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Leadership Lessons from Jeff Bezos

By: Joshua John



Amazon is the largest online retailer in the world. But in 1995, when the company launched, it was an online book retailer. At the time, no one would have guessed that the small company selling books on the Internet would evolve into a the world’s largest online retailer, selling everything from paperbacks to refrigerators. After surviving the dot-com bubble burst, Amazon continued to grow through new partnerships and new ventures. It’s also considered one of the best companies in the country to work.The key to Amazon’s success? Founder Jeff Bezos. His unique managing style has spurred company evolution and innovation since its birth. Here are just five key insights any business leader can take away from Amazon’s rise from retail website to Internet juggernaut.

Be Unmovable, But Willing to Give

This first strategy might seem a bit contradictory. How can you be stubborn and flexible at the same time? The answer is simple—stay focused on your business plans and goals, but be willing to make changes if necessary. A business leader that lacks the ability to be stubborn will abandon plans instead of seeing them through, and a leader lacking flexibility will overlook finding solutions to problems. Amazon became a leader by paying attention to trends in their industry and adjusting its business plans accordingly. An industry inevitably will grow and change in ways that are hard to anticipate. To find success, stay true to the company’s goals but be willing to adapt plans as the industry evolves.

Read more on adjusting business plans

Follow the “Two Pizza Rule”

Bezos believes that if a team can’t be fed with two pizzas then the team is too large. Some companies believe that delegating work to larger teams saves time and money, but Bezos found that the opposite is true. Working with large groups of creative individuals can cause more problems than solutions. Bickering between the teams and a lack of communication (caused by size) can cause projects to stall or fail. The “two pizza rule,” Bezos has found, reduces the risk of stalling projects or repeatedly executing them, which can be costly. A leader needs to identify the key players who can make a project succeed and then offer them the resources to push the project forward. Empowering a small group of talented individuals to work together increases the chances of identifying ideas that help the business innovate.

Experiment Constantly

For any company, experimentation breeds innovation, and it sets a stale business apart from an obvious leader in the industry. Bezos encourages Amazon employees to experiment constantly, and tests promising ideas with the knowledge that they might fail. Experimentation at Amazon produced some of the features consumers now love, such as the Gold Box, Prime, free shipping on orders more than $25 and one-day shipping for $3.99. While none of these ideas were a guaranteed success, Bezos was willing to fail in order to find out what worked—and he grew the company at the same time. Encourage employees’ new ideas and try out new things knowing that set-backs might occur along the way to success.

Hyper-Focus on Your Customers

Very few businesses actually adhere to the adage “the customer is always right.” At Amazon, Bezos takes it to heart, believing that the customer is the essential key to growing the business. Amazon puts a lot of stock in its customer feedback, marking the success of website features, products, and even packaging. In fact, Bezos believes that when growing a business should start with the customer and work its way backward—the customer’s needs and concerns should be addressed as a starting point to expand or grow a business. Don’t just react to feedback; change to embrace it. For example, if customers’ feedback indicates that they are using mobile devices to access the website, consider making it mobile-friendly. Or create an app to help customers access the business from their phones and tablets. Customer behavior offers clues to which direction the business should take in order to continue to grow.

Get Rid of Those Pesky Risks

Reduce risks, increase revenue. That’s the goal of most businesses. Bezos, however, takes it one step farther. He believes that a company should identify risks and not just reduce them, but eliminate them completely. This is advice for smaller, younger businesses, and it comes from Bezos’ model for birthing Amazon. When the company was young, it distributed books. Bezos established a model wherein the company was running with no risk—it was a book distribution company and it did this very, very well. In fact, Amazon launched in 1995, but it did not expand its business from books until 2000, when it launched Amazon Marketplace. That’s five years of business with almost no change to the model. Bezos has grown the company and built the trust of stakeholders, investors and, most importantly, customers. Grow a business based on its core strengths, and then stick with them to build the trust of industry and customers. Once you are running at a low risk, only then consider small expansions that might change the business. Not sure how to grow a risk-free business? See steps one through four above.

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This article was originally published by MBA@UNC

Published: August 19, 2013

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Joshua John

Joshua John is the digital strategist for MBA@UNC, the online executive MBA program from the University of North Carolina-Chapel Hill. Joshua is an avid blogger and his passion lies at the intersection of business and digital media.

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