Amazon is arguably the most famous survivor of the internet bubble era. One cannot overstate the role of an effective leadership in the long-term success of the company, and it is reasonable to argue Amazon would not have been what it is today without its charismatic founder and CEO Jeff Bezos. Jeff Bezos’ contributions to Amazon have certainly played an important role in him being titled the best CEO by the widely acclaimed Fortune magazine this year. The Fortune article on Jeff Bezos is worth reading multiple times because it gives us a good understanding of Jeff Bezos’ leadership style.
Jeff Bezos understands the impact of the leaders on the organizational culture, and he strives to lead with examples. This means he is at the forefront when the company may be facing a crisis, and he embodies the characteristics and traits he want everyone else at his companies to emulate. This may be why he was actively involved with the case of the Washington Post correspondent Jason Rezaian who was imprisoned in Iran on espionage charges. When Jason was freed and flown to Germany, Jeff Bezos personally went to greet him there so that he could fly him back home. This was Jeff Bezos’ message that the employees at his companies are part of the family, and if anyone gets in trouble while doing his job, he can count on the full support of his colleagues including the leadership.
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As a leader, Jeff Bezos is intensely focused. He may be the leader and/or owner of the multiple companies but he doesn’t lose focus of the individual missions of these companies whether it is Amazon, the Washington Post, or Blue Origin. His focus explains why all three companies have been thriving because they can count on Jeff Bezos absolute commitment whether in terms of financial resources, time, or strategic freedom. Jeff Bezos might have opted for micromanagement in the early years of Amazon but he is willing to give more room to his subordinates. Even when he is not directly involved with the operational aspects, he does keep track of the overall progress to ensure the management teams running the companies have not lost focus on the original mission.
As a leader Jeff Bezos understands the risks of complacency. The success of his companies has not slowed him down one bit but has only energized him more. Amazon continues to evolve whether it is experimenting with new product lines, distribution channels, or targeting new international markets. Similarly, he has been pushing the Washington Post to embrace the new journalistic model while also retaining some characteristics of the older models. He is not directly involved with the day-to-day running of the Washington Post but he is constantly giving new ideas to the management to increase readership base and explore potential revenue models that could be deployed in the future. His focus on organizational evolution is also evident at Blue Origin. The original goal at Blue Origin was to develop a more efficient way of launching space shuttles but when things didn’t work out as expected, Jeff Bezos changed the mission to space tourism.
Change management is also a major component of Jeff Bezos’ leadership philosophy. Jeff Bezos views organizations as living organisms that have to evolve to stay competitive and preferably lead in their respective industries. Jeff Bezos owns three major companies and none of these now resemble their older selves. Amazon started as an online book retailer but now it sells products in a wide range of categories including computers, digital media, and clothing. The Washington Post has come a long way since being acquired by Jeff Bezos and is now a major player in online journalism landscape. Blue Origin started with a different mission and now aims to become a major player in the space tourism sector. It is clear these three companies will continue to evolve over time and may look even more different ten years down the road.
Even the most capable leaders cannot be good at everything, and Jeff Bezos understands this. While he is actively engaged with the day-to-day running of Amazon, he has adopted a different approach towards the Washington Post and Blue Origin. Jeff Bezos understands Amazon’s operations and culture inside out but that may not be the case with the Washington Post and Blue Origin because Jeff Bezos is mostly a tech visionary and not a journalist or a rocket scientist. As a result, he has delegated the task of running the Washington Post and Blue Origin to people best fit to run them. But Jeff Bezos does bring his technological expertise when needed, and is often dispensing suggestions to the management at the Washington Post and Blue Origin. An effective leader understands his strengths and weaknesses, and Jeff Bezos understands he doesn’t have the qualifications to micromanage the Washington Post and Blue Origin like he has in the case of Amazon.
As a leader Jeff Bezos doesn’t lose sight of the long term. Some leaders are obsessed with short term results and constantly monitor performance metrics including profitability data but Jeff Bezos is willing to accept short term losses in pursuit of huge long term profit potential. Amazon may be profitable now but that was always the case. It is simply bearing the fruits of Jeff Bezos’ commitment to long term success in the past. Jeff Bezos is taking the same approach with the Washington Post and Blue Origin. Both companies are most likely not profitable at the moment yet Jeff Bezos continues to invest both time and money in these two companies because he believes they have significant long term potential. In this regard, Jeff Bezos could also be called a visionary who can foresee the future and makes long term investments to be in an ideal position to exploit the commercial opportunities that may arise. For instance, he hopes Blue Origin will be at the forefront of space tourism.
Jeff Bezos is not afraid to take huge risk as a leader. Jeff Bezos argued, ‘Nobody gets into the space business because they’ve done an exhaustive analysis of all the industries they might invest in and they find that the one with the least risk and the highest returns on capital is the space business,’ . In short, he reminded the interviewer that his investment in Blue Origin didn’t really make sense from economic point of view because it was both high-risk and quite uncertain in terms of eventual economic return. Similarly, his investment in the Washington Post was also a huge gamble because the Washington Post is a print newspaper and had been faced with declining readership at the time Jeff Bezos bought it. But it is not surprising that Jeff Bezos is a high risk-taker because he knows high risks also tend to lead to huge economic profits if the strategy is well-designed and executed well and in a patient manner. Jeff Bezos can wait as long as it takes for his companies to succeed. Jeff Bezos also has an advantage when it comes to taking risks that many other leaders do not have. Jeff Bezos employs his own capital and is not accountable to anyone if the bet doesn’t pay off. In addition, he takes a calculated approach to risk so that even a failure does not prove catastrophic.
One of the major keys to Jeff Bezos’ leadership effectiveness has been to pay close attention to the customer. Placing books all face out on the shelves at the Amazon’s retail store may not seem like a big deal at first but it does speak a lot about how closely Jeff Bezos watches customers’ preferences and needs. The company has also been working on same-day delivery program and is even expected to invest in its shipping transportation fleet. This customer-oriented approach is, particularly, useful today because customers have growing income levels and greater choices than ever.
Many leaders take the safe route in order to minimize uncertainty and risk. They are willing to accept average profits as long as they can avoid unnecessary risk. But Jeff Bezos is not afraid to think outside-the-box. Not only Jeff Bezos has an established track record of creating new business models but he has also shown the willingness to embrace the strong elements of the older business models. This is an approach not many businesses have taken, and it clearly demonstrates Jeff Bezos is an independent and out-of-the-box thinker. Amazon was responsible for driving many brick-and-mortar book stores out of business, and it has significantly hurt the business of even the biggest brick-and-mortar book retail chains such as Barnes & Noble. But the company has done something that no one could have expected, i.e. opening an experimental book retail store of its own in Seattle, WA. Jeff Bezos is clearly a leader who does not allow himself to be limited by conventional thinking and expectations.
An effective leader engages in continuous learning, just as Jeff Bezos does. Even when he is not directly involved in the running of his companies such as Blue Origin, he regularly meets with the management and requests detailed reports. Similarly, he also tries to learn from the people he admires such as Jamie Dimon and Warren Buffet. Last but not least, Jeff Bezos allocates time to reading as well despite his 65-hours weekly work schedule. This commitment to continuous learning also inspired the Palm Springs conference in March whose participants included ‘scientists, professors, entrepreneurs, hobbyists, and imagineers’ .
Jeff Bezos understands the importance of surrounding himself with capable and smart people. He understands the need to delegate more as the companies grow in size because large businesses are difficult to manage even for the best of the leaders. Many of the senior executives at Amazon have been with the company for over a decade now, with many joining not long after the founding of the company. As a result, Jeff Bezos has been willing to delegate more to his trusted aides. Similarly, Bezos hired capable hands such as Fred Ryan after he acquired the Washington Post. He also recruited talent with previous work experiences at NASA such as Rob Meyerson when he founded Blue Origin. Like most effective leaders, Jeff Bezos understands the value of high quality human resources, and he takes measures to attract as well as retain them for the long term.
It is reasonable to call Jeff Bezos a transformational leader. Jeff Bezos’s subordinates follow him because they admire his work ethics, his vision, and his leadership qualities. Jeff Bezos inspires his followers to work hard and constantly improve themselves. For example, Meyerson resisted Jeff Bezos’s request for 6-page narratives for quite some time but eventually realized the wisdom behind the request and embraced it. Jeff Bezos doesn’t only transform people but also companies and entire industries. Amazon started as an online seller of books but now has become one of the largest companies in the world with a $260 billion market cap. The Washington Post was threatened by the new online journalism models but it has been transformed into a leading online news media company under Jeff Bezos’ leadership who urged the editors to embrace the online platform rather than opposing it. Similarly, Blue Origin is in a leading position to lead the space tourism revolution along with Elon Musk’s SpaceX. Jeff Bezos’s mission to transform the society continues as Amazon has been experimenting with same day delivery service which will further blur the differences between online and brick-and-mortar retail stores.
An analysis of Jeff Bezos’ influence reveals he has both the formal and the informal powers. Jeff Bezos has formal powers because he is the owner or a major shareholder of all three companies that are Amazon, Blue Origin, and the Washington Post. He also has power as a senior leader in the three companies including CEO title at Amazon. But Jeff Bezos’ formal powers are less than his informal powers. Jeff Bezos has informal powers because he is one of the leading tech visionaries in the world who has build Amazon into a major player in quite the same way Bill Gates built Microsoft and Steve Jobs built Apple into market leaders. Jeff Bezos’ informal powers also derive from the fact that he enjoys personal credibility among his followers. His subordinates feel Jeff Bezos leads by examples, puts his economic resources where his mouth is, has strong work ethics, and embraces change.
Jeff Bezos does believe the leader’s job is to maximize the long-term wealth of the shareholders but at the same time he also believes organizations have certain responsibilities towards the society. One of the reasons he bought the Washington Post was the power of news media to change the society for better or worse. Jeff Bezos recalled his experiences watching the Watergate Scandal coverage to drive home the point that it is important to elect the right President for the country. Amazon and Blue Origin may be for-profit businesses but Jeff Bezos is also passionate about them because he believes they are shaping the future. Blue Origin’s founding was also inspired by Jeff Bezos’ conviction that mankind will eventually establish colonies in the space. Jeff Bezos is a leader who understands the tremendous potential of the businesses to change the society for the better, and he is determined to make as big impact as possible through his three companies.
Amazon is one of the oldest internet companies whose rise could not have been possible without Jeff Bezos’ leadership. Jeff Bezos has been an effective leader because he leads by example. He reflects the qualities and characteristics that he wants to see in the cultures at his organizations. Jeff Bezos is intensely focused which also explains his success in the long term. Even when he is involved with the day-to-day running of the companies, he keeps his eyes on the bigger picture. He understands the risks underlying complacency and embraces change even if his companies may be the market leaders. While Jeff Bezos is quite a capable leader, he is aware of his personal strengths and weaknesses, and is willing to delegate to his subordinates what they could do better than him. Jeff Bezos adopts a long-term approach to winning the competition and doesn’t let himself get distracted by short-term performance metrics. Jeff Bezos is not afraid to take risks, and he often thinks outside-the-box. He engages in continuous learning and surrounds himself with capable and smart people. It is clear Jeff Bezos has various qualities that make him an effective leader and explain his tremendous success at various companies such as Amazon, Blue Origin, and the Washington Post.
