At the end of April, Amazon released their year-end financials. As is a tradition for them, Jeff Bezos, the founder and CEO of Amazon, wrote a public letter to their shareholders going over what he thought had an impact on the company over the past year and what he believes the future will hold. What was most interesting this year was how without mentioning the actual word, Bezos’s letter for 2018 was about intrapreneurship. In many regards, the letter echoes many of the themes that we’ve been promoting in our journal.
Let’s take a look at Jeff Bezos has to say about intrapreneurship.
He starts by referencing something that intrapreneurs know all too well; that consumers are constantly changing and that companies need to adapt to the change too if they want to stay relevant. Bezos says, ”One thing I love about customers is that they are divinely discontent. Their expectations are never static – they go up. It’s human nature.” He continues to describe how customers are evolving by stating that, “People have a voracious appetite for a better way, and yesterday’s ‘wow’ quickly becomes today’s ‘ordinary’. I see that cycle of improvement happening at a faster rate than ever before.”
But just acknowledging that customers expectations grow and change every day isn’t enough. Companies need to understand this point, but most importantly be ready to do something about it. Bezos continues by saying, “I sense that the […] customer empowerment phenomenon is happening broadly across everything we do at Amazon and most other industries as well. You cannot rest on your laurels in this world. Customers won’t have it.” He understands that what customers think is great and novel today will merely be table stakes tomorrow. If companies, like Amazon, want to continue to be relevant to their customers in the future, they’re going to need to keep on innovating and getting better and more useful every time they do.
Bezos continues his letter by saying that one thing that keeps Amazon moving forward is that he and the people that work at Amazon insist on having high standards for everything they do. As should every organization. Their high standards are what drives them to continue to try new things to keep customers happy and coming back. It’s what drives them to keep being intrapreneurial. And, like any company that embraces intrapreneurism, they have had some really great successes, but also “…billions of dollars’ of failures along the way.” That drive to want to make the company better and do more for their customers keeps them going and willing to take risks and spend the money to try new things, regardless of success rates.
Bezos also references what he’s learned about having high standards inside a large organization like Amazon, but a lot of the lessons are ones that any company can learn from to help innovation and raise the intrapreneurial spirit of their people. Again, a lot of these ideas can easily be seen as intrapreneurial advice, regardless of if he sees it as such.
Bezos’ believes “high standards are teachable. In fact, people are pretty good at learning high standards simply through exposure. High standards are contagious.” This sounds very similar to what many may think of when they hear the term “a culture of innovation. Companies that understand that they need to explore their possibilities for the future usually say that they foster a culture of innovation to encourage and teach people to think about new and better ways the company can do things. And by not limiting the ideation and innovation to a specific department, it allows anyone to come up with ideas. This, as well, can be quite contagious as one employee may see their coworkers contributing to innovation projects and get inspired to do the same. Like high standards, intrapreneurism can also be catchy.
This idea of allowing everyone within an organization to catch the intrapreneur bug can also have great benefits. One of the main ones being that ideas for innovation can come from areas where some people may not even be thinking about, but people who work in those areas probably think a lot about. Bezos recognizes this when talking about how high standards are usually domain specific and not everyone can have high standards or know everything about every area of a company. However, there are people that specialize in certain areas of your business and they will have high standards or big ideas for those areas that they know well. Bezos understands that “There can be whole arenas of endeavor where you may not even know that your standards are low or non-existent, and certainly not world class. It’s critical to be open to that likelihood.”
The next area of intrapreneurship and high standards that Bezos explores in his letter is what he calls “scope” but can also be seen as “expectations.” In this area, he discusses how getting better at something takes time and dedication. It also means that people need to be realistic about how an innovation project might play out, from the time it takes to get it right to the fact that it may never even work out. Here he says, “Unrealistic beliefs on scope – often hidden and undiscussed – kill high standards. To achieve high standards yourself or as part of a team, you need to form and proactively communicate realistic beliefs about how hard something is going to be.” It’s good to have high hopes and expectations about the future of your company, but you also need to be realistic about how that future might play out and understand that creating innovation is an ongoing process, not something with a concrete finish line.
Lastly, in his letter about high standards, Bezos address the skills part of the equation. Like intrapreneurs, having an idea is only part of creating innovation, but sometimes people don’t have the skills that can take the idea to the next level. That’s why it’s important to make innovation a team effort. It’s great to have an intrapreneur on your team, but to create multiple intrapreneurs is what’s going to really help make innovation and ideas come to life. Recruiting the right people as part of your team is always important. Bezos says about this that, “Someone on the team needs to have the skill, but it doesn’t have to be you.”
While Jeff Bezos may look at the success of Amazon as a product of high standards, it’s also clear that Amazon is a company full of intrapreneurs all focused on making new and exciting things that will take the company forward. His letter highlights the importance of intrapreneurial people inside an organization, regardless of the fact that never uses the word “intrapreneur.”
We’d like to leave you with one last quote from Bezos’s shareholder letter that we think hammers home the case for intrapreneurs:
“Building a culture of high standards is well worth the effort, and there are many benefits. Naturally and most obviously, you’re going to build better products and services for customers – this would be reason enough!”
If you’d like to read Jeff Bezos’s full letter yourself, you can do so here.