Amazon is a remarkable company. It's no surprise that it was built by a remarkable mind.
The brilliance, philosophy, and quirks of founder and CEO Jeff Bezos are deeply baked into Amazon, which is what makes his pronouncements about his approach to business so fascinating. Each utterance offers insight not only into Bezos's thinking, but also into how things get done at the wildly successful company.
Bezos's annual letter to shareholders is the latest peek inside his brain (and his company), covering all the ways Bezos is battling mightily to keep Amazon as quick, hungry, and innovative as a startup despite its now behemoth size. The complete letter is worth a read in full, but the section in which Bezos outlines his approach to churning out "high quality, high velocity" decisions may be the most interesting sections for leaders.
1. Know what kind of decision you're trying to make.
Not all decisions are created equal. Some require deep thought. Other, less weighty choices just demand speed and basic competence. "Many decisions are reversible, two-way doors. Those decisions can use a light-weight process. For those, so what if you're wrong?" (There was much more on this distinction in his last shareholder letter.)
2. 70 percent of the information is usually enough.
In a perfect world, you'd wait until you had all the relevant information before making tough calls. But we don't live in a perfect world, and in our current business environment, holding off until you know everything will just make your decision-making process too slow. Bezos offers a handy rule of thumb to deal with this conundrum.
"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. Plus, either way, you need to be good at quickly recognizing and correcting bad decisions. If you're good at course correcting, being wrong may be less costly than you think, whereas being slow is going to be expensive for sure," he writes.
3. "Disagree and commit."
Healthy disagreement is essential for excavating and evaluating a full range of ideas, but infighting can also slow down implementation of whatever is decided. Balance these competing realities by using the phrase "disagree and commit," recommends Bezos.
"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," he explains.
To work, this approach needs to apply all the way to the top -- "If you're the boss, you should do this too. I disagree and commit all the time," Bezos adds -- and needs to be more than empty words. Don't just say you commit. Actually commit.
4. Quickly escalate deep disagreements.
While there are lots of times teams can "disagree and commit," there are also more fundamental disagreements that need to be hashed out before decision making can proceed. It's essential you quickly separate one from the other and take deeper differences up the chain of command.
"Recognize true misalignment issues early and escalate them immediately. Sometimes teams have different objectives and fundamentally different views. They are not aligned. No amount of discussion, no number of meetings will resolve that deep misalignment. Without escalation, the default dispute resolution mechanism for this scenario is exhaustion. Whoever has more stamina carries the decision," says Bezos, who adds: "'You've worn me down' is an awful decision-making process. It's slow and de-energizing. Go for quick escalation instead."