Over the last year the financial services sector has been bombarded by coverage of the upcoming (and depending on your viewpoint present) GAFA (Google, Amazon, Facebook, Apple) disruption. There are no shortage of articles covering the fintech or tech threat to banking, the impact of new technology on the creative economy and specifically how Amazon is shaking up financial services. Depending on where you sit this shake up is either seen as exciting or as a clear and present danger to existing business models.
It is with this backdrop in mind that led me to take a read of the Amazon annual shareholder letter. The Amazon letter is a simple, yet fascinating, insight into how a tech giant and a “disruptive” fintech is thinking and the principles that drive such an organisation. Here are my key takeaways:
1. “Yesterday’s ‘Wow’ quickly becomes today’s ordinary” – Jeff Bezos
Jeff states that “customers are divinely discontent”. In short “customers expectations are never static” and as a result the the process of improvement is and needs to happen at a faster rate than previously.
Jeff Bezos goes on to warn “You cannot rest on your laurels in this world. Customers won’t have it” and states the need for high standards
2. “High standards are teachable and contagious” – Jeff Bezos
Jeff gives plenty of examples, his overriding message is that a newbie within a high performing or high standards team will adapt and strive for high standards. Equally a newbie in a low performing or low standards team will also adapt.
My takeaway from this is to ensure that you nurture a high standards culture and your teams will respond accordingly. Equally if you foster a culture of negativity, that will be reflected in the way in which you do business.
3. ” High Standards are domain specific and you have to learn high standards separately in every arena of interest” – Jeff Bezos
This is all about being humble. Recognising areas where your standards are low or more importantly not world class – being open to the likelihood – and learning/developing the necessary high standards in those lagging areas.
4. “Unrealistic beliefs on scope – often hidden and undiscussed – kill high standards” – Jeff Bezos
The lesson here is all about people or leaders within a team :
- Recognising high standards in a particular domain
- Having realistic expectations around what it will take to achieve the desired result
The example that Jeff gives is someone trying to do a perfect head-stand. If you think you will be able to do a perfect head-stand in 2 week you will probably give up. The best chance of doing a perfect head-stand will probably require daily practice for about 6 months.
Leaders need to understand and “proactively communicate realistic beliefs about how hard something is going to be”!
5. “People are drawn to high standards – they help with recruiting and retention” – Jeff Bezos
Interestingly Jeff talks about the culture of high standards – the good work that happens behind the scenes, that often goes unnoticed. I think Jeff is talking about how as individuals it is your personal attention to detail and your desire to achieve the best you can in the workplace that reaps its own rewards.
Lastly, many annual shareholder letter contain quite a bit of gibberish. This Amazon shareholder letter was easy to read and made a lot of sense to me. Below i created a word-cloud which highlights the most frequently used words within the annual shareholder letter and is in itself quite revealing. Enjoy….