Amazon's Day One: Allowing Nonfatal Failure

#Amazon There are no ready answers about the future. Users will give you the answers, but never directly. Only when you pay extraordinary attention to them can you detect signs of their latent needs. You cannot see that far ahead in time, but you can look more deeply at what is in front of you. You are not concerned with what to do a year from now, but three, five, seven, ten, even fifteen or twenty years from now. In reality, you are simply asking yourself: beyond this need, what other needs are there? How deeply you can see into needs determines how far you may be able to see at the product level. ---- Founded in 1994, Amazon experienced more than ten major failures in just 26 years, causing billions of dollars in direct losses. It looks like a hesitant company feeling its way forward, without a long-term plan or a map. But the essence of that apparent hesitation is iteration. Bezos says this means continually taking detours through nonfatal failures, approaching success little by little. You cannot charge ahead triumphantly all the way. You will suffer many failures, but they must be nonfatal. Bezos particularly emphasizes this point. Amazon suffered major failures when it first entered new hardware categories. Yet the capabilities accumulated along the way combined with newly discovered needs to form the foundation for the AI assistant Alexa and its voice platform. Amazon keeps approaching and surpassing existing goals through a roundabout, stop-and-start process. On avoiding a loss of competitiveness to rapid imitators, the point was made: fear standing still, not moving slowly. Amazon leaves imitators stuck copying one of its businesses or products, trapping themselves within that boundary and ultimately staying put while Amazon moves ahead. At times Amazon may seem to be going nowhere, but it is actually approaching its next objective through a roundabout, hesitant process, continually surpassing successive goals. Everyone understands the idea of fearing standing still rather than moving slowly. But to keep moving instead of stopping, you need a complete supporting system of culture, processes, and more. Otherwise, any principle becomes a friendly suggestion or a slogan on the wall. ----- Day One Why can Bezos keep Amazon moving? His repeatedly emphasized management philosophy: Day One. First, consider an unconventional management principle, Parkinson's Law, sometimes called organizational paralysis. It says that how much money a project takes depends on how much you give it, and how long it takes depends on how much time you allow. A related principle says that the more people you have, the more people you need to manage relationships among them, naturally leading to still more hiring. More people then require additional people to coordinate relationships with the newcomers. Indirect staff multiply like cancer cells until the organization is overstaffed. The organization's main work becomes handling its own internal affairs. The problems you must address grow larger and more serious as you put more resources into them. The best solution is to have as many people as possible deal directly with customers and solve specific problems. When a company first starts, everyone deals directly with specific customers and solves concrete, real problems. That is the Day One state. Much of a company's growth process is a departure from that state. As a company grows, its unchanging task remains solving customer and market problems. Yet problems snowball during that process. Behind an apparently orderly, tightly organized surface lies growing chaos and disorder. Large amounts of organizational resources and energy are consumed by activities that create no value. This is the state we commonly call increasing entropy, a worsening problem that companies, especially mature giants, must face. Bezos's approach is first to make the culture a Day One culture, while establishing organizational structures and processes that minimize activities that do not create value. ---- One sentence captures Amazon's development, strategy, and management: obsess over customers, just as on the company's first day. ---- #得到 #吳伯凡每周商業評論 — Dedao / Wu Bofan's Weekly Business Commentary