Jeff Bezos’ Leadership Style: What Entrepreneurs Can Learn

Amazon CEO and founder Jeff Bezos iStock

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Recently, a 1999 interview between Jeff Bezos and a CNBC reporter has been doing the rounds. The clip, which is, at times, contentious, highlights Bezos' philosophy: an ardent focus on customer service. Whether it is in the retail sphere, in cloud computing, or any of the other number of projects under the Amazon umbrella, his strict adherence to this philosophy has never waivered – and to great success.

So what else makes Bezos stand out from his peers? How did he become a billionaire? Did he employ any "special" management tricks? To answer these questions – and more – it is important to look closer at his leadership style – and deduce what veteran business owners and young entrepreneurs alike can learn from the man.

Let's explore.

Curriculum Vitae

Age: 56

Born: Albuquerque, NM, USA

Education: Princeton University, BSE Electrical Engineering and Computer Science (1982-86)

Work: Head of Development / Directer of Customer Service, Fintel (1986-88) | Product Manager, Banker's Trust (1988-90) | Senior Vice-President, DE Shaw (1990-94) | Founder & CEO, Amazon (1994-Present)

Leadership and Management Style

While customers may not necessarily care, Bezos' leadership style has come under fire in recent years. Various news articles and exposes by business journalists and ex-employees paint an unflattering portrait of life at Amazon: Bezos is a fierce competitor, willing to utilise questionable methods to extract the maximum out of all his subordinates. Whether this is a positive attribute or not can is debatable, but Amazon does not possess a trillion-dollar market capitalisation without good reason.

Regardless of this ethical question mark, Bezos still represents the go-to case study for many university business classes, applying everything that lecturers and experts recommend in business management:

  • Vision
  • Simplification
  • Commitment
  • Knowing the market
  • Self-promotion 

Of course, these qualities are not enough in modern business: you need a product to succeed, too. And that is also what Bezos has concentrated on for the last 20 years: the mantra of 'invent or innovate'.

From the Amazon store to Amazon Web Services; from Prime to every other venture in his vast ecosystem; Bezos has aimed to make every element of his business work through being customer-centric and patient. Some branches have not succeeded, such as the Fire smartphone, but Bezos is not afraid to experiment and learn from failure – a vital attribute of any entrepreneur.

"If you're going to take bold bets, they're going to be experiments, and if they're experiments, you don't know ahead of time if they're going to work," he told a Business Insider conference in 2014. "Experiments are by their very nature prone to failure. But a few big successes compensate for dozens and dozens of things that didn't work".

So, product, patience and customer service are the reasons for Amazon's impressive success. But is there a missing link to all this? Yes: the employee.

Before getting into some of the complaints about the average workday at Amazon, it should be noted, too, that employees are treated as if they are the CEO. According to various reports, employees have a lot of control over their projects, allowing them to think outside the box and test out an idea that can potentially help Amazon flourish even more. They have the work – plenty of it – but Amazon takes it one step forward, striving to offer every staff member autonomy and confidence. 

According to an infamous 2011 blog post by Steve Yegge, a software engineer and former Amazon employee, Bezos is hard to impress, easy to agitate and hates PowerPoint presentations. In Brad Stone's book, The Everything Store, Stone intimates that the Amazon workplace is not the friendliest or most relaxing of environments. Reportedly, Bezos is prone to outbursts at employees, while the book also alleges that he once removed transportation perks because "he didn't want to give them any reason... to catch the last bus of the day".

Yet if all of this is true, then Bezos has never attempted to pretend otherwise. In a 1997 letter to shareholders, he wrote that he told all Amazon applicants that "it's not easy to work here", and that "you can work long, hard, or smart, but at Amazon, you can't choose two out of three". It should also be noted that Amazon promotes many workers from within, refusing to seek out external candidates when it maintains its own treasure trove of employees.

In academic terms, it's fair to say that Bezos applies an autocratic approach to management. One person makes all the decisions, ignores most input from others (reports abound that he regularly hires industry experts only to avoid all of their recommendations) and refrains from thinking about the considerations of employees.

Achievements

Amazon's – and, by definition, Bezos' – achievements are widely known. But they were only possible because of what the company offered. The business started life as a used bookstore, which then ballooned into an eclectic online retailer. It pioneered eBook technology, digital streaming, cloud computing, and so much more. Who benefited from this service and tech innovation? The consumer.

Sure, the achievements helped shareholders receive a handsome payday, but these advancements improved the lives of consumers and businesses. They impacted retail businesses' ability to thrive in an evolving marketplace, too, driving eCommerce and transforming the retail environment. They also allowed entrepreneurs to attain success by utilising its third-party marketplace. Most importantly, consumer purchasing power greatly expanded thanks to the affordable prices instituted by Amazon.

Key Numbers

When Bezos eventually does retire from (or sell) his company, it is hard to think that shares will rally on the news. Amazon was the brainchild of Bezos, and everything the company continues to produce and to propose is because of his transformational vision. It is hard even to conceive what else will be invented by Amazon, but that is the key reason behind why he is worth $115.5bn.

Just take a look at the numbers that Bezos has helped put together over the last two decades at his company:

  • A $900bn market cap
  • A 100,000% gain in share price since 2000
  • $233bn in annual revenues
  • $10bn in annual profits
  • $360,000 in revenue per employee
  • 750,000 global employees

For anyone who owns stock in Amazon, works for the company or patronises the website, these figures make for happy reading.

Influences

Bezos revealed in a Forum on Leadership panel that he had many influences growing up, such as his elementary school teachers, his parents, his grandfather, and Berkshire Hathaway CEO Warren Buffett. Even today, he still looks up to a lot of people, including Disney CEO Bob Iger and JPMorgan Chase CEO Jamie Dimon.

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If you are a shareholder, you would want Jeff Bezos at the helm. If you are an employee who wants to succeed and climb the corporate ladder, Bezos is someone you would want as your boss. If you are a consumer, you appreciate and desire to buy from a company owned by Bezos. Indeed, everyone has a vested interest in the success of Amazon because that is how significant an influence it has become in today's world – online and offline. Some critics may not appreciate the way Amazon is run, but the ability and results of its owner cannot be called into question.