Leadership and Culture
  • Being CEO requires lots of unnatural motion. From an evolutionary standpoint, it is natural to do things that make people like you. It enhances your chances for survival. Yet to be a good CEO, in order to be liked in the long run, you must do many things that will upset people in the short run. Unnatural things. - Hard thing about hard things

  • The knowledge worker cannot be supervised closely or in detail. He can only be helped. But he must direct himself, and he must direct himself toward performance and contribution, that is, toward effectiveness.

  • Most discussions of the executive’s task start with the advice to plan one’s work. This sounds eminently plausible. The only thing wrong with it is that it rarely works. The plans always remain on paper, always remain good intentions. They seldom turn into achievement. Effective executives, in my observation, do not start with their tasks. They start with their time.
  •  - Effective Executive

Culture


  • Create a religious experience
  • Every member working effectively as a singular unit to achieve something greater than any single people can do.
  • Have a method of keeping track of mistakes that were made so you can improve upon them. Punish people for not telling you about mistakes not for making them.

  • Zappos Book
  • Principles / How to create an environment where each member pushes each other.
  • Varietites of Religous experiences
  • Bell Labs / Xerox Parc
  • Russian Space Towns

Amazon

  • Principles: Long Term Thinking, Free Cash Flow, Customer Obsessiveness
  • “customer obsession rather than competitor focus, heartfelt passion for invention, commitment to operational excellence, and a willingness to think long-term.”

  • Long Term Thinking: Described it in the first letter
  • This was their core principle that they did not waver from ever.
  • “Long-term thinking is both a requirement and an outcome of true ownership.”
  • “Long-term thinking levers our existing abilities and lets us do new things we couldn’t otherwise contemplate.”
  • “More fundamentally, I think long-term thinking squares the circle. Proactively delighting customers earns trust, which earns more business from those customers, even in new business arenas. Take a long-term view, and the interests of customers and shareholders align.”
  • Kill Projects that don’t bring long term benefits, but experiment widely
  • “a big part of the challenge for us will lie not in finding new ways to expand our business, but in prioritizing our investments.”
  • “We must be committed to constant improvement, experimentation, and innovation in every initiative.”
  • Maximize Cashflow
  • “Why focus on cash flows? Because a share of stock is a share of a company's future cash flows, and, as a result, cash flows more than any other single variable seem to do the best job of explaining a company's stock price over the long term.”
  • Cost Conscious Culture / Work Lean
  • Scaling and reinvest profits on growth
  • Customer Obsessiveness
  • “Listen to customers, but don’t just listen to customers – also invent on their behalf.”
  • “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.”
  • “One thing I love about customers is that they are divinely discontent. Their expectations are never static – they go up. It’s human nature. We didn’t ascend from our hunter-gatherer days by being satisfied. People have a voracious appetite for a better way, and yesterday’s ‘wow’ quickly becomes today’s ‘ordinary’. I see that cycle of improvement happening at a faster rate than ever before. It may be because customers have such easy access to more information than ever before – in only a few seconds and with a couple taps on their phones, customers can read reviews, compare prices from multiple retailers, see whether something’s in stock, find out how fast it will ship or be available for pick-up, and more. These examples are from retail, but I sense that the same customer empowerment phenomenon is happening broadly across everything we do at Amazon and most other industries as well. You cannot rest on your laurels in this world. Customers won’t have it.”

  • High Bar in Hiring
  • “Will you admire this person?”
  • “Will this person raise the average level of effectiveness of the group they’re entering?”
  • “Along what dimension might this person be a superstar?”
  • “I believe high standards are teachable. In fact, people are pretty good at learning high standards simply through exposure. High standards are contagious. Bring a new person onto a high standards team, and they’ll quickly adapt. The opposite is also true. If low standards prevail, those too will quickly spread. And though exposure works well to teach high standards, I believe you can accelerate that rate of learning by articulating a few core principles of high standards, which I hope to share in this letter.”
  • “Another important question is whether high standards are universal or domain specific. In other words, if you have high standards in one area, do you automatically have high standards elsewhere? I believe high standards are domain specific, and that you have to learn high standards separately in every arena of interest. When I started Amazon, I had high standards on inventing, on customer care, and (thankfully) on hiring. But I didn’t have high standards on operational process: how to keep fixed problems fixed, how to eliminate defects at the root, how to inspect processes, and much more. I had to learn and develop high standards on all of that (my colleagues were my tutors).”
  • “What do you need to achieve high standards in a particular domain area? First, you have to be able to recognize what good looks like in that domain. Second, you must have realistic expectations for how hard it should be (how much work it will take) to achieve that result – the scope.”
  • “Unrealistic beliefs on scope – often hidden and undiscussed – kill high standards. To achieve high standards yourself or as part of a team, you need to form and proactively communicate realistic beliefs about how hard something is going to be – something this coach understood well.”