How to Make Decisions Like Jeff Bezos

The Amazon founder and CEO shared insight into his process in his annual shareholder letter.
How to Make Decisions Like Jeff Bezos
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After more than 20 years in business, Amazon remains at the top of its game. It’s now worth more than the eight largest brick-and-mortar retailers combined, a list that includes Macy’s, Walmart and Target, and it was voted the most reputable company in the United States for the second year in a row.

The ecommerce giant seems to have a hand in everything, from drones and enterprise cloud services to award-winning films and television series and a few brick-and-mortar bookstores of its own.

So what is Bezos’s secret to making the right calls for the company? A four step decision-making process that he laid out in his 2017 letter to Amazon shareholders. Read on for his tips that every founder can use to lead their company in the right direction.

Related: Read Jeff Bezos's Inspiring Letter to Shareholders on Why He Keeps Amazon at 'Day 1'

1. Understand that you can’t make every decision the same way.

“Never use a one-size-fits-all decision-making process. Many decisions are reversible, two-way doors. Those decisions can use a light-weight process. For those, so what if you're wrong?”

2. You have to be able to jump without all the information.

“Most decisions should probably be made with somewhere around 70 percent of the information you wish you had. If you wait for 90 percent, in most cases, you're probably being slow. Plus, either way, you need to be good at quickly recognizing and correcting bad decisions. If you're good at course correcting, being wrong may be less costly than you think, whereas being slow is going to be expensive for sure.”

3. Build consensus by acknowledging disputes.

“Use the phrase ‘disagree and commit.’ This phrase will save a lot of time. If you have conviction on a particular direction even though there's no consensus, it's helpful to say, 'Look, I know we disagree on this but will you gamble with me on it? Disagree and commit?' By the time you're at this point, no one can know the answer for sure, and you'll probably get a quick yes.”

4. With stalemates, recognize that the only way out is through -- and fast.

"Recognize true misalignment issues early and escalate them immediately. Sometimes teams have different objectives and fundamentally different views. They are not aligned. No amount of discussion, no number of meetings will resolve that deep misalignment. Without escalation, the default dispute resolution mechanism for this scenario is exhaustion. Whoever has more stamina carries the decision … 'You've worn me down' is an awful decision-making process. It's slow and de-energizing. Go for quick escalation instead -- it's better.”

Edition: May 2017

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