How Jeff Bezos thinks
Amazon and Jeff Bezos have been the subject of multiple books and newspaper and magazine articles. When you have built the world’s biggest online retailer plus cloud platform business, been the richest man for several years in a row, you are bound to be chronicled everywhere.
Most of the business writing has focused on either the Amazon journey or Mr Bezos and his management style. Even the books focusing on Amazon have largely tried to decipher what are the principles and the management style that helped him build such a juggernaut. Similar books are written about every successful entrepreneur, superstar manager or iconic business. Authors try to pin down the four or five things that other CEOS or entrepreneurs can copy.
None of the books written earlier could exactly describe the Bezos secret sauce, though quite a few managed to identify his important management principles. Invent & Wander can be treated as the final word on Bezos’ management principles because it is a compilation of his own letters, speech extracts and other communication edited and with an introduction by Walter Isaacson, former editor of Time magazine, former CEO of CNN, and author of numerous books, including biographies of Benjamin Franklin, Steve Jobs, Albert Einstein and Henry Kissinger.
The book is an easy read. Mr Isaacson does a great job of summing up some of the important principles while providing an insight into Jeff Bezos the man. Initially, Mr Isaacson appears to go a bit over the top in his praise for Mr Bezos, finding parallels with Einstein, Franklin and Jobs. But he is an excellent writer and he manages to avoid turning the introduction into hagiography.
The book is divided into two parts. The first part is from Mr Bezos’ letters to shareholders over the years. Part two is taken from transcripts of his speeches and interviews.
They are all short chapters, often three or four pages at most, and focusing on one or two or three important points. They are succinct and extremely well-articulated.
Some of the chapters focus on things that have been discussed in other books as well. These include his focus on the long term, on improving customer experience, cost and efficiency. But others have not been so well studied earlier and they really make this book special. His philosophy of looking at the free cash flow per share instead of revenue growth, profits or anything else is explained in great detail in his own voice.
Equally, the chapter on the fundamental tools of technology and what he thinks are important and what is not relevant is excellent. It could open the eyes of many CEOS who are forever trying to figure out how to optimise their IT strategies.
The look into decision-making, the big bets to be taken and how to treat failures are exceptionally insightful. Mr Bezos takes a look at where data can help and also the limits of data. New inventions and products rarely come from data analysis, he points out. His “regret minimisation framework” for important, life-changing decisions is amazing. The fact that even failure needs a scale and it is important not to pull the plug too early is a point that other CEOS should learn. He also focuses on how to get the right employees and how to keep them motivated.
When Mr Bezos talks of employees, it should be read as those who are in positions that need decision-making. These are the employees who believe in his mission and not the warehouse workers who are just packing boxes. Though Amazon offers even warehouse workers incentives to study and grow, the working conditions make it almost impossible for them to do so.
The recurring themes in the book are of looking at the long term and always remaining in the Day One mindset. (The Day One mindset is common to most super achievers who never let complacency get hold of them.
The late Andy Grove of Intel had his own phrase: Only the Paranoid Survive, which was pretty similar.)
Part 2 of the book focuses on his experiences, his early life and various things such as work -life harmony — Mr Bezos doesn’t believe in work-life balance which he explains in the book— Washington Post and space travel. It is peppered with interesting tales about events and influences in his life.
Can any CEO start applying the Bezos principles and transform their businesses? Probably not. That is because as Mr Isaacson writes in his introduction, Mr Bezos, like the late Steve Jobs, has the ability to create a reality distortion field. It allows Mr Bezos to create an entirely different world and convince others to believe in it. This is what helped Mr Bezos convince investors to stay put with his long-term vision after the Dotcom crash when his stock went from $106 to $6 or his best employees to believe in some of his audacious bets.
This is a very readable book and well worth the price. It might not turn the reader into another Jeff Bezos but it helps both managers as well as those who just want an insight into the mind of the man who built one of the biggest tech companies of this era.