Amazon CEO Jeff Bezos wants his $430 billion publicly traded company to behave with the urgency of the startup it once was.
To make sure he acts quickly, he follows a set of guidelines for “high-velocity decision-making” he laid out in his annual letter to shareholders. He urges his employees to follow them, and they contain sound principles for any competitive organization:
Most decisions should be made with only about 70% of the information you need; if you wait for 90% or more, you’re moving too slowly. A well-managed company can adjust if necessary. “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,” Bezos said.
Bezos uses the phrase “disagree and commit,” which he employs when he realizes a consensus isn’t possible, but he trusts the judgment of the other decision makers. It means that while Bezos disagrees with the decision, he’s committed to a successful outcome. It’s a much faster alternative than the team having to convince him to change his mind.
In a large and complex company like Amazon, different teams will have different objectives that no amount of discussion will resolve. Those conflicts need to brought to more senior executive to broker. “Without escalation, the default dispute resolution mechanism for this scenario is exhaustion…. ‘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.”
As Amazon grows even larger, and branches into more and more disparate business—from cloud hosting to movie production to smart devices—it’s inevitable that conflicts will arise. And while the company has a reputation for its sharp-elbowed culture, Bezos doesn’t want disputes to bog down decision making. By posting the rules of the road, Bezos is setting out Amazon’s priorities: It’s OK to make the wrong decisions; just don’t make them slowly.