Jeff Bezos on Day 1 vs Day 2

I love this letter from Jeff Bezos and wanted to quote it at length. The full letter is at Recode.

 2016 Letter to Shareholders

April 12, 2017

“Jeff, what does Day 2 look like?”

That’s a question I just got at our most recent all-hands meeting. I’ve been reminding people that it’s Day 1 for a couple of decades. I work in an Amazon building named Day 1, and when I moved buildings, I took the name with me. I spend time thinking about this topic.

“Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.”

To be sure, this kind of decline would happen in extreme slow motion. An established company might harvest Day 2 for decades, but the final result would still come.

I’m interested in the question, how do you fend off Day 2? What are the techniques and tactics? How do you keep the vitality of Day 1, even inside a large organization?

Such a question can’t have a simple answer. There will be many elements, multiple paths, and many traps. I don’t know the whole answer, but I may know bits of it. Here’s a starter pack of essentials for Day 1 defense: customer obsession, a skeptical view of proxies, the eager adoption of external trends, and high-velocity decision making.

True Customer Obsession

There are many ways to center a business. You can be competitor focused, you can be product focused, you can be technology focused, you can be business model focused, and there are more. But in my view, obsessive customer focus is by far the most protective of Day 1 vitality.

Why? There are many advantages to a customer-centric approach, but here’s the big one: customers are always beautifully, wonderfully dissatisfied, even when they report being happy and business is great. Even when they don’t yet know it, customers want something better, and your desire to delight customers will drive you to invent on their behalf. No customer ever asked Amazon to create the Prime membership program, but it sure turns out they wanted it, and I could give you many such examples.

Staying in Day 1 requires you to experiment patiently, accept failures, plant seeds, protect saplings, and double down when you see customer delight. A customer-obsessed culture best creates the conditions where all of that can happen.

Resist Proxies

As companies get larger and more complex, there’s a tendency to manage to proxies. This comes in many shapes and sizes, and it’s dangerous, subtle, and very Day 2.

A common example is process as proxy. Good process serves you so you can serve customers. But if you’re not watchful, the process can become the thing. This can happen very easily in large organizations. The process becomes the proxy for the result you want. You stop looking at outcomes and just make sure you’re doing the process right. Gulp. It’s not that rare to hear a junior leader defend a bad outcome with something like, “Well, we followed the process.” A more experienced leader will use it as an opportunity to investigate and improve the process. The process is not the thing. It’s always worth asking, do we own the process or does the process own us? In a Day 2 company, you might find it’s the second.

…Good inventors and designers deeply understand their customer. They spend tremendous energy developing that intuition. They study and understand many anecdotes rather than only the averages you’ll find on surveys. They live with the design.

Embrace External Trends

The outside world can push you into Day 2 if you won’t or can’t embrace powerful trends quickly. If you fight them, you’re probably fighting the future. Embrace them and you have a tailwind.

These big trends are not that hard to spot (they get talked and written about a lot), but they can be strangely hard for large organizations to embrace. We’re in the middle of an obvious one right now: machine learning and artificial intelligence.

High-Velocity Decision Making

Day 2 companies make high-quality decisions, but they make high-quality decisions slowly. To keep the energy and dynamism of Day 1, you have to somehow make high-quality, high-velocity decisions. Easy for start-ups and very challenging for large organizations. The senior team at Amazon is determined to keep our decision-making velocity high. Speed matters in business – plus a high-velocity decision making environment is more fun too. We don’t know all the answers, but here are some thoughts.

First, never use a one-size-fits-all decision-making process. Many decisions are reversible, two-way doors. Those decisions can use a light-weight process. For those, so what if you’re wrong?

Second, most decisions should probably be made with somewhere around 70% of the information you wish you had. If you wait for 90%, in most cases, you’re probably being slow. Plus, either way, you need to be good at quickly recognizing and correcting bad decisions. If you’re good at course correcting, being wrong may be less costly than you think, whereas being slow is going to be expensive for sure.

Third, use the phrase “disagree and commit.” This phrase will save a lot of time. If you have conviction on a particular direction even though there’s no consensus, it’s helpful to say, “Look, I know we disagree on this but will you gamble with me on it? Disagree and commit?” By the time you’re at this point, no one can know the answer for sure, and you’ll probably get a quick yes.

This isn’t one way. If you’re the boss, you should do this too. I disagree and commit all the time.

…Fourth, recognize true misalignment issues early and escalate them immediately. Sometimes teams have different objectives and fundamentally different views. They are not aligned. No amount of discussion, no number of meetings will resolve that deep misalignment. Without escalation, the default dispute resolution mechanism for this scenario is exhaustion. Whoever has more stamina carries the decision.

“You’ve worn me down” is an awful decision-making process. It’s slow and de-energizing. Go for quick escalation instead – it’s better.

So, have you settled only for decision quality, or are you mindful of decision velocity too? Are the world’s trends tailwinds for you? Are you falling prey to proxies, or do they serve you? And most important of all, are you delighting customers? We can have the scope and capabilities of a large company and the spirit and heart of a small one. But we have to choose it.

Amazon’s Leadership Principles

Jeff Bezos recent shareholder newsletter has received much praise in the tech press. Inc drew special attention to his principle of “Disagree and commit.”

When I read the article, this principle felt familiar to me, then I remembered where I had seen it before. It is the 13th Amazon Leadership Principle:

“Have Backbone; Disagree and Commit

Leaders are obligated to respectfully challenge decisions when they disagree, even when doing so is uncomfortable or exhausting. Leaders have conviction and are tenacious. They do not compromise for the sake of social cohesion. Once a decision is determined, they commit wholly.”

The rest of the principles are also well worth remembering.

See also:

Communication is Failure



Communication is Failure

An interesting discussion last week over on the Pickax retailers episode of the Exponent podcast . Ben and James were discussing Ben’s hugely popular Amazon article The Amazon Tax.

It is a great discussion and well worth the listen, especially about how in many ways Apple and Amazon resemble their org charts. Apple has a single P&L – and they go all in for perfectly integrated appliances that fit perfectly into their ecosystem. Amazon is like AWS, an assembly of modular “primitives” (storage, compute, DB) all interacting through very well defined protocols and interfaces. So much for Steve Sinofsky’s “don’t ship the org chart” !

One thing I learned is that Amazon’s Jeff Bezos considers communications to be a sign of failure. Increased communications signals issues a failure to define interfaces. At Amazon they do not use PowerPoint because Bezo’s says “the details get lost between the bulletpoints”. Instead they use Word documents for meeting briefings. Maximum 6 pages . No powerpoint in Amazon meetings only maximum 6 page Word doc because if you cannot explain it in writing you have not thought about it enough to justify a meeting.

Love that.

Miller’s Law

From Wikipedia:

Miller’s law, part of his theory of communication, was formulated by George Miller, Princeton Professor and psychologist.

It instructs us to suspend judgment about what someone is saying so we can first understand them without imbuing their message with our own personal interpretations.

The law states: “To understand what another person is saying, you must assume that it is true and try to imagine what it could be true of.”[1] [2]

The point is not to blindly accept what people say, but to do a better job of listening for understanding. “Imagining what it could be true of” is another way of saying to consider the consequences of the truth, but to also think about what must be true for the speaker’s “truth” to make sense.

Clay Shirky on Culture Cones


Last month (January 2014) Clay Shirky gave a talk at Microsoft (50mins with Q&A). He took the opportunity to float some new ideas he has about Culture Cones, a metaphor he has borrowed from the physics concept of light cones.

He starts the description of the concept at 12m 45s into the talk.

Imagine two observers. The first is one light year from a supernova, the other is two light years away from the supernova.  If the supernova explodes with a flash, the event will "happen" one year later to the first observer and two years later to the second observer. One sees it a year before the other.

So it is with cultural events and memes. Culture cones move through networks like light cones through space.

Shirky asks, "When was the first time you heard about bitcoin?", a culture cone moving though society right now.

Less connected people experience these events much later. They just saw the supernova flash no matter how long ago it actually happened. Technologists have this all the time when their family eventually ask them about some new thing that is actually old, "So what’s this Tor thing?"

It’s worth watching the talk. He even mentions Boyd’s and OODA loops.

Clay Shirky – Social Computing Symposium -16 January 2014

How to ask good questions

Surprisingly important skill that most of us are bad at. In a nutshell:

  • Don’t ramble on—terminate the sentence at the question mark.
  • Get comfortable with silence.
  • Start with “who, what, when, where, how, or why” for more meaningful answers.
  • Don’t fish for the answer you want.
  • Stop nodding if you don’t understand—ask a follow-up instead.
  • If you get a non-answer, approach it again from a different angle.
  • Rephrase the answer in your own words.
  • Don’t be afraid to ask dumb questions.

Read on: 

Jerry Weinberg’s ten laws of trust

Jerry Weinberg is a legend in Project Management and Consulting circles. Here are his 10 Laws of Trust:

1. Nobody but you cares about the reason you let another person down.
2. Trust takes years to win, moments to lose.
3. People don’t tell you when they stop trusting you.
4. The trick of earning trust is to avoid all tricks.
5. People are never liars—in their own eyes.
6. Always trust your client—and cut the cards.
7. Never be dishonest, even if the client requests it.
8. Never promise anything.
9. Always keep your promise.
10. Get it in writing, but depend on trust.

Conferences That Work | Jerry Weinberg’s ten laws of trust

Mental Tougness for Managers

I am enjoying the podcasts from the American Management Associations (AMA) podcast series Edgwise.

Today I listed to an interesting interview with  Dr. Graham Jones, an world expert on Mental Toughness. Well worth a listen.

What does Lebron James have in common with Warren Buffet? Whether we’re getting ready for the big game or the big meeting, we all deal with high pressure situations; it’s natural to everyone on the job and a reality of the workforce. In his new book Thriving on Pressure: Mental Toughness for Real Leaders, Dr. Graham Jones encourages us to channel that pressure and make the hard decisions.

Dr. Jones is formerly professor of Elite Performance Psychology at the University of Wales in Bangor. An author of 150 White Papers in publications on the subject of high level performance. He is the Founding Director of Lane4 Management Group Limited, which is a leading performance in consultancy that has offices in the U.S. and around the world.

Graham Jones on Mental Toughness » AMA Edgewise