What Amazon’s Jeff Bezos told me about How to Create a Business that Grows Faster & Bigger Than Any Competitor: Three Essentials to Success

Landing in Brazil this week, I peered out the window at the world’s largest river—the Amazon.  It’s home to the planet’s most diverse ecosystem and the greatest single source of oxygen and fresh water known to mankind. As I thought about my upcoming keynote at the International Forum of Management Strategy and Innovation, I remembered my late night interview with Jeff Bezos as snow fell outside in Davos, Switzerland, at the World Economic Forum.  Bezos wanted to create the world’s biggest and best supermarket, and the massive Amazon River was the only word that could even start to embody the size and scope of his ambitions to re-invent the retail world as we know it.

You’re a Cause AND a Company

“You can’t ‘persuade’ people to believe in you. You have to prove it with actual results. Sounds obvious, perhaps, but too often brands because they think they can just market your way to a real reputation. It’s steak AND sizzle, isn’t it!”  Bezos let out his trademark laugh/guffaw, and slapped his hand on the table.

That’s why Amazon was unprofitable for the first 5 years, and even though the investors were screaming for an exit, Bezos stayed the course and remained devoted to his vision. “It took us awhile to figure out how to get every detail right, and once you think you’re good at it, check again!  You’re dead if you think others around you aren’t getting better at it too!  We’re still figuring that out now with fresh groceries.”

This practice is a mix of “Fanatic Discipline” and “Productive Paranoia”.  I’d never suggest becoming so paranoid as to abandon your ambitions, but what our research showed about the most Admired, fastest growing companies is that they never took success for granted–their paranoia led them to be productive with daily improvements in a fanatically disciplined way.

As Bezos told me, “Amazon had to invent our brand for the first time. (And we’ve never stopped reinventing it!) In the beginning, we had to demonstrate we could actually beat (or match) conventional stores in three ways that you can’t fake.”

“Think about it, this was a time when people still doubted the safety of online purchases,” Bezos giggled. “Can you imagine a day when customers said, you do NOT have to provide these 3 essentials for long term success?

1) higher quality AND selection
2) faster delivery
3) greater value as the customer defines it — which is not always the cheapest product — but the one that meets or exceeds your expectations.”

“People don’t say: I wish you’d deliver slower and charge more!” Bezos smiled.

I celebrated Jeff Bezos’ never-ending ambitions — from Amazon’s start as an online bookstore to becoming the world’s largest retailer — during my keynote at an Expo2020 Innovation event in Dubai this week. I was honored to be there with my clients from Schwab, Coca Cola, Cisco, Hershey’s, Virgin, Rolls Royce and others.

One of the most critical distinctions between growth companies like these and other companies is the difference that their leaders make in creating and sustaining a growth culture. Jeff Bezos did it with humor, consistency and an undying devotion to learning from customers that continues to drive Amazon’s growth today. In contrast, Steve Jobs lead with the inspiring brilliance of an inventor and the intimidating emotional demeanor of a mad scientist! No two organizations or leaders will have exactly the same recipe for success, but those who encourage productive paranoia and build a culture of listening to and learning from customers are able to sustain growth and achieve lasting success.

For more insights, tune in to the podcast of Mark’s Oct. 22nd interview on the Dubai Eye “Business Breakfast” radio news show. http://www.dubaieye1038.com/business-breakfast-podcasts/

How Sir Richard Branson Wins Loyalty – the 3 R’s of Trust…

There are three things that galvanize trust. In our research, we identified 37 different variables of trust, but three things stand out more than the others. We call them the 3 R’s of Trust – Responsibility, Reliability and Responsiveness. When something goes wrong – as things inevitably do in any business – we have to be RESPONSIBLE for it. We have to step up, take responsibility and then take action to make things right. RELIABILITY – An admired brand should have an ‘implied guarantee.’ Customers expect high quality products, products that a company will stand behind, so RELIABILITY is key to trust and customer loyalty. A new PhD at Stanford did a study on the difference between “guilt” and “shame”. People who expressed “guilt” when they made a mistake were the first ones to get up and do something about it. They are the first ones to make something happen, make it better, be responsible. This impulse to take action is the third key factor in trust – RESPONSIVENESS. Shame, on the other hand, is saying, “Circumstances were out of my control,” or, “It was out of my hands…it’s her fault…or their fault”. Shame is the “blame game”.

From the outset, when Richard Branson suggested that he was going to start an airline, people didn’t believe that he would succeed. Branson said that his Board of Directors was “apoplectic” when he set out to start Virgin Atlantic, but in his heart he knew that someone must be able to make traveling on airlines a more pleasant experience.  On the first flight of Virgin Atlantic Airlines, Sir Richard Branson had the plane packed with dignitaries, press and VIP’s. The plane had just arrived from Boeing, hadn’t gone through full inspection and less than a minute into the flight one of the engines exploded with a bang and the plane had to make an emergency landing.

A couple of days later, Richard’s banker appeared at his home and told him that he was pulling all of the funding and going to put the airline out of business. “I just shook,” Branson said, “I couldn’t believe he was willing to put 5,000 people out of their jobs and out on the street so quickly.” When the crisis first hit, Richard said that he put all of his energy into finding out who to blame – but quickly realized that no matter how much he blamed the banker or the explosion or anyone else, he still had to deal with the issue. As a leader, your top priority has to be to solve the problem – to accept the guilt and try to save the day. So he focused instead on setting things right and finding the best solution.

Leaders who respond with a sense of guilt were more prone to be admired and maintain long term success. They are the ones who walk the walk when they say “the buck stops HERE!” No one expects you to be perfect as a leader or a team member; in fact many people are just waiting for the boss to screw up so that they can take them down a notch. The difference between Good and Great leaders is not perfection – it’s a commitment to finding solutions without focusing on blame. Blame won’t solve a crisis. But, if you dedicate yourself to being responsible, reliable and responsive – that’s how you solve difficult crises, build trust and gain loyalty. Richard showed a loyalty to his cause – creating a better flying experience, a loyalty to the team of thousands who joined his cause and has Virgin Airlines today is one of the world’s top ranked airlines.

Four Key Traits of the Most Admired Organizations

Four key traits are common to all of the Most Admired Organizations from our study of over 27,000 organizations in 110 countries –a commitment to “fanatic discipline”, “productive paranoia”, creativity, and ambition were essential to long term organizational success.

First, and most importantly, Most Admired organizations exhibit “fanatic discipline”. Jim Collins describes fanatic discipline as a consistency of action and a willingness to do whatever it takes to achieve a great outcome. In Most Admired organizations, this discipline is applied to achieving a deep level of customer intimacy – where you understand not only how your products are used, but truly how they integrate into the lives of the people who use them. Steve Jobs didn’t invent the PC, the mp3 player or smart phones – rather, he reinvented these ideas and made them accessible in new ways. He created products that became a “compelling lifestyle experience” by continually asking, “How are we going to become a part of our customers’ lives?”

The second trait is “Productive Paranoia”. This is not a paranoia based on fear or hiding from reality – instead it is the willingness to look at your competitors and what they are doing right. It is essential to know that while you don’t want to be your competitor, you must understand what draws some of the market to choose your competitors. In most industries, billions of dollars are being spent among a number of competitors and it is imperative to understand what your competitors have going for them as well as their potential weaknesses.

Creativity – it is a given, almost a cliché, that every employee in a Most Admired company is expected to innovate and be creative – but in this case, I’m talking about ‘empirical creativity’. What is empirical creativity and how do you achieve it? Gaining an intimate understanding about your customers leads to developing more creative solutions for them. You can’t be afraid to ask – to admit that you don’t already know everything. You have to allow your customers into the innovation process with you. You have to understand their definition of success as well as your own. The humility to ask and listen leads to greater understanding of your customers, more creative solutions, and longer relationships. The organizations that know more about their customers win their customers’ loyalty.

Finally, another key factor is ambition – a continued sense of “staying hungry” even after achieving great success. Ambition in this sense is key to what Jim Collins calls “Level 5 Leadership”.  Level 5 leaders are those who reject the “Tyranny of the OR” and embrace the “Genius of the AND”. The Most Admired leaders are AND thinkers. What can we do to grow AND increase quality? What can we do to be ambitious about our brand AND be humble enough to listen? The Most Admired leaders know that long term success requires both ambition and humility.

Organizations that continue to think this way – who are disciplined, assertive and continually set “Big Hairy Audacious Goals” are the ones who go on to become #1 in their industries. They don’t rest on their laurels after achieving their goals, they set new ones. Those that don’t continue to set new BHAG’s to accelerate growth lose their mojo and their leadership positions. In the thousands of organizations that we studied, the companies that didn’t set new goals and tried to coast were out of the pole position within 3-5 years, and often out of business in 10 years. “Accelerating growth” turns out to be a critical core competency of the 10X and Most Admired organizations.

Fanatic discipline enables you to continue to deliver great products of high quality and productive paranoia keeps you aware of the strengths and weaknesses of your competitors. Ambition ensures that you continue to innovate and not rest on your laurels. Humility allows you to listen and develop a deep level of customer intimacy where customers feel more like partners knowing that you are committed to their success as well as your own. A commitment to all four of these key factors of Most Admired organizations leads to 10X performance and long term success.