Here he is, Amazon ceo Jeff Bezos, talking in his annual letter to shareholders about modeling his business culture on who you are and what you do and how you do it and what it takes:
From very early on in Amazon’s life, we knew we wanted to create a culture of builders – people who are curious, explorers. They like to invent. Even when they’re experts, they are “fresh” with a beginner’s mind. They see the way we do things as just the way we do things now. A builder’s mentality helps us approach big, hard-to-solve opportunities with a humble conviction that success can come through iteration: invent, launch, reinvent, relaunch, start over, rinse, repeat, again and again. They know the path to success is anything but straight.
Isn't it fascinating that the leader of one of the universe's most innovative entities ever would aspire to the mindset, disciplines, character traits, and courage of builders?
Or might you detect a note of irony here?
On the surface of it, Bezos' letter--in what it addresses head-on and what it conspicuously omits--is a well-crafted paean to Ninja skills of balance between execution in the present and investment in the future, including its unknowns. He writes:
Sometimes (often actually) in business, you do know where you’re going, and when you do, you can be efficient. Put in place a plan and execute. In contrast, wandering in business is not efficient … but it’s also not random. It’s guided – by hunch, gut, intuition, curiosity, and powered by a deep conviction that the prize for customers is big enough that it’s worth being a little messy and tangential to find our way there. Wandering is an essential counter-balance to efficiency. You need to employ both. The outsized discoveries – the “non-linear” ones – are highly likely to require wandering.
Fortune's Chris Morris tags four "take-away" messages in the Bezos letter, the first left unsaid.
- Antitrust scrutiny is a looming threat: of course, antitrust scrutiny is an exogenous force, but the deeper, more strutural matters are the issues of privacy, security, transparency and trust.
- 'Multibillion-dollar failures' are coming to Amazon
- Bezos issues a minimum wage challenge
- Look for more Amazon brick and mortar stores
For stock-watchers, retail competitors, and fellow Silicon Valley mega techs, these highlights certainly amount to take-away value from the Bezos annual letter.
For home builders, residential investors, developers, manufacturers, distributors, trades, and other invested construction players, the "what you need to know and why it matters" is slightly different. We'll be in total immersion mode on these issues at our upcoming Housing Leadership Summit, 2020 Foresight: How Leaders Shape What's Next, in just over two weeks, May 13-15, at the Ritz Carlton, Laguna Niguel. We're running out of space at the hotel and for the conference, so link here to register now.
I was interested, for instance, in how Bezos writes about the "independent" third-party sellers who now account for 58% of gross merchandise sales sold on Amazon. The take-away for builders here is the attitude, behavior, and belief-system that characterizes the way Bezos looks at these businesses, which feed off the Amazon mothership, and in many ways compete with it, but whose business success is part of the blood of life and growth for Amazon itself.
When Bezos writes this, what's a home builder to think,?:
We helped independent sellers compete against our first-party business by investing in and offering them the very best selling tools we could imagine and build. There are many such tools, including tools that help sellers manage inventory, process payments, track shipments, create reports, and sell across borders – and we’re inventing more every year. But of great importance are Fulfillment by Amazon and the Prime membership program. In combination, these two programs meaningfully improved the customer experience of buying from independent sellers. With the success of these two programs now so well established, it’s difficult for most people to fully appreciate today just how radical those two offerings were at the time we launched them. We invested in both of these programs at significant financial risk and after much internal debate. We had to continue investing significantly over time as we experimented with different ideas and iterations. We could not foresee with certainty what those programs would eventually look like, let alone whether they would succeed, but they were pushed forward with intuition and heart, and nourished with optimism.
Hopefully, home builders--as they get bigger, more consolidated and concentrated, more technologically sophisticated, and more cyclically-hedged in their business models--will think that this commentary may speak to the kinds of relationship dynamics they should be modeling with manufacturers, the procurement value chain, skilled labor, developers, all of the "third-party" stakeholders in their ecosystem. If builders begin to see the success--and healthy competitive challenge--of those third-party players as necessary to removing friction, pain, and other barriers from customers' experience of buying a new home, it would be a transformational moment.
It would redefine the supply chain, because it would give new meaning to who the supplier is and who the buyer is.
Secondly, going straight at the jugular of the worst pain points in a customer's journey map. For Amazon and its plans for Go stores, the job technology and vision had to do was to solve for creating a great physical store experience by--in the words of John Maeda--"subtracting the obvious and adding the meaningful." Here's how Bezos puts it:
For many years, we considered how we might serve customers in physical stores, but felt we needed first to invent something that would really delight customers in that environment. With Amazon Go, we had a clear vision. Get rid of the worst thing about physical retail: checkout lines. No one likes to wait in line. Instead, we imagined a store where you could walk in, pick up what you wanted, and leave.
Getting there was hard. Technically hard. It required the efforts of hundreds of smart, dedicated computer scientists and engineers around the world. We had to design and build our own proprietary cameras and shelves and invent new computer vision algorithms, including the ability to stitch together imagery from hundreds of cooperating cameras. And we had to do it in a way where the technology worked so well that it simply receded into the background, invisible. The reward has been the response from customers, who’ve described the experience of shopping at Amazon Go as “magical.” We now have 10 stores in Chicago, San Francisco, and Seattle, and are excited about the future.
We know we're on the brink of transformation when it comes to "pain points" in the new home buying process. Click-to-buy, digital mortgage, personalization of floorplans and finishes, pricing and financing options, lot premiums, etc. It's all happening, or about to. Your buyers want the magic. Make it happen.
Finally, and most important. People. It's more than an issue of minumum wages, although, in home construction and the trades, that's certainly a matter of the moment. Invest in people--at all levels, inclusively, diversely, across geographies, disciplines, and passions. They are your tomorrow, and us, our businesses, our successes in the present, and our current strengths are all borrowed from them.
Bezos notes:
Many of the other programs we have introduced for our employees came as much from the heart as the head. I’ve mentioned before the Career Choice program, which pays up to 95% of tuition and fees towards a certificate or diploma in qualified fields of study, leading to in-demand careers for our associates, even if those careers take them away from Amazon. More than 16,000 employees have now taken advantage of the program, which continues to grow. Similarly, our Career Skills program trains hourly associates in critical job skills like resume writing, how to communicate effectively, and computer basics. In October of last year, in continuation of these commitments, we signed the President’s Pledge to America’s Workers and announced we will be upskilling 50,000 U.S. employees through our range of innovative training programs.
Our investments are not limited to our current employees or even to the present. To train tomorrow’s workforce, we have pledged $50 million, including through our recently announced Amazon Future Engineer program, to support STEM and CS education around the country for elementary, high school, and university students, with a particular focus on attracting more girls and minorities to these professions. We also continue to take advantage of the incredible talents of our veterans. We are well on our way to meeting our pledge to hire 25,000 veterans and military spouses by 2021. And through the Amazon Technical Veterans Apprenticeship program, we are providing veterans on-the-job training in fields like cloud computing.
You'd almost think from reading Bezos' words about the training, the education, the ideas, the initiatives, the fanatical focus, and the commitment to these people, that he was writing and talking about the people he cares about the most in the universe, customers.
He is.
Your employee team members, associates, staff, trusted leadership, etc. today, and their ability to impact and inspire and impress their values on your team members of tomorrow are your customers. Flat out. That's take-away No. 1.
