The Amazon Effect: There's Strength in People, Not Just Numbers
Each year, Jeff Bezos, the mastermind and business innovator behind Amazon shares a letter with his shareholders. These letters, dating back to 1997, serve as a goldmine of independent and innovative thinking for today’s business leaders. Our series, The Amazon Effect, focuses around these letters – and today we’re discussing the significance of people, not numbers. Let us explain.
In his letter from 2009, Bezos mentioned how people new to Amazon are surprised at how little time they spend looking at traditional business forecasts and metrics. We’ve discussed at length prior how Bezos keeps his business firmly focused on the needs of the consumer, and not the needs of the shareholders.
In doing so, looking at traditional metrics of business success for a public entity - stock prices, quarterly and annual financial reports - become far less important compared to customer based metrics.
For Amazon, they spend way more time monitoring customer facing needs, like the number of reviews available for each product or the amount of products available for next day delivery.
For them, keeping those numbers high and finding ways to improve them if they can be better is worth more time and discussion than their financial outlook for the quarter.
Keeping that perspective - focusing on the tangible input of their company - leads them directly to sustainable financial gain: output.
For larger businesses, the focus can completely shift from the purpose of their business (to provide a certain product or service at a high level and at a profit) to the output of the company (the financial outlook, the stock prices, etc.). For Bezos, that’s shortsighted and ultimately backwards thinking.
If you do nothing but ensure you’ll hit numbers, you’ll could end up making decisions detrimental to your customer base. Make enough of those decisions, and you’ll find yourself without a customer base.
As for a small business, keeping focused on inputs and outputs are a lot simpler, but still easy enough to ignore. You can reach a point as a business owner where you end up viewing customers as an aggravation; a distraction from the work you need to do.
Don’t fall into the trap. Remember that customers are the lifeblood of your company; their happiness and satisfaction with what you’re offering is the be-all-end-all of your business. Keep them happy.
Stay focused on achieving input goals -- creating a better customer experience, striving for streamlined and faster service, more products, etc. Do that, and the financial benchmarks will follow.
In our series, “The Amazon Effect” we’ll delve further into Bezos’ yearly letters to shareholders and how they can help you and your small business. Keep checking back for more.