#21 Make high quality, high-velocity decisions 🚀
In this (2016) letter to shareholders, Bezos provides techniques and tactics that a large organization can adopt to maintain the vitality of Day 1.
Bezos indicates that a company should always guard against Day 2. Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. This kind of decline could happen in extreme slow motion. An established company might harvest Day 2 for decades, but the final result would still come.
Bezos provides some essentials of Day 1 defense:
(a) Customer obsession: Focusing on this aspect helps a company to continuously invent on behalf of the customer as customers are always, beautifully, wonderfully dissatisfied. A customer-obsessed culture creates conditions where you can experiment patiently, plant seeds, protect saplings, accept failures and double down when you see customer delight.
(b) Resist managing by proxies: Avoid the tendency to manage to proxies. For example, the process becomes the proxy for the result you want. Don't take comfort that you followed a process that resulted in a bad outcome. Modify the process to ensure that you get the right outcome. Another example, market research and customer surveys can become proxies for customers - something that is especially dangerous when you are inventing and designing products.
Good inventors and designers deeply understand their customers. They spend tremendous energy on developing intuition. They study and understand anecdotes rather than only the averages that you find on surveys.
As a product or service owner, you must understand the customer, have a vision, and love the offering. A remarkable customer experience starts with heart, intuition, curiosity, play, guts, taste.
(c) Embrace external trends: Don't resist trends, embrace them. If you fight them, you are probably fighting the future. Embrace them and you have a tailwind. They are easy to spot as they get talked and written about a lot. He cites the example of machine learning & artificial intelligence as an obvious trend happening right now.
(d) Make high-quality, high-velocity decisions. Guidelines for making decisions:
Speed matters in business, make type 2 decisions quickly using a light-weight process as they are reversible. You need to be good at quickly recognizing and correcting bad decisions. If you are good at course correcting, being wrong may be less costly than you think, whereas being slow is going to be expensive for sure.
Sometimes teams have different objectives and fundamentally different views. They are not aligned. No amount of discussion, no number of meetings will resolve that deep misalignment. Without escalation, the default dispute resolution mechanism for this scenario is exhaustion. Whoever has more stamina carries the decision. “You’ve worn me down” is an awful decision-making process. It’s slow and de-energizing. Go for quick escalation instead - it’s better.
You can read Bezos' letter here.
PS: Summary of all the Amazon Shareholder letters from 1997-2018 are available as a Kindle book.