Decision-Making and Jeff Bezos


I subscribe to Amazon’s Kindle Unlimited and Audible, where I can either read or listen to articles, books and podcasts that I would otherwise not have seen. While searching both these databases is cumbersome, occasionally I will see a gem emerge. Today, one of the Kindle gems was Invent and Wander: The Collected Writings of Jeff Bezos. It’s a collection of Bezos’ annual letters to shareholders, and it’s fascinating to see how the company grew its revenue from $15 million in 1996 to $100 billion in 2015, making it the fastest company ever to reach this number in annual sales. One of the ways Amazon’s culture helped achieve that phenomenal growth was decision-making. Decision-making is where I see teams either hit it out of the ballpark, or irretrievably falter. I’ll reproduce this from Bezos’ 2015 letter:

There are some subtle traps that even high-performing large organizations can fall into as a matter of course, and we’ll have to learn as an institution how to guard against them. One common pitfall for large organizations—one that hurts speed and inventiveness—is “one-size-fits-all” decision making. Some decisions are consequential and irreversible or nearly irreversible—one-way doors—and these decisions must be made methodically, carefully, slowly, with great deliberation and consultation. If you walk through and don’t like what you see on the other side, you can’t get back to where you were before. We can call these Type 1 decisions. But most decisions aren’t like that—they are changeable, reversible—they’re two-way doors. If you’ve made a suboptimal Type 2 decision, you don’t have to live with the consequences for that long. You can reopen the door and go back through. Type 2 decisions can and should be made quickly by high judgment individuals or small groups. As organizations get larger, there seems to be a tendency to use the heavy-weight Type 1 decision-making process on most decisions, including many Type 2 decisions. The end result of this is slowness, unthoughtful risk aversion, failure to experiment sufficiently, and consequently diminished invention. We’ll have to figure out how to fight that tendency.

Jeff Bezos: Invent and Wander: The Collected Writings of Jeff Bezos.

I see the folly of heavy-weight Type 1 decision making when Product Management and Engineering teams engage in the often annual ritual of goal-setting (at Meta, we do this every six months). There is a tendency to draw up a plan that is intended to drive all engineering output for an upcoming period. Product Management leaders often like to draw up a detailed plan showing all the work that an engineering team needs to get done in the next 6 to 12 months. However, as Eisenhower once reportedly said, “Plans are useless, but planning is everything”.

My credo for successful product managers in Tech companies is–unleash engineering creativity, and then get out of the way. This is especially important to consider in the first month right after planning, like this January. Instead of having heavy-weight Type 1 decisions, consider helping engineers form small teams to investigate customer problems, and consider these as Type 2 decisions. These decisions can be reversed if the experiment or analysis indicates that it’s not a worthy endeavor. However, letting the engineering creativity flow madly in all directions results in the promising germination of an idea that leads on to success. This is how Amazon grew from selling books on the Internet to a business with 3 growth engines: Marketplace, Prime, and AWS — the core businesses that drive its success today.

It is especially important, now that the first half roadmap plans are completed, that we move faster with examining customer problems and customer requests. This is the time, or as the world’s favorite bard once wrote, slightly paraphrased to bring it into the 21st century:

There is a tide in the affairs of (wo)men
When, taken at the flood, leads on to fortune
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat…

William Shakespeare: Julius Caeser

Photo by  to Alexander Schimmeck on Unsplash.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.