Are retail CEOs ready to ‘disagree and commit’ like Jeff Bezos?
Amazon.com CEO Jeff Bezos published his latest letter to shareholders yesterday on what it takes to keep the business operating as a vital “Day 1” company rather than a “Day 2” business suspended in stasis, which falls into “irrelevance,” followed by “excruciating painful decline” and “death.”
In his letter, Mr. Bezos discussed, among other things, Amazon’s customer-centric approach and the need for speed in making business decisions.
On the latter point, Amazon’s CEO said that a major difference between Day 1 and 2 companies is not the quality of the business decisions they make, but the speed with which they make them.
“Most decisions should probably be made with somewhere around 70 percent of the information you wish you had. If you wait for 90 percent, in most cases, you’re probably being slow,” he wrote.
Another key to speedy decision making, according to Mr. Bezos, is a practice Amazon calls “disagree and commit.”
Mr. Bezos wrote, “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.”
In his letter, he offered an example in which he practiced his “disagree and commit” preaching. In one instance, the Amazon Studios team wanted to greenlight a project. While he didn’t agree on its merits, he responded quickly that he would commit to it with the “hope it becomes the most watched thing we’ve ever made.” It would have taken considerably longer to move on the project if others had to convince him.
“Note what this example is not,” he wrote. “It’s not me thinking to myself ‘well, these guys are wrong and missing the point, but this isn’t worth me chasing,’ It’s a genuine disagreement of opinion, a candid expression of my view, a chance for the team to weigh my view, and a quick, sincere commitment to go their way.”
- Bezos shareholder letter: Don’t let the world push you into becoming a ‘Day 2’ company – CNBC
- Amazon’s Jeff Bezos constantly reminds his workers about the biggest enemy: ‘Irrelevance. Followed by excruciating, painful decline.’ – Business Insider
- Bezos Says Artificial Intelligence to Fuel Amazon’s Success – Bloomberg
DISCUSSION QUESTIONS: Do you agree with Jeff Bezos that, to focus on speed, companies should make decisions with less information than they would like to? Is Amazon’s “disagree and commit” management practice common in retailing circles? If not, should it be?