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Bezos' Final Letter to Shareholders [Undigital Weekly Edition]
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When I wrote about Jeff Bezos for the cover of last month's print version of Inc. Magazine, I spent a bit of time reading through the shareholder letters he has written over the years. Maybe none was more famous than the one he wrote in 1997.
It was in that letter that Bezos set out his belief that "a fundamental measure of our success will be the shareholder value we create over the long term." It was that belief that drove Bezos' decisions over the past 24 years, standing as a guidepost along the way. In fact, Bezos has attached that letter to every one he's written since.
Now, as Bezos approaches the end of his time as CEO of Amazon, he has released his final shareholder letter. The letter has received praise from a variety of observers, many of whom point out that it contains a series of profound lessons. They are right, and as CNBC's Andrew Ross Sorkin suggests, it's absolutely worth the read.
This is, far and away, the best shareholder letter I've ever read. I don't say that lightly. It is @JeffBezos' last as CEO of @amazon. Read it until the very end. There are some real and profound lessons in there. https://t.co/DN7dB47Toa
-- Andrew Ross Sorkin (@andrewrsorkin) April 15, 2021
There is a profoundly simple lesson here I think can be too easy to overlook. Actually, as I thought about it, there are really two lessons. However, though they don't seem related on the surface, I believe they are inextricably linked, and worth exploring here together.
The first is that Bezos writes that in every effort, your goal should be "to create value for everyone you interact with." That's both a simple statement and a lofty goal at the same time. It's simple because, ultimately, it should be the goal for every business. Create value for those around you--your customers, your employees, and your shareholders.
Still, so many companies lose sight of this simple concept because, as it turns out, it's quite complicated. Take, for example, Bezos' thoughts about Amazon's responsibility to "do a better job for our employees." The company has faced intense criticism over complaints that its employees face harsh working conditions, most notably that its drivers are forced to relieve themselves in plastic bottles.
Bezos letter acknowledges that while it may have defeated a push to unionize workers at its distribution center in Bessemer, Alabama, "it's clear to me that we need a better vision for how we create value for employees--a vision for their success."
"Despite what we've accomplished, it's clear to me that we need a better vision for our employees' success," Bezos wrote. "We are going to be Earth's Best Employer and Earth's Safest Place to Work."
In the midst of a million moving parts that keeps a business the size of Amazon operating successfully, it's easy to lose sight of the value exchange that happens a million times a day on an individual level. Amazon does, after all, have more than a million employees.
That leads to the second, and maybe most important lesson from Bezos' letter:
This is my last annual shareholder letter as the CEO of Amazon, and I have one last thing of utmost importance I feel compelled to teach. I hope all Amazonians take it to heart... We all know that distinctiveness--originality--is valuable. We are all taught to 'be yourself.' What I'm really asking you to do is to embrace and be realistic about how much energy it takes to maintain that distinctiveness. The world wants you to be typical--in a thousand ways, it pulls at you. Don't let it happen.
I think that's so incredible because it's true. "The world wants you to be typical." When Bezos started Amazon and told people about his plan to sell books online, the question he most commonly got was "what's the internet?"
The world already had a way to sell books--in stores, on shelves. Why not just do it that way? Because Bezos had a different idea. He would take advantage of the reach of the internet to create incredible value for customers.
"We have always wanted to be Earth's Most Customer-Centric Company," Bezos wrote. "We won't change that. It's what got us here."
Bezos is referring again to that 1997 letter, where he talked about "obsessing over customers." Creating value for customers has long been one of the most prominent values for Amazon, and it's been one of the reasons the company is so dominant in the lives of so many people.
It turned out to be a good idea, but there were a million ways that it would have been easier to follow the typical path. Of course, I don't think anyone would argue that Amazon hasn't created extraordinary value--with a market cap of $1.7 trillion at the time I write this.
Bezos' point is, it wasn't easy:
"The world will always try to make Amazon more typical--to bring us into equilibrium with our environment. It will take continuous effort, but we can and must be better than that."
The same is true, by the way, for all of us.
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