The Everything Store by Brad Stone

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Book Summary

A fascinating read describing the rise of Amazon and Jeff Bezos. There is no doubt that Amazon is the professional expression of Bezos, a truly driven human being with big dreams and even bigger capacity to execute on them. The book follows almost chronologically the development of Amazon from it’s early days up to 2013 with flashbacks to different events that influenced the character building of Bezos.

Key learnings / takeaways / funny lines:

  • Have insanely high standards that pushes you and everyone else to do better. There is no specific part of the book I can highlight as an example. It is the overall feeling that one gets reading the entire book. The reader is almost expect to raise their reading standards when holding the book, brilliant writing.
  • Have clear rules and principles when building a company and its culture. From Day 1 Bezos made it clear that every decision made in Amazon should ultimately benefit the customer. Although many companies say that, very few can execute on this. Bezos is obsessed about and uses it as the ultimate compass for all decision making.
    • p.20: Bezos Theory of communication. “Bezos takes a red pen to press releases, product descriptions, speeches, and shareholder letters, crossing out anything that doesn’t speak simply and positively to customers.”
  • Embrace the truth. Bezos has the ability to see and act on the truth. On numerous occasions, this was crucial in saving Amazon from going bankrupt.
    • p.328: “He embraces the truth. A lot of people talk about the truth, but they do not engage their decision making around the best truth at the time.”
  • Use Regret-Minimization framework for big decision in life. Simple question to keep askingWhat will I regret not doing when I am 80?
    • p.41: ”When you are in the thick of things, you can get confused by small stuff. I knew when I was 80 that I would never, for example, think about why I walked away from my 1994 Wall Street bonus right in the middle of the year at the worst possible time. That kind of thing just isn’t something you worry about when you’re eighty years old. At the same time, I knew that I might sincerely regret not having participated in this thing called the internet that I thought was going to be a revolutionizing event. When I thought about it that way … it was incredibly easy to make the decision.”
  • Long-term business growth projections will be wrong, use them as your north star. If Bezos was wrong by factor of x22 (yes, that’s a lot) on the growth of his own company (p. 58: he projected sales of USD 74 m by 2000 while the actual figure was USD 1,640 m), then I think we should not be spending much time either trying to predict future growth. Focusing on executing next immediate action is the best way to maximize long-term valuations. 
  • A hierarchy is not responsive enough to change. Keep organizations flat. No matter how smart people on top are, too many layers slow down decision-making and disconnect management from the customers as the real problems get filtered and covered.
  • The question mark – ? – email: If you expect somebody to reply to your email, sending a simple “?” as a reply to email creates sense of urgency on the other side. One of the reasons this can be a useful technique is that it does not fit into the normal / accepted email templates. Another benefit is that it also saves time – if you are following up on something that the other party already knows, why would go over again describing the the same thing.
    • p.397: “That’s when the notorious question mark arrives directly from Bezos. When Amazon employees receive one of these missives, they drop everything they are doing and fling themselves at whatever issue the CEO is highlighting… The question mark e-mails, often called escalations, are Bezos’s way to ensure that potential problems are addressed and that the customer’s voice is always heard inside Amazon.”
  • Keep teams small and autonomous – two-pizza rule. Small teams get things done, no opportunity for creating hierarchical structures. Accountability is much easier to manage and contribution of each members is clear.
    • p.212: “The entire company, he said, would restructure itself around what he called ‘two pizza teams’. Employees would be organized into autonomous groups of fewer than ten people – small enough that, when working late, the team members could be fed with two pizza pies. These teams would be independently set loose on Amazon’s biggest problems. They would likely compete with one another for resources and sometimes duplicate their efforts, replicating the Darwinian realities of surviving in nature.”
  • Step by Step ferociously.
    • p.201: “The phase accurately captures Amazon’s guiding philosophy as well. Steady progress toward seemingly impossible goals will win the day. Setbacks are temporary. Naysayers ate the best ignored.”
  • Power point slides are easy tool for people to hide the completeness of their ideas. Writing clearly is not easy – it forces people to really think deep and develop strong arguments. However, PowerPoint has its advantages such as being able to present data / facts visually, which can make comprehension much easier.
    • p.220: “PowerPoint is a very imprecise communication mechanism. It is fantastically easy to hide between bullet points. You are never forced to express your thought completely.” … “He wanted people to think deeply and taking the time to express their thoughts cogently. I don’t want this place to become a country club. What we do is hard. This is not a place where people go to retire.”
  • I think he ate the phone. Simply hilarious.
    • 209: “Wilke went off like a bomb. He was calling that day from his home office on Mercer Island, and he started screaming – an oral assault of such intensity and vulgarity that the handsets of the generals managers on the call shrieked with feedback. And then, just as abruptly as the outburst began there was quiet. Wilke had seemingly disappeared. No one said anything for thirty seconds. Finally Arthur Valdez, the general manager of Campbellsville, said quietly: I think he ate the phone.”

A great book, definitely worth reading. Where if not on Amazon to buy it!

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What David Cameron should have known about decision making to avoid the Brexit fiasco?

 

Cameron

“No freaking way! How did this happen?” One of the many pretty obvious questions I (and many other people) asked once it was clear that British people voted to leave the EU. A lot will be written on the topic. I mean really a lot! However, no matter how much we analyze the event, we can’t turn it back. What we can do is extract learnings. You and I can learn from what happened so that we are better prepared for future important decisions.

Let me put my main learning on decision making after the Brexit right away: do not make a decision that has potentially minimum upside and significant downside. Or, I call this the Upside vs Downside Framework.

The referendum represented already an outcome of a poorly made decision. I believe referendums are by design flawed and should not be used for decision making. The reason is that you ask people whose occupation and knowledge has nothing to do with the question they need to answer. So they make a decision based on limited knowledge and usually based on emotions. Not good.

Back to the main point. The referendum happened only because Cameron made a decision to call it. There was no law requiring him to do so, no protests on the streets by millions of Brits, nothing. So, at one point of time, Cameron should have had the following analysis in his head (or white board, or wherever):

  • Option 1: call a referendum and people vote Remain

It will improve my chances to strengthen my position in the party. It will help in the next elections. There will be no real impact on the economy, so basically we will continue as is now.

  • Option 2: call a referendum and people vote Leave

I will have to resign. There will be significant economic and political challenges and turmoil not only for us in the UK but globally. It will trigger a process of separation and weaker UK and Europe overall.

Looking at these potential outcomes, what decision would you make? Probably not one in favour of a referendum. So easy for me to say after the event, right? I admit, it is easier to write now but still, some facts have been clear before he made the call. So what went wrong with his thinking? I can only assume that instead of stating clearly the possible main (let me repeat – main!) outcomes (as I have tried to articulate above), he went looking for an answer to the next level of more operational arguments. That is a very dangerous trap because you get stuck on things that don’t matter (putting them in endless lists of bullet points) and forget the things that matter. The big picture! That is where I can assume things went wrong. But at the end of the day, all of us make and will make mistakes. And exactly because we know that mistakes cannot be avoided, we must learn a lesson and learn to minimize the downside of a decision.

The lesson is for you and me to learn and apply.  What are some of the decisions you need to make in your life now? Let me know if you want to learn more on the Upside vs Downside Framework.

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