Do you consider yourself a risk-averse or risk taker? In this Expert Insight Interview, Steve Anderson discusses principles of how to grow your business by taking risks. Steve Anderson expertise in business growth and strategic risk, and he also wrote an international bestseller The Bezos Letters: 14 Principles How To Grow Your Business Like Amazon.
The interview discusses:
- Customer Focus
- Experimental Flexibility
- Promoting Ownership
Embrace the Risk
The most fundamental principle is to encourage success or failure. Failure should be seen as a positive thing because failure is a path to success. Companies should be risk-takers because experimenting leads to invention and invention leads to innovation. Amazon suffered great failure when it introduced Fire Phone in 2014. That failure cost Amazon $178 million in Development and Inventory expenses. However, only four months later Amazon introduced a prototype of Echo and Alexa. Amazon team translated knowledge from previous Fire Phone failure and invented the Echo and Alexa which turned out to be one of Amazon’s greatest successes. Alexa was installed on 100 million devices in 2019 while Echo has a leading 28.3% market share among smart speakers.
Most of the companies have an R&D department in which they innovate and experiment. But what if the whole company is used to experiment? Amazon’s goal was to become the most customer-oriented company in the world and every employee was encouraged to experiment in order to reach that goal. It became the company’s culture to literally obsess over the customer which brought the customer service industry to a higher level.
Another principle is to make things simple for the end-users. No matter the complexity in the technology used to create a product or service, the things need to be oversimplified for the customers. That is another thing that Amazon excels in it. One example is Kindle e-Reader. Amazon basically revolutionized book reading by making books available online. Now customers can easily read books online, take notes, link to websites, and read from any device. All that required incredible technological complexity, but it appears so simple to the end-users.
Common mistake companies make is that they “marry” their projects, thus it is hard to let the project go if turned out to be unsuccessful. Amazon is so flexible with projects. They feel comfortable to quit the experiment if unsuccessful at that moment and bring it back later for some other idea.
If the company wants the employees to think and act like owners, then it must treat them like owners as well. Besides the salary, Amazon pays its employees in stock options as well. That way employees are more dedicated to the company’s well-being. Think simply, a tenant would nail a Christmas tree to the wood floor, but an owner would never act that careless
John is the Amazon bestselling author of Winning the Battle for Sales: Lessons on Closing Every Deal from the World’s Greatest Military Victories and Social Upheaval: How to Win at Social Selling. A globally acknowledged Sales & Marketing thought leader, speaker, and strategist. He is CSMO at Pipeliner CRM. In his spare time, John is an avid Martial Artist.