Rules Amazon: Secrets of success from the richest man in the world - ForumDaily
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Rules Amazon: Secrets of success from the richest man in the world

Founder of online retailer Amazon Jeff Bezos firmly entrenched in first place in the ranking of the richest people in the world. At the rate Forbes, his fortune exceeds $ 118 billion

Photo: twitter / Jeff Bezos @JeffBezo

Edition Harvard Business Review decided to recall the most interesting excerpts from an interview with Jeff Bezos, which he gave in 2007 year. Despite its prescription, many tips on achieving success from the founder Amazon look no less relevant than 10 years ago.

If you draw a model of our organization, you get a fractal, that is, a figure, each part of which has the same properties as the whole. Let's say the person who heads our program Fulfillment by Amazon (it allows independent retailers to use our entire infrastructure - warehouses, logistics and delivery service, etc.), at its level is responsible for developing a strategy. The same thing happens in all divisions of the company. The company cultivates this principle. Alan Kay, one of the founders of the modern information technology industry, once remarkably said: “The ability to see perspective costs eighty IQ points”. This is partly what our strategic strength rests on.

In my opinion, you should always choose goals about which you can say: “If we succeed, it will be great.” Whatever new business we take, at first it seems to people, and sometimes ourselves, that we are moving away. We are told: “Why do you go beyond the book trade? Why open branches abroad? Why do you provide trading platforms for other sellers? ”. Fair questions. They need to be asked. But behind each such question there is one thing: it is very difficult for mature companies to master new areas. The fact is that even if new projects will be a huge success, the economy of the enterprise will not feel it soon. I discovered one rule of thumb (I don’t know why it is, but it seems to be true): after planting a seed in the ground, you need to wait five to seven years; only after this time your efforts will noticeably affect the company's economy.

You need to base your strategy on something “eternal”. People who are not related to our company often ask me: “What, in your opinion, will change in the next five to ten years?”. And very rarely they ask me the question: “What will not change in the next five to ten years?” We are in Amazon We always try to understand this, because it is on this that we need to build a strategy. Then the energy that you are investing today in the promotion of the flywheel, and in ten years will bring you dividends. You should not focus on the momentary - who are your competitors, what are their products, what are the technologies and so on. All this is changing so quickly that you will have to review your strategy at the same pace.

For our consumer-oriented business, the most important thing is to understand the needs of the people. What is important to them? Wide selection, low prices, fast delivery. This series, of course, can vary; for example, some companies that work with consumers do not put a price on it. But I can not imagine that in ten years someone would say: “Amazon I like it very much, but they would have delivered the purchases more slowly! ” In the same way, no one will say: "Amazon I like it, but here they would have had prices at least a little higher! ” That is, we know that by improving our work and eliminating shortcomings, we reduce costs and thereby reduce prices. So, we will receive dividends ten years later. And if we become, sparing no effort, constantly unwind this flywheel, then in ten years it will definitely spin even faster. We also believe that the world is steadily becoming more and more transparent, that it is easier to get access to information. This also means that it is strategically reasonable to always look at the business from the client’s point of view. Try to look at marketing in a different way. If in the former world your efforts were distributed approximately like this: 30% for creating high-quality service, and 70% for advertising, then in the new one it's the other way around. Our strategy is based on these pillars, we are convinced of their longevity and are guided by them in our activities. Of course, a day may come when it will turn out that we have been deceived and taken the passing for eternal. Therefore, it is important to have a mechanism that allows time to recognize the error in a carefully thought-out calculations.

There is one old bike about Warren Buffet, as if on his desk there are three boxes: "Inbox", "Outgoing" and "Too complicated". When we have a “too complicated” problem, we walk in a circle and can’t make up our mind, we try to translate it into the category of simpler ones, asking the question: “What is better for people?”.

Our most important decisions sometimes led to tactical losses in the short term. From the very beginning (let's go back to 1995 year), we began to publish on the site customer reviews about the books, including negative ones, which the publishers didn’t like. They threw me letters: “Why are you publishing this on the site? Is it really impossible to leave only positive feedback? ”. And one publisher became quite angry, he began to teach me to the mind: “Maybe you don’t understand what you are earning? You make money when you sell a product. ” But, I remember, then I thought: “No, we make money, not when we sell goods, but when we help visitors decide to buy”.

For some reason it seems to me that I am by nature aimed at customers. I think that is why I always build a strategy with an eye on them, and not, say, on competitors, in which there is nothing wrong either. Some companies achieve excellent results, following the pioneers, and they create excellent methods for comparing their work with theirs. We can talk about such a strategy for a long time. But we went the other way. We do not really pay attention to competitors - no, we will definitely see what they are doing, and, of course, we carry out a comparative analysis on important indicators for us. But we are distinguished from them by the desire to create customer-oriented strategies - we stand on this, and this gives us energy and feeds our excitement. Frankly, I believe that for a rapidly changing environment, such strategies are best suited - for two reasons. First, as I said, people's needs (assuming you understood them correctly) change more slowly than many other things. And, secondly, in rapidly changing conditions, the follower's strategy is not very reliable. After all, what is its meaning: not to be thrust into every nook and cranny itself (so easy to wander into a dead end), but first let them be examined by smaller competitors. And as soon as they find something worthwhile, storm this direction with quadrupled forces. If you act quickly and in more or less stable conditions, then it does not matter that you were not the first - you will lose almost nothing from this. But in our situation, when on the Internet, in technologies, every day something new appears, it is more profitable to be equal to the consumer. This strategy seems to me more successful even if you are in the lead. If the main thing for you is to outrun your competitors, then you unwillingly relax as soon as the comparison shows your primacy. And being equal to the client, you are forced to continuously improve. So there are a lot of advantages. I do not claim that we invented this strategy - many companies follow it - but it penetrated all corners and gaps of our corporate culture and took deep roots.

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We managed not only to turn Amazon into a “customer company”, but also to set a new customer-oriented business standard. After World War II, Morita-san (Akio Morita, one of the founders Sony and for a long time its head) set for Sony target. He wanted the word Sony became synonymous with high quality, but in the long run he dreamed of Japan becoming synonymous with high quality. Such a maximum program inspires. I want many years later to be said about us: “It was they who forced the entire global business to revolve around the consumer.” If it works, it will be very cool.

We repeat the same thing year after year. I constantly talk about how important it is to improve the process of providing information and thinking about consumers, and not looking around at competitors. In addition, we do a lot to ensure that our employees do not lose direct contact with customers, feel what people need. Absolutely all new employees, from chiefs to subordinates, must work for a while in one of the sales centers, and two days in the first year, but this is every two years, in the service department. Everyone should also be able to work in the reference information service.

I passed the recertification about six months ago, although for the first two years I worked a lot with clients. In fact, it is terribly interesting and instructive. And it does not look like hard labor. It seems that these rules are an empty formality, but in fact they have a deep meaning. Following them, we constantly throw coal into the furnace of our locomotive. After all, corporate culture in general is something unshakable. It exists while the company lives, because it attracts people who like it and pushes away those who do not like it. I often hear from managers who have been working with us for a month: “It’s necessary, how do you think about clients here”. Let's say you worked in a competitor-oriented company, and you were very good there. If you come to us, you will say one of two things: “Wow, this is great! Now I understand how to! ”Or“ No, this is not for me. ” You are unlikely to talk about culture, but you will surely keep this in mind. After all, culture is a system that keeps you and does not let go. It is difficult to adopt, although it is a source of a company's competitive advantage, if, of course, it corresponds to its mission. In addition, culture is a voluntary restriction, the rejection of things that “education does not allow you” to do. Formulating the company's strategy, you should always take into account the corporate culture.

I will tell you about the case, which partly determined our fate. In May, 1997, we were declared hopeless by one pundit from business. His argument was simple: the book giant Barnes & Noble I had already opened my online store, and then we had only 125 employees and annual sales of 60 million ... At that time they had thirty thousand employees and sales of three billion. The essence of the report was as follows: Amazon I worked for 2 of the year - and baked. This is a corpse. He called his report “Amazon.Trup”. The name was immediately picked up by journalists, it flashed everywhere, because before that we were like an exemplary infant of internet business. Here, all our employees began to call their parents - most often mothers: “Are you all right? What is this “Amazon Point Corpse”? ”. We had a general meeting - it's not hard when you have all the 125 employees, - and said: “Throw it out of your head. Stop worrying, think - y Barnes & Noble there are more resources than us! ” I then repeated: “Yes, you must wake up in the morning, wet with fear, but not in front of our competitors. Fear our consumers, because they bring us money. Competitors certainly will not bring us money. ”

In my opinion, the most dangerous thing is inactivity errors. And companies do not even analyze them, I mean moments when they could seize the moment and begin to act, and they would have enough experience and knowledge or they could easily get them, but they missed this opportunity. It is the same as knocking oneself into a knitting precisely when it would be necessary to break away from him and raise his eyes.

It is very helpful to ask yourself: “Why not?”. When the opportunity begins to emerge - it seems that you have the experience, and even the advantage, and it looks very tempting, and they say: “Why? Why is this needed? ” But you can just as well ask: "Why not?" You can always find a lot of reasons against: there are not enough capital resources, and right now you need to pay particular attention to another part of the business. If they ask you: “Why not?”, You will answer: “Therefore, because ...”. But this question is usually not asked, which leads to inaction errors.

In fact, it is important for the company to conduct as many experiments as possible for a certain period ... What happens in the end is unknown, and if so, then it would be good to figure out how to conduct more experiments, so that as a result you can get something really worthwhile. It turns out that the main thing is to reduce the cost of experiments. We have a group Web lab, there people are experimenting with the user interface of our website and analyzing statistical data on the intensity of use, looking at which interfaces people like most. For us, this is a large laboratory, and we are trying in every way to reduce the cost of experiments and maximize their number. However, in fact, it is very and very difficult to significantly save on the experiment: sometimes conducting tests in the sense of cost is equivalent to the implementation of a project. But you always have to strive for this. You need to put forward ideas and then find the cheapest ways to find out if they are promising or not.

Sometimes you come up with something and you rejoice: "We will launch this thing, and people will like it." And they don't like it. Once we launched a function - I don’t remember what it was called: we took your order history and found the most similar among millions of our customers. Press the button and see that your twin bought, and you did not. And no one took advantage of it! Such cases, when we introduced innovations, and people did not even notice him, were full. Fortunately, many of our initiatives have justified themselves.

At the same time, you need to understand that it is not always possible to try the water while standing on the shore. Sometimes you have to jump into her headlong. You say: "This project will cost a lot of money - and, therefore, we must resist, but win." You admit that much more will change and there will be steep turns, but with a fervor you take on the task. And, by the way, it is very nice to see that our employees are ready to jump without thinking. That is, we believe this: the main thing is to get involved in a fight, and there we will see. We say: “We will do it. We will figure out how. ”

Reducing the number of defects and improving the quality of work - this is the most important part of our corporate culture and one of the reasons for our popularity with customers. I learned this along the way. By “studying,” I mean that I have mastered several useful techniques like “Six Sigma” and “Lean Manufacturing.” By nature, I am very attentive to trifles, so I can be a good manager - I have this flair, but I did not know how to organize repetitive processes and understand whether they are needed at all. Before Amazon I worked in one hedge fund. The work there was very orderly, analytical, but there was no need to debug standard processes. For example, in a car factory, typical work should be done without rejection, all operations are the same, and in a hedge fund this is not the main thing. But for Amazon the way of execution is very important, our financial statistics speaks about it ... Take, for example, the number of customer calls per unit of goods sold. Clients contact us only if something is wrong. Therefore, we are trying to reduce the number of requests - and for twelve years we have been working better every year. This is the very production management that is being talked about so much. We strive to improve work processes in various fields. Naturally, we started with our sales centers and customer service departments, but then we discovered that this principle is quite suitable for many other sites. When you do not have experience managing orderly processes, you all perceive it as a bureaucracy. But streamlined processes are not bureaucracy. Bureaucracy is a meaningless process; we have enough of this too.

When you create a company, it is your brainchild - at least on the very first day, and you not only think what to do and how, but do it yourself. Then the company grows up, and you start to think what to do, not how. After a while, you mostly think not even what to do, but who will do it. That is, the evolution of the company can be represented as a transition from the question “how?” To “what?” And then “who?”. This is not necessarily done consciously - everything is dictated by circumstances. In my opinion, it is impossible to manage a growing company in another way. That is, the question to the top manager should be: “Are you moving along this path at the right speed?”. Of course, I simplify the picture. In fact, you will still dig deep in certain places. In my memory, absolutely all good, in my opinion, the leaders chose certain specific activities that required special attention, and personally controlled them throughout the chain down to the bottom “how?” ... My concern is to reduce prices, and I carefully I follow the pricing process, delve into everything and talk to people working along the whole chain. I have to be sure that we offer the lowest prices. I consider this very important and therefore participate in the process at all stages.

We have many strong leaders, not only my deputies, but also their subordinates. We have an informal atmosphere, and this, it seems to me, helps people not to agree with me - and not with me alone. In addition, it is important that people can openly voice their thoughts to their boss, vice president, and so on. I am sure that the informal atmosphere is a big plus. But from time to time we argue hoarse and angry with each other.

It is important to be assertive. I always tell the staff that our culture is friendly and assertive, but not so assertive as to bully someone out. The pressure does not prevent us from enjoying work. We try to make it fun for everyone - and we succeed. If serious problems arise, we will get together and laugh at them. Better to laugh than to cry. And we will find a way out. In my opinion, it is necessary to laugh, although for a more formal culture our meetings would seem chaotic. For an hour meeting, we have ten minutes laughing, often I begin. I will remember something funny and I can not help it: “It reminds me of ...”. In the end, someone makes a remark: "Well, yes, very interesting, but we have an agenda ...". And, in my opinion, it turns out great.

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