By Stuart R. Levine
Published in Forbes
Amazon’s success as the first trillion dollar retailer, combined with its founder and CEO, Jeff Bezos being named the 4th richest man in America by the recently released Forbes 400 list, certainly draws a lot of attention to this company. These last few weeks, the spotlight has been on Amazon’s culture based upon The New York Times article, Inside Amazon: Wrestling Big Ideas in a Bruising Workplace, by Jodi Kantor and David Streitfeld, August 15, 2015. It’s worth discussion on how different CEOs set the culture and behavioral expectations in order to achieve results.
This subject is highly relevant in terms of significant changes in the global, competitive landscape requiring responsiveness to this change as well as talent issues related to this important leadership subject. In 1990, 5% of the Fortune Global 500 came from emerging markets. In 2013, this number was 26%. It is predicted that by 2025, it will be an astonishing 45%.
Within the last two decades, between 1990 and 2010, 1.2 billion people have entered the consumer class and it is predicted that by 2025 another 1.8 billion people will create a doubling of global consumption to $64 trillion. Without any changes in productivity growth, GDP growth is expected to fall to 2.1% globally and 1.9% in developed countries over the next 50 years. Those hit hardest from the drop in global profits will be North American and western European countries, moving from 10% of global GDP to 7.9% in the next decade – returning to levels from 1980.
With state and family owned businesses globally in countries like China, India and Brazil, focusing on the longer term view of top line growth rather than quarterly earnings, these different operating philosophies and tactics are reshaping where smart employees are going to work as well as the reshaping of industries. Size is not reducing speed or agility and the mindset of tech firms like Spotify, Twitter, Pinterest and Yelp – to increase revenue at the expense of profits, is enabling founder controlled firms to have 60% faster revenue growth.
Amazon’s established culture, as reflected in their 14 Leadership Principle, has been designed by Bezos, to reflect the behaviors that he feels will best enable Amazon to continue to compete effectively by improving, learning and evolving to better serve its customers. Bezos even goes so far as to say that his only job is to create this culture. It’s worth mentioning these 14 Leadership Principles: Customer Obsession; Ownership; Invest and Simplify; Are Right, A Lot; Hire and Develop The Best; Insist on the Highest Standards; Think Big; Bias for Action; Frugality; Learn and Be Curious; Earn Trust; Dive Deep; Have Backbone-Disagree and Commit; and Deliver Results. An organization’s culture can be defined as the company’s prevailing ideas, value, attitudes, customs and beliefs that guide the way employees think, feel and act. A company’s culture directly impacts the decisions and actions of that organization. People not demonstrating these values will not fit into the culture for long and will either be asked to leave or will leave on their own.
Amazon has proclaimed that these Leadership Principles are just one of the things that makes Amazon “peculiar”. Peculiar can be defined as foolish, silly, unusual, curious, unexpected, atypical or out of the ordinary. This reminds me of Steve Jobs commencement address to Stanford University approximately ten years ago. His closing words were “Stay Hungry. Stay Foolish.” So what does the word “foolish” have to do with “peculiar”? The creation and execution of absurd ideas are probably only achieved by having the courage and intuition as Jobs shared, to follow your heart and intuition. Not letting the noise of others’ opinions drown out your own inner voice, is what Jobs recommended to those college graduates. If both Jobs and Bezos, both known to be individuals striving for continuous learning, lacked this distinctive and intuitive passion for improvement and evolution, the incredible innovation of both Apple and Amazon would not exist as we know them.
Many have criticized the old fashioned male dominated models where only the young and the childless can compete with the never-ending work hours, overpromising and over-delivering cultures. Companies like Facebook and Google and private equity firms, that are paying for both baby and nanny to fly with their employees during the first year after birth, or shipping breast milk or paying for the freezing of eggs for working women, are providing perks to create a better culture to attract the best talent and create a more engaged workforce. What these companies are trying to achieve, in different ways, is organizational resiliency – where people are banging into each other like atoms and learning through intellectual curiosity combined with customer obsession. They are requiring demanding, smart people at all levels.
Amazon has made its decision on what kind of a company it wants to be. You may not like it or want to work there, but the results speak for themselves. That’s the beauty of capitalism and free choice. Companies have different personalities and it’s up to employees to do their due diligence to determine whether it’s a good cultural fit before working there.