Amazon CEO Bezos: Why I like to abuse employees

Since 1997, Bezos has issued a letter to shareholders every year. Bezos himself would add a lot of detailed management theory and long-term thinking to his letters, and they are widely considered to be required reading for business people.

On Wednesday local time, Bezos released his annual letter to shareholders. In the letter, Bezos emphasized the importance of setting high standards when running a business - by setting high standards, companies can meet rising consumer expectations in real time.

“How to stay ahead of the curve in the face of rising customer expectations? A single approach will not work. Multiple approaches must be combined, but high standards must be an important part of it.”< /p>

Bezos said that building a high-standard culture is very worthwhile and will bring many benefits. Regarding high standards, Bezos believes that they have four elements: "They are teachable, they are specific, you have to recognize them, and expectations must be clearly set."

In addition, Bezos also shared some important results last year in the shareholder letter:

Prime now has more than 100 million Prime paid members worldwide; Amazon Web Services’ average Sales have reached 20 billion US dollars; consumers have purchased tens of millions of Echo devices; Amazon Music has tens of millions of paying users...

Finally, Bezos said, "This year is the A Shareholder Letter Turning 20 years ago, our core values ??and approach have not changed. We continue to aspire to be the best customer-focused company on the planet, and we recognize that this is no small or easy challenge for us. Knowing we can do better, we find tremendous energy in the many challenges and opportunities ahead."

The following is the full text of Bezos' letter to shareholders

To our shareholders:

The U.S. Customer Satisfaction Index recently announced the results of its annual survey, with Amazon ranking first for the eighth consecutive year. There is a similar index in the UK, the UK Customer Satisfaction Index, provided by Customer Service, with Amazon UK ranking first for the fifth time in a row. Amazon was also nominated by LinkedIn to be included in the list of the strongest companies in 2018, making it the most sought-after workplace in the United States among professionals. Just a few weeks ago, the Harris Poll released its annual reputation quotient, which surveyed more than 25,000 consumers on a wide range of topics from work environment to social responsibility, products and services, and Amazon ranked first for the third consecutive year. Rank first.

Congratulations and thanks to the 560,000 Amazonians who, over the years, have demonstrated your commitment to operational excellence with your infinite devotion to customers, creative work every day. And on behalf of Amazonians everywhere, I want to sincerely thank you, our customers. We're incredibly excited to see your responses to these surveys.

One of the reasons I love my clients is that they are never satisfied. Their expectations are not static but rising, which is in line with human nature. We have not stopped at the primitive hunting period, and our pursuit of better things has never stopped. Yesterday’s “amazing” quickly became today’s “normal”. I see improvement cycles shorter than ever, probably because customers have more information at their fingertips than ever before—in just a few seconds or the press of a few keys on their phone, customers You can read, review, compare prices across multiple retailers, see if an item is in stock, find out when it will ship or your pick-up options, and more. These examples are from the retail industry, but I feel like the same customer empowerment phenomenon is happening broadly across our Amazon and most other industries. In this world, you can't rest on your laurels because your customers won't let that happen.

How to face rising customer expectations and stay ahead of the curve? A single approach will not work and a combination of methods must be used, but high standards must be an important part of it. Over the past few years, we've had some success meeting our customers' high expectations while also failing at a cost of billions of dollars. With these experiences as a backdrop, I’d like to share with you a few key points we’ve learned (so far) about high standards within organizations.

Intrinsic? Can it still be taught?

First there is a basic question: Are high standards intrinsic? Can it still be taught? If you let me join your basketball team, you can teach me a lot of things, but you can't teach me to grow taller. Do we need to choose people with “high standards” in the first place? If this is the case, the letter will primarily describe the recruitment effort.

But I don’t think so. I believe high standards can be learned. In fact, people learn high standards very easily through exposure and exposure; high standards are contagious. Bring new people into a team with high standards and they will quickly adapt, and vice versa. If low standards prevail, it will spread quickly.

While hands-on exposure is a great way to implement high standards, I believe you can learn more quickly by articulating some of the core principles of high standards, which is the approach I hope to share in this letter.

Universal? Or specific?

Another important question is whether high standards are universal? Or specific? In other words, if you impose high standards in one area, will other areas automatically meet high standards?

I believe high standards are specific and you must learn high standards individually in each area of ??interest. When I started Amazon, I set high standards in terms of business development, customer care, and employee recruitment, but I didn’t set high standards in operational procedures, including how to fix fixed problems, how to eradicate defects, how to inspect processes, etc. wait. I had to learn to set high standards in all of these areas (colleagues were my mentors).

Understanding this is important because it keeps you humble. Generally speaking, you can think of yourself as a person with high standards, but you can also have some frustrating blind spots. There may also be areas where you don’t even know that your standards are very low, or that there are no standards at all, and of course, they are not world-class. So, keeping an open mind is crucial.

Identification and Scope

What high standards do you need to meet in a particular field? First, you must be able to identify what is good and what is not good in that area. Second, your expectations must be realistic and you have an idea of ??how difficult it will be to achieve your goals (how much effort it will take).

Let me give you two examples. One is a life phenomenon, and the other is a real example that often occurs in Amazon.

The Perfect Handstand

A close friend of mine recently decided to learn to do the perfect handstand. Not leaning against the wall, not just for a few seconds, but taking a beautiful photo to post on Instagram. She decided to start doing headstands at her yoga studio. She practiced for a while, but the effect was not good. So she hired a handstand instructor.

In the first class, the coach gave her some good advice. "A lot of people think that if they practice hard, they should be able to master the handstand technique in two weeks. The reality is, even if you practice every day, it still takes about six months. If you think you can do it in two weeks, be prepared to give up. Right."

Unrealistic expectations are always hidden in the heart and will kill high standards. To achieve high standards, you, or as part of a team, need to develop and proactively communicate a true vision of how hard it is.

Six-page presentation

At Amazon, we don’t do PPT. Instead, we write a memo in six pages. We read it silently at every meeting. These memos vary greatly, some are as clear as angels singing, they are brilliant, thoughtful and can lead to high-quality discussions in meetings, and some are just the opposite.

In the example of handstand, the establishment of high standards is clear at a glance. List the action details, and then either you do it or you don't do it. The form of a memo is completely different. It's easy to tell the difference between a great memo and an average memo, but it's very difficult to work out the detailed requirements for a great memo. Most of the time, readers react very similarly to a first-rate memo, and they can tell at a glance. The standard is there, it's real, even if it's not easy to describe.

This is the realization we get. Often, when there are problems with memos, it's not that the writers fail to recognize high standards, but that their expectations are wrong: They mistakenly believe that a high-standard, six-page memo can be written in a day or two, or even a few hours. And in reality, it can take a week or more! They're trying to do a perfect handstand in two weeks, and we're not training them the right way. A top-notch memo requires repeated rewriting, working with colleagues who are asked to improve their work, setting aside a few days, and re-editing with new ideas. It cannot be completed in a day or two. The point is that you can improve your grades with simple teaching moves—a top-notch memo can take a week or more.

Skills

Are there skills required beyond identifying standards and having feasible expectations? Do you have to be a very skilled writer to write a top-notch memo? Are there any other elements required?

Not in my opinion, at least for the individuals on the team. Football coaches don’t need to play football, and movie directors don’t need to perform. But they all understand high standards and communicate realistic expectations to others. Even in the example of writing a six-page memo, teamwork is required. There is someone on the team who has this ability, but it may not be you. (By the way, in Amazon tradition, the author’s name never appears on the memo—the memo is the brainchild of the entire team.)

The benefits of high standards

< p>Building a culture of high standards is well worth it and brings many benefits. The most natural and obvious thing is that you will provide your customers with better products and services - and that's reason enough! Perhaps less obvious is that people are attracted to high standards - which is good for recruiting and retaining employees. More subtly: a culture of high standards protects the “invisible” but vital work that goes on within every company. I'm talking about unsupervised work, where the work gets done even when no one is watching.

In a culture of high standards, doing a good job is its own reward – part of professionalism.

Finally, high standards are fun! Once you get a taste of high standards, there's no turning back.

Thus, we believe that high standards have four elements: they are teachable, they are specific, you must acknowledge them, and expectations must be clearly set. For us, these jobs mean attention to detail at every level. We hope they will be of great benefit to you too.

Insist on the Highest Standards

Leaders relentlessly hold themselves to high standards that many may consider unreasonably high.

But we have benefited greatly from the high standards to which our leadership is committed. Although I can’t do a handstand myself, I can share some key results from the past year that we are very proud of, each of which is the culmination of many years of collective effort. We never take these for granted.

Recent milestones:

Prime - 13 years after launch, we now have more than 100 million paid Prime members worldwide. In 2017, Amazon Prime sold more than 5 billion items worldwide. This year, both the number of global Prime members and the number of U.S. Prime members have exceeded previous years. We expanded Prime membership services to countries such as Mexico, Singapore, the Netherlands, and Luxembourg, and launched Business Prime Shipping services in the United States and Germany. At the same time, we are also working hard to make Prime delivery faster, and now more than 8,000 cities and towns can enjoy same-day and one-day delivery services. Prime Now is supported in 50 cities in 9 countries around the world. Prime Day 2017 became our largest global sales day ever (until later surpassed by Digital Monday), with more new members joining Prime on this day than any other day in history.

AWS-Amazon Web Services' average sales have reached $20 billion, and now this business is experiencing rapid and healthy growth. AWS's pace of innovation has also grown—especially in emerging areas such as machine learning, artificial intelligence, the Internet of Things, and serverless computing technology. In 2017, AWS released more than 1,400 excellent services and functions, including Amazon Sagemaker, which can help ordinary developers create complex machine learning models more easily. We have tens of thousands of customers using AWS's comprehensive machine learning services. The number of active users increased by more than 250% last year. Amazon SageMaker contributed a lot, and many new users began to accept this service. In November last year, we held the sixth re:Invent conference. More than 40,000 people came to the event, and 60,000 people watched the live broadcast online.

Online retail business - In 2017, more than half of the products sold on the Amazon platform globally came from third-party sellers. This is the first time this has happened since the birth of Amazon. In 2017, more than 300,000 SMBs from the United States began selling products on the Amazon platform, and Amazon sold tens of billions of products from SMBs globally. On Prime Day in 2017, consumers purchased more than 40 million items on the Amazon platform. Compared with Prime Day in 2016, SMBs' sales on that day increased by more than 60%. Our global sales projects grew by more than 50% in 2017, and SMBs' cross-border e-commerce business accounted for 25% of all third-party sales.

Alexa - Consumers’ enthusiasm for buying Alexa devices has not diminished. Devices using the Alexa virtual assistant are one of the best-selling products on the Amazon platform. Alexa currently has more than 30,000 skills from external developers, and consumers can now use Alexa to control more than 4,000 smart home devices from 1,200 independent brands. Alxea gets smarter every day. We developed and deployed on-device fingerprint technology so that when an Alexa ad was played on TV, the Alxea device in the user’s home would not be accidentally awakened (this feature ensured that the Alexa ad we played during the Super Bowl did not divert tens of millions of devices Alexa wakes up at the same time). Last year, the accuracy of far-field speech recognition technology on Alexa devices improved by another 15%; in the U.S., UK, and Germany, we have improved the devices’ spoken language understanding capabilities over the past 12 months using machine learning and semi-supervised learning techniques , the accuracy increased by 25%. Finally, by using machine translation and transfer learning techniques, we have significantly reduced the time it takes Alexa to learn new voices, which allows us to serve consumers in more countries, such as India and Japan.

Amazon Devices – 2017 was our best year ever for hardware sales. Consumers have purchased tens of millions of Echo devices, and the Echo Dot and Fire TV sticks are the best-selling products of all products on Amazon — across all product categories and manufacturers.

During this year’s holiday shopping season, consumers purchased twice as many Fire TV sticks and children’s version of Fire Tablets as the previous year. In 2017, we released a brand-new Echo. The new device has a new appearance design, better sound quality, and a lower price; Echo Plus has a built-in smart home control center; and Echo Spot, this device is small and portable, and equipped with A dazzling prototype display. This year we also released the latest generation of Fire TV, which has a 4K Ultra HD display and supports high dynamic range images (HDR); and the Fire HD 10 tablet, which is equipped with 1080p Full HD display. This year, the Kindle device celebrates its 10th birthday. To celebrate this milestone, we released the new Kindle Oasis, which is the most advanced e-book reader we have launched so far. It uses a larger size With a large 7-inch display, this high-definition screen has a ppi of 300 and has a built-in sounder that allows users to listen to audiobooks.

Prime Video – Prime Video continues to make an important contribution to Prime membership growth and retention. Last year, we made improvements to Prime Video to provide consumers with a better experience. We’ve added Prime Originals like The Marvelous Mrs. Maisel, winner of two Critics’ Choice Awards and two Golden Globes, and the Oscar-nominated film The Big Sick.

Amazon Music – Amazon Music continued to grow rapidly in 2017 and now has tens of millions of paying users. Amazon Music Unlimited, our ad-free on-demand music service, entered more than 30 new countries in 2017 and doubled its membership base in the past six months.

Fashion - Amazon has become a platform for tens of millions of consumers to purchase fashion products. In 2017, we launched the first fashion-driven Prime product in the company’s history: Prime Wardrobe. The new service brings fitting rooms directly to Prime members' homes, where they can try on the latest fashion trends before buying. We've also teamed up with Nike and UGG to provide consumers with co-branded apparel from Drew Barrymore and Dwyane Wade, and we've also partnered with a number of other private labels, such as Goodthreads and Core10. We also provide a platform for thousands of designers and artists to sell their designs and work on Amazon’s Merch. In late 2017, we teamed up with Calvin Klein to launch an interactive shopping experience.

Whole Foods Market - After we completed our acquisition of Whole Foods Market last year, we announced our commitment to providing high-quality, all-natural, organic food that is accessible to everyone. We then lowered prices on some of our best-selling foods, including avocados, organic eggs and high-quality farmed salmon. Last November, we did our second round of price reductions, allowing our Prime members to purchase turkeys at a members-only discount during Thanksgiving. In February this year, we launched a two-hour delivery service in some cities. Prime members can enjoy this service for orders over $35. In the following months of March and April, we brought this service to some other cities, and we plan to make this service nationwide throughout this year. We are currently resolving some technical issues to allow Whole Foods Market to recognize consumers’ Prime membership status. Once this technology is completed, Amazon Prime members who shop in Whole Foods Markets will receive more benefits.

Amazon GO - Amazon GO is a new type of physical store where users do not have to queue to check out. We opened the first Amazon GO physical store in Seattle in January this year. Since opening, we’ve been delighted to see many customers describe the shopping experience as “magical”. This shopping experience relies on our independently developed computer vision technology, sensor fusion technology and deep learning technology. We combine these technologies to create this new shopping experience. When shopping, consumers only need to walk into the store, grab what they need for breakfast, lunch, dinner, snacks or other groceries, and then walk out. This way of shopping is more convenient than any other way of shopping before.

Treasure Truck - Treasure Truck has grown from one truck in Seattle to 35 trucks covering 25 cities in the United States and 12 cities in the UK. Our bubble-blowing, music-playing truck has delivered hundreds of thousands of orders to customers on everything from steaks to Nestlé’s latest products. In mid-2017, Treasure Truck also reached cooperation with some local communities to provide help to local people who lost their homes in communities affected by hurricanes.

India - Data from comScore and SimilarWeb show that Amazon.in has become the fastest growing online shopping market in India, and is the most visited website on both mobile and PC. App Annie said that in 2017, Amazon.in’s mobile application became the most downloaded shopping application in the Indian market. After its first year in India, the number of Prime members grew faster than any other country in Amazon's history. Currently, the Prime service in India covers more than 40 million local products from third-party sellers, and Prime Video is currently investing in large-scale self-made series in India.

Sustainable development - We have been committed to reducing carbon emissions by optimizing the transportation network, improving product packaging, and enhancing energy efficiency in operations. We also have a long-term goal of using 100% renewable energy for our global infrastructure. We recently built the Amazon Wind Farm in Texas, our largest wind farm yet, with more than 100 turbines capable of generating 1 million megawatt hours of electricity annually. We plan to use solar systems in 50 fulfillment centers in 2020. To date, we have built 24 solar and wind power projects across the United States and will build 29 more in the future. All of Amazon's renewable energy projects currently generate enough electricity to power more than 330,000 homes annually. In 2017, our Frustration-Free Packaging celebrated its 10th birthday. Frustration-Free Packaging is our environmentally friendly packaging project. In the past 10 years, this project has saved more than 244,000 tons of packaging materials. In addition, in 2017 alone, our project significantly reduced the waste of packaging materials, saving 305 million packaging boxes. Around the world, Amazon is signing partnerships with service providers to launch our first low-pollution last-mile delivery. Up to now, our transportation fleet in Europe has been equipped with a large number of low-pollution electric vehicles and natural gas vehicles, and we also have more than 40 electric bicycles for delivery in cities.

Helping small and medium-sized enterprises - Tens of millions of small and medium-sized enterprises from all over the world are now selling goods on the Amazon platform, where they can reach new customers from around the world. These small and medium-sized enterprises come not only from all over the United States, but also from more than 130 countries around the world. In 2017, 140,000 of all small and medium-sized businesses sold more than $100,000 in merchandise on Amazon. More than 1,000 independent authors earned more than $100,000 through Kindle Direct Publishing in 2017.

Investment and Job Creation - Since 2011, we have invested more than $150 billion globally in service networks, transportation capabilities and technology infrastructure such as AWS data centers. Amazon has created more than 1.7 million direct and insights jobs worldwide. In 2017, we created more than 130,000 direct Amazon jobs in the United States, excluding jobs acquired through acquisitions. As of now, Amazon has 560,000 employees worldwide. Our newly created roles span a variety of fields, from artificial intelligence scientists to parcel professionals and more. In addition to these direct jobs, we estimate that Amazon’s online marketplace has created 900,000 jobs globally, and that Amazon’s investments have created an additional 260,000 jobs in construction, logistics and other professional services.

Career Choice - We are proud to offer a career planning program for our employees: Amazon Career Choice. For hourly employees who have worked at Amazon for more than one year, we will prepay 95% of their tuition, fees, and textbook costs (up to $12,000), allowing them to study to obtain certificates for high-demand occupations, such as aircraft. Maintenance, computer-aided design, machine tool technology, medical laboratory technology and nursing, etc. Regardless of whether the skills these employees learn are among the skills required by Amazon, as long as the skills they choose to learn are in high demand, we will provide them with financial assistance. Since its launch in 2012, 16,000 employees worldwide, including 12,000 in the United States, have participated in the program. Commercial truck driving, medical care and information technology are the three most popular skills.

These milestones come from the contributions of many people. Amazon cannot do without all 560,000 employees from around the world, as well as 2 million sellers, hundreds of thousands of authors, millions of AWS developers, and hundreds of millions of valued consumers. These people are what motivate us to make progress every day.

The Road Ahead

This year marks the 20th anniversary of the first shareholder letter, and our core values ??and approach have not changed. We continue to aspire to be the best customer-centric company on Earth, and we recognize that this is no small or easy challenge.

We know we can do better, and we find great energy in the many challenges and opportunities that lie ahead.

Special thanks to every customer, we are grateful to be able to serve you. Thank you to our shareholders for your support, and to Amazonians around the world for your wisdom, passion, and high standards.

As usual, I am attaching the letter originally written in 1997. The time is still Day 1.