Sunday, January 28, 2018

The Everything Store: Jeff Bezos and the Age of Amazon

Every company claims it is customer centric, but have you ever seen a CEO keep an empty chair at management meetings to represent the customer?

Welcome to Amazon, and the cult of Jeff Bezos. 

“The Everything Store: Jeff Bezos and the Age of Amazon” by Brad Stone is an extremely well researched, almost biographical account of, and its founder Jeff Bezos. Aided by dozens of interviews (including some with Bezos himself) with former and current employees, suppliers, competitors, friends and relatives, family members, teachers and almost anyone who came in contact with him, the author has built an in-depth profile of Amazon and its legendary founder Jeff Bezos. The author traces the journey of Amazon right from the birth of the idea in the mid-1990s and takes the reader, often in excruciating detail till where it stood when the book was published in 2013.

The origin
It was 1994 and those were early days of the Internet. But Bezos was quick to see its potential. The idea of Amazon was simple – an internet company that served as an intermediary between customers and manufacturers, and sold every type of product all over the world. Throwing away his lucrative Wall Street job, Bezos swooped down on the opportunity and set up Starting out first with selling books, Amazon soon spread itself to other categories. And the rest – as they say – is history.

The book gives a deep insight into Amazon and its founder Jeff Bezos

Bezos is Amazon. Amazon is Bezos.
Bezos’ overwhelming personality is stamped all over Amazon. The story develops as a compendium of countless narratives from people who had close encounters with Bezos and brings out vividly his extraordinary personality and management style. Exceptional intelligence, competitive spirit, a volcanic temper, ruthless combative approach, an almost limitless capacity to put in hard effort and an outlandish ambition (Bezos is also “working to lower the cost of space flight to build a future where we humans can explore the solar system firsthand and in person”, by the way) - this is what defines Bezos. The book portrays him as an extremely difficult micromanager to work for, setting very high standards that others struggle to meet. Bezos’ personality style has ensured a ‘confrontationist’ culture at Amazon. Bezos abhors social cohesion – the natural impulse to seek consensus.  Yet, the author says, former Amazon employees often consider their days at Amazon the most productive time of their career. “Colleagues were smart, work culture was challenging and there were constant opportunities for learning” says one of them.

Customer First
How did Amazon manage to grow at such a breakneck speed? How did Amazon succeed where others didn’t? Bezos realized that e-Commerce had the potential to understand its customers in a way brick & mortar merchants can never do. “We are genuinely customer centric, genuinely long term oriented and genuinely like to invent”, Bezos is quoted in the book as saying, building Amazon on the edifice of a few clearly defined and religiously followed founding principles – customer obsession, frugality, bias for action, ownership, a high bar for talent and innovation. Among this, extreme customer centricity comes out repeatedly as the single most defining character that distinguishes Amazon from others.  “There are two kinds of retailers – those who work to figure out how to charge more, and those who try to figure out how to charge less. We are in the second category. Period.”

Tech, not Retail
Bezos visualizes Amazon as a technology company, not a retailer. A key element of Amazon’s success has been Bezos’ constant focus on innovation. Negative reviews, referral fees, platform services, the Amazon Marketplace – Amazon claims many a firsts to its credit, though it was not the only or even the first online bookstore to start operations. Complex algorithms studying customer behavior, calculating cheapest & fastest shipping routes, crawling the web to keep a tab on competitor prices – all have played a crucial role in Amazon’s success. Yet, Bezos struggled to present Amazon as a technology company pioneering e-Commerce until much later when businesses like the Cloud and Kindle came along. With Cloud, Bezos dreamt of ‘a student in a dorm room having at his disposal the same infrastructure as the largest companies in the world’. And true to it, it facilitated the creation of thousands of internet startups, pulling out the tech sector from a post depression in the early 2000s.

A must read
As I write this review in early 2018, Jeff Bezos has already surpassed the likes of Bill Gates and Warren Buffet to become the richest man in the world. And while the others may well be past their prime, the Amazon story has only just begun.

Saturday, December 9, 2017

Book review: Hit Refresh

Can elephants dance? Satya Nadella, only the 3rd CEO in Microsoft’s history certainly thinks so, as he narrates the story of how he is trying to inject new life into Microsoft’s soul.

Once nearly synonymous with personal computing, Microsoft lost its mojo in the last decade as mobile phones literally gatecrashed into our lives and became the primary channel to access everything from music to internet. Many had written off Microsoft at this stage, but Satya narrates how he is breathing new life into the company, changing attitudes and bringing in new paradigms.

Microsoft, is changing, and making the world an even better place for us

The book starts on a personal note as the author traces his origins from childhood in the small towns of India to his entry into Microsoft headquarters in Seattle in the early 1990s and his eventual rise to the top in 2014. The author is modest in often acknowledging the role of luck in his success, pointing out how he always found himself at the right place at the right time. Son of a civil servant, the author narrates his fascination for cricket and early leadership lessons he took from the game. There are stories from the ups & downs in his personal life, like meeting the love of his life, and the trying circumstances surrounding the birth of the first child. 

This is a book about transformation, one that is taking place within him and also within the company. What was the situation at Microsoft when Satya took over? What did he inherit? And what is it that he wants to change? Trying to bring about culture change in such a big organization is not easy, it is a painfully slow grind but the author’s efforts have slowly started showing results. There is now a renewed growth mindset. Several key events and decisions, such as the launch of Windows 10, learnings from the Nokia acquisition and corporate dispute with Samsung etc. are described, giving an insight into the author’s personality and working style. The author shows how his seemingly unconventional decisions to partner arch-rivals such as Apple or Google have paid off. Surprisingly, even in this dispassionate world of coding and corporate strategy, Empathy keeps repeating itself.

And thankfully, the book doesn’t end here!

In the latter sections, the author takes a deep dive into technologies of the future, and how Microsoft is “trying to imagine a better future for everyone”. It is this that I liked the most. The author writes about three things Microsoft is betting on – Mixed Reality, Artificial Intelligence and Quantum Computing. What are they? What can they do? And where are we – the human race - heading? These are topics not just for the geeks. The author shows how these technologies will become essential tools in everything we do – from education to medicine, or help us fight cancer or global warming. Going beyond pure computing, technologies of the future will not only help us see, hear and analyze, but also “make us feel”. Does this mean machines will eventually ‘take over’ - as some fear? Or will they only augment human capabilities to make this world an even better place for all of us? It is this ‘Human vs. Machines’ OR ‘Human + Machines’ debate that is currently the rage the world over, and the author assures us there is nothing to fear from the future.

In recent times, the growth of technology has also thrown up difficult issues surrounding privacy, security and free speech. The author discusses delicate issues such as privacy of user data and government surveillance, the dilemma between privacy vs. security, individual freedom and liberty vs. public safety. The author rues that laws always lag technological changes, causing friction between Regulation and the Corporation. The role of companies in modern society is also discussed.

As they say, ultimately the best way to predict the future is to invent it. And that is what Microsoft is doing. 

Do give this book a read – it did change my perception of Microsoft, and our future - for the better.

Sunday, December 3, 2017

Book review: How Google Works

What makes Google the company that it is? How can a company come to play so important a role in our lives in so little a time? “How Google Works” is a remarkable revelation of the secret sauce that the company is made of. Written by Eric Schmidt and Jonathan Rosenberg – two Google veterans – the book gives an inside view of how Google has created an operating model that is so successful. Schmidt was the Google CEO during its crucial formative years from 2001 to 2011 and is presently its Executive Chairman (of Alphabet). Jonathan was the Head of Products and oversaw Google’s blockbuster products Google Search, Google Ads, Gmail, Android, Chrome etc. during the period.

Google has created an operating model that is impossible to replicate

Written in simple language and lucid style, the book narrates how Google has turned conventional wisdom of corporate management upside down while delivering remarkable results. Issues such as corporate culture, strategy & planning, hiring practices, decision making and communications are explained in detail. Through stories and anecdotes, the book brings alive the company in front of the reader. What can you say about a company which believes ‘processes are bad’, you should ‘fail quickly if you want to’, ‘a top priority should be offices should be crowded’ or ‘messiness is usually a good sign’? The authors’ views on key corporate issues such as team sizes, compensation systems, meeting rules, rules for e-mails etc. will provide useful insights to modern day managers.

The roots for Google’s success are sowed right from when an employee is recruited. There is tremendous emphasis on recruiting the right person. As the authors say, interviewing is one of the most important skills that managers need to have. The urgency of the role isn’t sufficiently important to compromise for quality on hiring. Google wants candidates who have “comfort with ambiguity, bias to action and collaborative nature”. The section on interviewing is the one I liked the most.

It was also interesting to see Google’s emphasis on product excellence, user focus and on issues such as integrity. “Selling a thing to a customer she doesn’t need or doesn’t benefit from” is an integrity issue at Google and is ‘…against the basic interest of the company’. I am sure this will make many a sales and marketing managers squirm!

A key challenge for Google over the years has been to retain that start-up culture while it achieves scale. How does Google manage that? As the authors say at the beginning, “…the only way to succeed in business in the 21st century is to create great products, and the only way to do that is to attract smart creatives and put them in an environment where they can succeed at scale. …In a large company it becomes more and more difficult to create that environment…forces in a large company can actively conspire against those…who are trying to do something different”. It is these forces that Google has successfully conquered. 

For managers, HR professionals and all corporate watchers in general, this book is a ‘must read’.