Narrative clarity is the one thing that is easy to admire and extremely difficult to imitate. It sets an organization and brand apart from the rest. It's the product of hard and crucial work that is often invisible to define high standards. But just setting the bar high is a recipe for confusion.
How high is a distraction from the focus, which should be on what holds up the bar — the core principles that sustain it. They are the immutable truths behind a business strategy that make it work even as the business model may evolve over time.
Amazon's annual letter to shareowners# is a good example of both — strength in the core and evolution in the products and service suite. Jeff Bezos makes a strong case of why this communication should come directly from CEOs and business leaders. We don't know what we think if we're not in the habit of sharing our thoughts through narrative.
While there are differences between writing for listening and writing for reading, both rely on clarity of thought. Bezos' 2017 letter# follows a logic structure — set up, practical applications as examples, general outcomes, results within the context of direction, and path forward.
1. Start with why, to know what's important
Why read the letter? Bezos' use of the word shareowner rather than shareholder in the most recent letter goes hand in hand with the organization's focus on customers rather than consumers — it's an active participation in creating the results that built Amazon:
- #1 on The American Customer Satisfaction Index for the 8th year
- #1 on The U.K. Customer Satisfaction Index, put out by the Institute of Customer Service for the 5th time
- #1 business on LinkedIn’s 2018 Top Companies to work for list by professionals
- #1 on Harris Poll annual Reputation Quotient on issues like workplace environment, social responsibility, and products and services, for the 3rd consecutive year
Good for the more than half million Amazon employees and thanks to customers whose expectations keep them on their toes. It's a good business that keeps people coming back to work and returning as customers. This is important, because every day is Day 1.
From the 1997 letter:
“We realized that the Web was, and still is, the World Wide Wait…
But this is Day 1 for the Internet and, if we execute well, for amazon.com.”
Bezos elaborated on this mantra in his 2017 letter, providing real business examples of big picture thinking. As I said in my review:
Business has become more about sustaining momentum through appropriate structures and processes that build on each other than a collection of temporary wins. Long term viability is the objective. We want vision, mission, and values to align, and we want to take responsibility for their effects downstream.
This combination of things rests on the pillars of the business strategy — the company's core principles underpin how Amazon does what it does to create the experiences that keep people coming back for more.
2. Recognize priorities, based on realistic expectations
While it's hardly ever one thing that creates advantage, a strong philosophy provides the filter and guardrails within which a business delivers. Unless we know where we're going and what matters we won't have the key to understand failure nor success. We want to do less of the first, and know how to repeat the second.
Amazon as high standards, which rest on a set of core principles. A successful business needs to form and communicate what those standards are, where they come from, and how we activate them. Bezos' hypothesis is that high standards are critical and teachable.
His experience over the years taught him that it's important to have high standards, they're domain-specific, people can learn them through exposure, and it's possible to articulate them through core principles. What it is, where they come from, and therefore how we need to act.
This is something so many organizations fail to see:
First, you have to be able to recognize what good looks like in that domain. Second, you must have realistic expectations for how hard it should be (how much work it will take) to achieve that result – the scope.
How long does it take to do something well? We measure this as the gap between the short term estimation of what something should take to master based on desire and surface understanding and the reality of what it actually takes. This is forms our expectation.
Unless the expectation is realistic we set ourselves up for failure. The scope is the hardest part to get right for any project. But it's important because that's where we capture the value of an activity. Beliefs on scope are the first stumbling block. Form a simplistic or erroneous set of beliefs and you kill high standards.
3. Change beliefs, by changing behavior
If you want to change culture, look at which behaviors help and which ones detract. For some things it's easy to see good vs. poor — Bezos uses the handstand example. For others, like the six-page memo that is standard practice for people to communicate ideas and progress in the organization, it's more nuanced.
But it's critical to learn to isolate the problem:
Often, when a memo isn’t great, it’s not the writer’s inability to recognize the high standard, but instead a wrong expectation on scope: they mistakenly believe a high-standards, six-page memo can be written in one or two days or even a few hours, when really it might take a week or more!
Something that flows easily takes longer to write. Great articles, letters, memos, speeches, and books take much longer to write. A lot of the crucial work that goes into them is also invisible, it's the product of experience, hard work, and much testing through trial and error.
The correct method to teach how to have high standards for a six-page memo is to learn what is a realistic scope. As a leader, Bezos knows what's important to transmit:
“The key point here is that you can improve results through the simple act of teaching scope – that a great memo probably should take a week or more.”
Including the context — writing as working is a team sport at Amazon. Which takes care of the question on skill. This is the kind of environment and culture he wants to create. Behavior influences beliefs and not the other way around.
Media visionary Marshall McLuhan said, “It's experience rather than understanding that influences our behavior.” What's important needs to be teachable, domain specific, people need to be able to recognize it, and realistic scope is part of the coaching practice.
Realistic scope is something good consultants learn with experience — as do carpenters when they say measure twice to can cut only once, engineers who build a strong infrastructure for a project, and so on. This often means starting with a discovery process or an assessment.
4. Magnify the truth, to communicate value
For Amazon that is that it took years to build to where the business is today. We can go back to the letters from the earlier decades# to see Bezos plant the seeds. In this sense, the milestones are a culmination of cumulative actions and choices.
Of the most notable are Prime, which reached 100 million subscribers — this is the first time we learn about the number, the market thinks so#, at the tune of $51 billion in revenue — and Amazon Web Services (AWS), which had 49% year-to-year growth.
More people than ever find the two-day free shipping that comes with the annual subscription convenient. AWS makes it possible for more businesses to operate through “more than 1,400 significant services and features.”
Marketplace is another important service more people use to sell products, “for the first time in our history, more than half of the units sold on Amazon worldwide were from our third-party sellers.” People use Alexa and other Amazon devices, Prime Video, and Amazon Music.
This is marketing at its best. The milestones include the acquisition of Whole Foods and how that fits in the company's business strategy, the opening of Amazon Go stores, Treasure Trucks, and a mention of fashion. They also document sustainability, investments and job creation along with career opportunities.
5. Write with a soul, to connect
The letter is an example of what a six=page memo looks like. It's simple, with personality, complete with “angels singing” and metaphorical headstands to drive home Bezos' philosophy and practices.
It's easy to see it as a conversation, “What do you need to achieve high standards in a particular domain area?” and “Surely to write a world class memo, you have to be an extremely skilled writer? Is it another required element?”
One constant remains from Day 1 — customers come first.
In 1998 he wrote:
Our customers have made our business what it is, they are the ones with whom we have a relationship, and they are the ones to whom we owe a great obligation. And we consider them to be loyal to us — right up until the second that someone else offers them a better service.
His 2017 letter says:
One thing I love about customers is that they are divinely discontent. Their expectations are never static – they go up. It’s human nature. We didn’t ascend from our hunter-gatherer days by being satisfied. People have a voracious appetite for a better way, and yesterday’s ‘wow’ quickly becomes today’s ‘ordinary’.
The resetting of expectations is happening in all industries, not just retail. Hence the importance of setting the right expectations on scope.
While it's true that as customers we often satisfice, that is we pursue the minimum satisfactory condition or outcome, it's also true that we connect with brands that deliver the most value, consistently. Smart business leaders make that principle a core belief in their organization and communicate its scope.
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