Amazon has been ranked number one by the American Customer Satisfaction Index for eight straight years. Here is how they did it.
As a business advisor and leadership coach, one of my first tasks with any organization is to help the top team set the bar. Without a clear bar, we have no target and no way to measure progress. However, my real job isn't getting these teams to reach that bar; my real job is teaching them how to raise that bar when they reach it.
For companies like Amazon, the idea of continuously raising the bar is hardwired into their DNA. The only way a company can reach and maintain such high levels of success is by systematically resetting their sights on higher and higher goals as they continue to succeed on previous ones. They are never "done" and they never stop thinking about how to be bigger and better.
Recently, I came across a letter Jeff Bezos wrote to shareholders, a letter which the SEC posted on their website. In it Bezos writes about how the constant pursuit of customer satisfaction has instilled an ethos in Amazon.
"One thing I love about customers" he writes, "is that they are divinely discontent." And it is this natural tendency of the customer to constantly want more that has driven the company to be fanatics about continuous improvement.
Bezos identifies one simple thing that drives continuous improvement within Amazon. And any company can use this simple tool to fuel growth and innovation. It's simple, but not simplistic, and it's something that you can spend a lifetime pursing and still not be finished with.
What drives Amazon's success is their dedication to always setting high standards.
Setting high standards does not just apply to the executive team, but with every team and at every level of the organization. High standard are part of Amazon's culture and ethos. It's a core value and a continual pursuit.
But setting high standards is not easy, nor is it cheap.
First, standards are infectious. Once one person raises or lowers the standards, others tend follow. It's critical to set the standards high and then push people to achieve them. It's a virtuous cycle: success will continue to build more success.
However, the opposite it true as well. As soon as one person gets away with lower standards without comment or correction, then others will quickly follow suit. And once this momentum builds, it's difficult to arrest.
For companies like Amazon, where employees tend to be some of the smartest and brightest in their fields, another problem presents itself. People who are exceptionally smart in one area will tend to assume they are exceptionally smart in many others--even when they are not.
Bezos emphasizes the need for everyone to be open to the fact they have weaknesses and blind spots. The answer he gives is to get good feedback and insights from the people around you. Reflecting back on the early days of the company he says, "my colleagues were my tutors."
Having such high standards has cost Amazon a lot of time and money.
For example, instead of quick and easy slide presentations, teams at Amazon write six-page memos to lay out ideas in narratives which are read in silence at the start of a meeting. When well-written, these frame up concepts perfectly and kick off highly-productive discussions.
But these memos are very hard to write well and people often spend a week or more creating a memo. Many companies would baulk at that kind of time investment. For Amazon, it's just one more example of the bar they are willing to set and the work they are willing to put in.
What are the practical benefits of such high standards?
The positive outcomes show up in their products and services. High standards drive the breadth and depth of Amazon's offerings and the quality of their service. Bezos lists out all of the innovation and success initiatives they have recently launched. He lists everything from Prime Video, AWS, and Alexa to the internal accomplishments with programs such as Career Choice where they pay up to $12,000 towards the education of Amazon employees.
Beyond their products, high standards drive internal culture. And while it's a demanding place to work, it's also an engaging place to work. Good people are drawn to high standards and so they are drawn to Amazon. This creates a virtuous cycle so long as these standards are maintained.
Good companies learn how to set goals and achieve them. Great companies learn how to continually raise the bar on performance to reach ever higher levels of success.
While the vast majority of companies are a fraction of the size of Amazon, they can adopt the same approach to set high standards and achieve the same benefits of this continuous pursuit of improvement. It's certainly not easy, but it's worth it.
This article was originally published on Inc.com: https://www.inc.com/bruce-eckfeldt/this-shareholder-letter-written-by-jeff-bezos-reveals-1-simple-secret-to-amazons-success.html