Jeff Bezos hasn’t written his own business book, yet, but the Amazon CEO and founder has delivered enough lessons to fill multiple tomes in his annual letters to the Seattle’s company’s shareholders over the past two decades.
His latest missive, released today, is no exception — exploring the subtle nuances of high standards and what it takes to rise up to the challenge of “divinely discontent” customers. Like most good reading, the full letter is available as an exhibit to a Securities and Exchange Commission filing.
Here are the highlights.
- High standards are teachable and contagious. People don’t intrinsically have high standards but can learn them through exposure, Bezos writes. “Bring a new person onto a high standards team, and they’ll quickly adapt. The opposite is also true. If low standards prevail, those too will quickly spread.” He notes that a someone “can accelerate that rate of learning by articulating a few core principles of high standards,” as he says he aims to do in the letter.
- High standards are confined to specific domains, not universal. Just because someone has high standards in one area doesn’t mean the same person will have high standards in another. “When I started Amazon, I had high standards on inventing, on customer care, and (thankfully) on hiring,” he explains. “But I didn’t have high standards on operational process: how to keep fixed problems fixed, how to eliminate defects at the root, how to inspect processes, and much more. I had to learn and develop high standards on all of that (my colleagues were my tutors).”
- Achieving high standards requires recognizing what those standards look like in a specific domain, and understanding how long it will take to achieve them. Bezos cites the example of a friend who wanted to execute a perfect free-standing handstand, and after some initial struggles on her own started working with a coach who explained that it would take six months. “Unrealistic beliefs on scope – often hidden and undiscussed – kill high standards,” he writes. “To achieve high standards yourself or as part of a team, you need to form and proactively communicate realistic beliefs about how hard something is going to be – something this coach understood well.”
The letter goes on to give an update on many aspects of Amazon’s business, including the revelation that Amazon has more than 100 million Prime members worldwide, the first time the company has disclosed that number.
Bezos’ latest musings might not rank up there with classics like the importance of being “willing to be misunderstood for long periods of time.” But the full letter is worth a read as a new insight into the formula behind one of the world’s most valuable companies.
