60 Minutes: Complaining is Not a Strategy

by | Apr 30, 2014 | Blog

Unlike most people, my fascination with Charlie Rose’s Jeff Bezos Dec. 1 interview really had little to do with the idea of delivery drones.  Instead, I found myself admiring how consistent and “on point” Jeff Bezos has been over the years, and realized that most of world still doesn’t get what’s he’s really up to.

bezos and rose

Get What?

Jeff understands that if you are not “inventing” for your customers and improving their experience and value every day (even in ways that often hurt short-term financial results), then someone else will.  And as we saw in the interview, sometimes the mere threat of some new paradigm-shifting innovation is enough.  There was nothing new in this interview regarding focus, strategy or belief—that’s the consistency that has been messaged since Jeff’s first shareholder letter in 1997.  The “big secret” of the drones was simply great PR copy that was timed perfectly—the day before Cyber Monday.

What We Learned 

–          The real lesson from the drones is that Amazon believes (and wants all of its competitors to know) it can continue to “invent and simplify” on fulfillment.  Amazon has always prioritized reducing the friction (time, money, effort) between “ordering” and “delivery.”  As radical and controversial as the idea may seem today, the drones are perfectly in line with this strategy. Meanwhile, the discussion on optimizing space utilization within warehouses with random item storage was insightful.  I was particularly intrigued to learn that they have “doubled the storage in a fulfillment center over the last five years.”

–          As suspected, Amazon Fresh was incubated in the Seattle area for five years to get the financial model right.  A lot of “getting the financials right” included development of completely new supply chain and delivery infrastructure and systems, and understanding the item selection needed to attract customers.  As a customer of Amazon Fresh since launch, I’ve seen great incremental improvements.  For example, the type of packaging the efficiency of packaging they use much improved.  I would expect major expansion of Amazon Fresh over the next five years in major metropolitan markets.  The real driver of expanding Amazon Fresh is also making sales tax a universal mandate for ecommerce—now Amazon does not have to manage its physical presence in new states to optimize sales tax collection.

–          Having a long-term investment philosophy allows Amazon to act very differently in investments and growing markets. While most companies look for ROI in two or three years (often shorter), switching to “the long view” of five to seven years changes the nature of investment and completion.

–          On disruption, Jeff was very straightforward and authentic.  You have to “earn your keep in this world” and deliver value to customers.  When Charlie Rose asked whether other retailers were voicing concerns about Amazon’s advantages and size, Jeff’s response was a great call to action for others—“Complaining is not a strategy.”  I’m not sure if this is an original Jeff quote or not, but it is another blaring wake-up call to competitors.

–          Two great examples of disruption were discussed. The first, Amazon Fashion, is interesting as it shows Amazon building vertical capabilities in the fashion and apparel business.  “Amazon Fashion Studios” is building proprietary capabilities for photo and video image capture and processing.  It is estimated that they are taking 3,000 images a day! Amazon is going up-stream in design, forming partnerships with designers and brands.  This type of vertical expansion is a common approach for Amazon.

–          The second example of disruption was in a similar vertical expansion in an industry.  Amazon Studios is innovating the way shows are selected, developed and produced.  Jeff discussed how they are “changing the green lighting process.”  Instead of Hollywood tastemakers selecting, Amazon Studios is crowdsourcing the selection process.

–          Finally, the drones.  Unsurprisingly, this is the point that 99 percent of the press focused on from this interview.  Great PR for Amazon.  Just having the “what if” curiosity and willingness to explore shows how Amazon is a different type of company.

Everything Must End

Given the “long term thinking” orientation of Bezos, his perspective on company duration was insightful and deterministic.  “Companies have short life spans; Amazon will be disrupted someday.  I don’t worry about it because I know it is inevitable”.  The rate of failure, especially in technology oriented companies, is accelerating as large companies have an improbable objective of transitioning business models (for example from software to cloud offering) and as new upstarts can scale at a much faster rate and lower capital barrier due to new architectures.  Much of Amazon’s drive to “invent and simplify” is driven from the belief that not changing is certain death.

As in this fantastic interview with Jeff Bezos, my forthcoming book on the leadership principles of Amazon doesn’t divulge much in the way of “new” or secret insights. Instead it further frames, explains and synthesizes both Amazon’s aggressive, diverse strategy and its singular culture.

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