Amazon is in the rare position of being able to take risks quickly without disrupting its overall business model. In fact, you can argue that trying new things (only some of which will stick to the wall) is central to Amazon’s brand image. But there are other recent examples of “shoot first, ask questions later” — most famously, JCP’s moves in 2012 that backfired badly because of inadequate market testing.

That being said, I do agree with Mr. Bezos that there is plenty of room for risk-taking and decision by instinct (not just data) in retailing, if senior management creates a fast-moving culture where it can happen.

I seriously doubt that many companies practice “disagree and commit.” The company culture has to be one in which, if “disagree and commit” is allowed, and even encouraged, top management doesn’t come back after a failure and fire those associated with the original idea. Nobody is going to want to take chances under those conditions.

Yes, I agree with Bezos on this. As the CEO of a smaller business, I’m faced with decisions that need to be made but where information is missing, will take too long to acquire or simply doesn’t exist. The majority of the very important decisions I make reside in a grey zone. In my experience, making a considered but faster decision without all the information has generally delivered better outcomes than when deliberations and information gathering dragged on. I do subscribe to the idea of “disagree and commit” and I do rely on the input from my senior leadership team, however this is far easier to do as a smaller company than it would be in the multinational corporations at which I have worked in the past — so size makes a significant difference in if or how Bezos’ doctrine can be applied.

Interesting question. In the case of a pure merchant who thinks he has his finger on the pulse of customer taste, I agree.

But there are other bad examples for operators, and the one that mostly comes to mind is Ron Johnson at J.C. Penney. By most accounts, he ignored data and went with his gut. That led the company down an awful path.

I’m used to “my way or the highway” guys, which is the other way of saying “disagree and commit.” Sometimes they’re successful. Sometimes they’re not.

Bezos did something brilliant. But he gets a ridiculous pass from his investors and he owns a disproportionate share of his company, so someone like Carl Icahn isn’t going to come along and say “The company should be broken up into its component parts for the good of the shareholders.”

But do I think anyone else in the real world should follow the Bezos doctrine? Beyond the notion of getting faster (but WITH, not without information), my answer is an emphatic no.

I think Bezos nailed it. What he’s saying is what most retailers are NOT doing. That release is about staying fresh, trying things even if you think it won’t work and moving fast. I absolutely love the day-one thinking as it applies to retail because it’s true now more than ever. When you come to work, be prepared to think that what you thought was great yesterday is not longer even a good idea, whether it’s merchandise, marketing, stores, web, customer base, whatever — you have to be prepared for the new.

Thinking like that is clearly what has them so far ahead of other retailers and poised to be a trillion dollar company. They put over five million branded AI kits in people’s houses before a single retailer turned their head. I rest my case, your honor.

Most execs aren’t going to commit like this because many are scared to go with their gut because of the REPERCUSSIONS, instead of the REWARDS. Bezos (and Jobs) is famous for knowing that moving quickly with limited information trumps analysis paralysis.

Moving forward without all the data (usually used simply to CYA) puts your job at risk, but performance makes sure your job is never at risk.

Yes, executives all need to sometimes take chances and disagree with their subordinates, but agree to disagree to move to the next level. Waiting for total agreement is waiting to perish and no business can survive this. Disruptive thinking starts with disagreement, and this has proven to be the best way to move forward in today’s environment.

The Amazon leadership model is difficult to replicate in established companies with distance from their original founder mentality. Being a manager and leader in any organization requires that you make decisions with insufficient information. By the time you have collected or generated the ideal set of data, you would have lost any inherent business advantage at best, or at worst end up playing perpetual catch-up as you descend into “irrelevance … painful decline… and death.” Legacy organizational structures and systems can become anchored to past successes unless you have the constant pounding and reminding from the likes of Intel’s late leader Mr. Grove urging that “only the paranoid survive,” or Mr. Bezos on being a “Day 1” company. Retailers are not immune to this phenomenon. As a former co-founder of a startup company, we projected our own vision of available data to create a future vision and act with speed that challenged legacy players’ existing investments and organizational structures. As long as you encourage challenging the status quo and building a culture of open experimentation… Read more »

One of the hallmarks of great leaders is their ability to make bold decisions in the absence of complete information. We have all experienced situations in which we have suffered from analysis paralysis. What also separates Bezos and Amazon from the rest of the pack is the company’s refusal to become complacent about its success.

Unfortunately psychology creeps into business decision making in a way that is very dangerous for brick-and-mortar retailers.

When you’re “winning” like Amazon it is easy to try new things (regardless of your approach). If a project fails it’s OK because you can fall back on your growing core business. When you’re “losing” like some brick-and-mortar retailers, each business decision becomes harder because each decision is viewed as critical to survival.

What retailers need to understand is that regardless of approach, speed, the amount of information available, etc., when things are NOT going well is when you need to encourage innovation most.

Tech companies and startups are coming at retailers and forcing retailers to adapt to new and different cultures. Those retailers who can adapt may survive. Those who don’t will not. Bezos’ thinking is just the latest example of how traditional retail needs to change. Change comes from the top down. This is the time for retail leaders to show courage and the ability to take measured risks.

Most retailers are shackled by “paralysis by analysis.” I’ve participated in the design and measurement of in-store experiences that clearly proved their value — to all stakeholders including shoppers, brand vendors and category merchants only to see the projects “killed” because the retailer felt it was “too difficult to operationalize.” This translates to — “It would cause disruption to our status-quo processes and actually require work and commitment to implement — so it’s easier to kill the project.”

The seismic changes that are disrupting the retail landscape are happening quickly and retailers need to adapt, design, measure, optimize and iterate rapidly. Concepts need to implemented and tested within 3-4 months — no longer. Get to the “NO” as quickly as you can and then move on.

This is not just a retail issue. The over analyzation of where to take a company next is endemic to all large companies, retailers included. Bezos has grown Amazon dramatically by continually investing in new ideas that are mostly not completely baked. He has discarded many ideas as not being feasible or provide enough value after trying them, but at least he tested them. Investors used to question his not focusing on the Amazon profit, but in the meantime, he has built the juggernaut of online retailing and taking business away from store only or slower moving retailers. My experience in the retail technology market is there is a hesitancy to try new ideas. The process of involving many functions and the number of people it takes to get consensus makes trying new ideas very difficult. I have never heard the term R&D with retailers; they always want to know full implementation cost which is a difficult discussion when a trial or pilot would be useful in having the right context for the business decision.… Read more »

Jeff Bezos is spot on with his “disagree and commit” management practice. Consumers and retail practices are changing fast and retailers can’t wait to make perfect decisions. Retailers that continue to debate, discuss and ponder decisions will be the ones we read about in the news (i.e. bankruptcy announcements). We can’t let the perfect be the enemy of the good.

I like General George S. Patton, Jr’s quote for a guiding principle “A good plan, violently executed now, is better than a perfect plan next week.”

Bureaucratic organizations develop a tendency to delay decision making for many reasons. Waiting for “more complete” information is one. More insidious is attempting to make everyone happy. So, Bezos’ spirit is accurate in the sense that companies need to do everything they can to encourage innovation and improvisation that leads to more effective answers.

But the theory of “decide quickly” is a proven myth. My advice is that a decision made before its time is as erroneous as a decision made too late. The book “Silence” about introverts discusses excellent research showing (a) biz school drives a culture of “faster decision” over “better decision and (b) sometimes that’s important but (c) many times it’s incredibly wrong. This is especially true for decisions that involve subtleties.

So there’s good spirit in Bezos’ comment for us to keep in mind. But he suggests it as policy. Following it as a rule will lead to as much (or more) error as it leads to good things. Perhaps this explains those major & long-lasting mistakes Amazon makes.

This represents a truly agile approach to running a retail business. Amazon, however, has some key benefits other retailers may not have. First is a culture that not only encourages but is built on this type of behavior and attitude to making quick decisions. Most long-running retailers are saddled with the opposite culture that betrays agility. Second, they have such scale that they can afford to make multi-million dollar mistakes and not even blink despite not having a profitable retail business. They have so carefully built their brand around these ideas that wall street will not punish them for a failure because they know for every failure there may be a brilliant success. This scale allows them to take many more risks than most retailers are willing to tolerate. The combination of scale and agility allow Amazon to deliver innovation.