some companies.
We will continue to focus relentlessly on our customers.
We will continue to make investment decisions in light of long-term market leadership considerations rather than short-term profitability considerations or short-term Wall Street reactions.
We will continue to learn from both our successes and our failures.
We will make bold rather than timid investment decisions where we see a sufficient probability of gaining market leadership advantages. Some of these investments will pay off, others will not, and we will have learned another valuable lesson in either case.
We will work hard to spend wisely and maintain our lean culture. We understand the importance of continually reinforcing a cost-conscious culture, particularly in a business incurring net losses.
We will balance our focus on growth with emphasis on long-term profitability and capital management. At this stage, we choose to prioritize growth because we believe that scale is central to achieving the potential of our business model.
We know our success will be largely affected by our ability to attract and retain a motivated employee base, each of whom must think like, and therefore must actually be, an owner.
From the beginning, our focus has been on offering our customers compelling value.
Setting the bar high in our approach to hiring has been, and will continue to be, the single most important element of Amazon.com’s success.
It’s not easy to work here (when I interview people I tell them, “You can work long, hard, or smart, but at Amazon.com you can’t choose two out of three”), but we are working to build something important, something that matters to our customers, something that we can all tell our grandchildren about. Such things aren’t meant to be easy. We are incredibly fortunate to have this group of dedicated employees whose sacrifices and passion build Amazon.com.
We now know vastly more about online commerce than when Amazon.com was founded, but we still have so much to learn. Though we are optimistic, we must remain vigilant and maintain a sense of urgency.
Based in New York, Rita King is Director and Executive Vice President at Science House, a strategic consultancy that specializes in aligning business goals with collaborative strategies. She is also a futurist at the Science and Entertainment Exchange of the National Academy of Sciences, and also served as futurist at NASA Langley’s think tank, the National Institute for Aerospace, focusing on the future of work and education. Her features have appeared in/on The New York Times, Psychology Today, Al Jazeera, TIME, CNN, Fox News, NPR and the BBC. Follow her on Twitter.