One of the things that Emilio Duró always reminds us of is how important it is to identify those who know, and do what they do. In the current corporate scenario one of the most outstanding figures is Jeff Bezos, the founder of Amazon, one of the five largest companies in the world and the star of the current technological and digital revolution in several fields. In his latest, outstanding book The WTF?! Economy, technology evangeliser Tim O’Reilly cited some of the insights that Bezos shared at a meeting with his staff to face the challenges of the future.
O’Reilly explains that at these meetings, Bezos always begins by reminding everyone that “it’s still the first day,” a catch phrase that Amazon’s boss uses in all his meetings. Once, an employee asked him what Day 2 looks like. This question led Bezos to develop his central idea once again, explaining the passionate, committed disposition of Amazon’s proprietor in everything he does, as he recalled in his annual letter to the shareholders: “Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline.” In a somewhat melodramatic tone, Bezos reminded his staff that transforming a sector, an industry, the very method of buying and selling, requires always pedaling like the first day. Then, Bezos pointed out four basic tips to avoid “day two.”
First, obsession with the customer. Peter Drucker’s celebrated mantra, considering that the client had to be at the center of all the processes and activities of an organization. The customer is what makes sense of a company, and the moment that a company detaches itself from the customer, it lays the foundations of its own decline. In the case of Jeff Bezos, this includes anticipation: “Even when they don’t yet know it, customers want something better.” Organizations focused on satisfying the customer’s expectations of something better are companies that innovate and transform the world for the better, every day.
Second, a skeptical opinion of proxies, that is to say, not get carried away by the pitfall of thinking that things are going well simply because the processes and the organization are doing well. The evaluation of the results is always in accordance with old standards, which is why we must always try to go further, demand more and never fall for complacency. What is important is the results, the pay-off in Nassim Taleb’s happy expression in his latest book, Skin in the game, and these results always have to undergo a demanding value judgement.
Third, enthusiastic adoption of trends outside the organization itself. It is important for any organization to understand what the great global winds are, to understand them, to know where they come from, and to climb on the mega trend bandwagons and revolutions that can help your corporation grow and improve. Staying away from these disruptive improvements may mean you quickly end up out of the game, without taking advantage of new sources that generate value, efficiency, and changing flows on which to grow but also to accrue your own capital stock. A message that reminds us that capitalism is a positive sum game where voluntary cooperation between economic agents is much more important than competition.
Finally, Bezos reminded his employees and shareholders of the advantages of being a fast, flexible organization, capable of taking decisions quickly. In today’s fast-paced, changing world, it is not enough just to be on the ball, you have to play it right and as quickly as possible. Decision making is always the most delicate part of running a company, where the brain of the corporation is and which determines whether a company will succeed or not.
For Bezos this decision-making process is a craft, it has to adapt to the circumstances of each decision and therefore will unlikely be a standard process for all decisions. There are decisions that are reversible, others that are not; the processes in both cases will necessarily have to be different. Another key element is to keep in mind that the future is uncertain and information is always incomplete. Bezos points out how decisions must be made with 70% more or less of the information we consider available. If we wait to get 90% or more of the information, we will doubtless be left behind. Making good decisions also means knowing how to take them on time.
But you can’t always get it right. Bezos emphasizes the issue of speed in decision making and then adds that it is just as important to know how to distinguish between good and bad decisions, humbly and with determination, to know how to correct them as soon as you identify them. You always learn from mistakes and if you are quick to make decisions and quick to identify the errors, the result is usually not costly. However, if you paralyze in the decision-making process because of lack of information or because the feeling of making mistakes is terrifying, the delay and paralysis always comes dear. Again, it’s about remembering that Amazon always lives at day one: where you are quick, flexible and you correct mistakes.
Interesting lessons to reflect on, not only in the field of business but also socialy in general, where we face great challenges, and I sometimes wonder if we don’t find ourselves too often at “day two.”