Leadership of Jeff Bezos, through my Lens

Is Bezos a manager or a leader or both?

A manager is a person that administers and manages a group of people and gets the work done by them within the stipulated timeframe. On the other hand, a leader is a person that inspires and motivates people to achieve a particular vision and goal. Whilst leaders focus on motivating/inspiring people at the workplace and developing vision, managers focus on fundamental management functions such as planning, organizing, and controlling.

Bezos, the founder of Amazon, is more of a leader than a manager. Bezos is known for changing his style of working in accordance with the changing business environments and the people he is working with. Bezos, predominantly, is a democratic leader because Amazon is operating in an industry that is data-obsessed. He collects the opinions of the other senior managers and before making the business decisions.

Bezos is a transactional leader; it is evidenced by the rigorous benchmarks that he uses at the workplace. These benchmarks are playing a crucial role in enhancing the efficiency of the operational environment at Amazon. On the other hand, he demonstrates the transformational leadership style by acting as an agent of change who seeks innovation. Transformational leadership has helped Bezos to become highly successful in creating a fascinating vision that influences the mindsets of employees positively.

Leaders go against the existing rules and norms. They deconstruct the existing products, processes, and ideas in order to make sure that the organization is relevant to the current business trends. Bezos is a great leader because he deconstructed the traditional business process of delivering the goods and come up with the “The Earth’s Biggest Bookstore” that makes use of the internet for order processing and delivery.

However, he sometimes emphasizes making senior business managers using an authoritative working style. The authoritative style at the top management level is evidenced when Bezos and his lieutenants override the data and opinions collected from the functional heads and make decisions based on “gut feel”. The usage of the authoritative style of working is an example of the ‘manager’ within Bezos.

Bezos’s characteristics helped him drive the company forward.

Bezos has several unique characteristics that every entrepreneur needs to drive his entity forward. Some of these characteristics are outlined below.

Vision: Bezos is a visionary. The ability to develop a vision and share it with the employees is one of the important leadership characteristics that helped Bezos to drive Amazon forward. Since vision is in place, Bezos has developed a habit of willing to experiment and create new platforms that enhance the customer experience and meet the customer’s expectations. “Bezos vision is reflected in the creation of platforms such as Echo, the Amazon App Store, Amazon Video, Amazon Music and Amazon Prime”.

Customer Focus: Customer focus is another important characteristic that helped Bezos to drive Amazon forward. Bezos is said to be one of the very few modern-day entrepreneurs who have taken the slogan “The Customer is Always Right” into the digital era. Whilst most of the technology-driven companies outdo each other by offering higher worker perks and no-frills, Bezos is trying to outperform the competition by coddling his millions of customers. The customer focus has ensured that the organization’s cash registers were ringing during the recession period too. In fact, Bezos believes in working backward after determining the customer needs. Bezos never bothers breaking apart on anything, even if it was once a powerful department when he recognizes that it is not meeting customer’s expectations. The innovative concepts such as Kindle and E-book Reader were the outcomes of working backward on the customer’s desires rather than on the engineer’s tastes.

Innovation: Bezos loves to implement innovative ideas at the workplace. According to Bezos, “invention requires a long-term willingness to be misunderstood.” By adopting this principle, Bezos has been breaking the norms and thinking out-of-the-box, and making crazy decisions that lead to innovation. The innovation, though it fails sometimes, is helping Amazon to offer new experiences to customers. Bezos feels that the stumbles and failures are part of the business because they help the organization learning something new and useful.

Frugality: Being frugal is one of the major characteristics of Bezos. In fact, he has made sure that frugality is one of the eight core business values of Amazon. His frugality was apparent when he started Amazon.com at his garage by turning the wooden door into the table. Bezos is insisting the organization be frugal and pass the savings to the customers. The 80% or higher customer retention rate for all the products, a $90 billion stock market valuation, and double-digit revenue growth are the results of the characteristic called ‘Frugality’.

What could be the consequences of taking his style too far?

Bezos has a unique management style that most modern-day businessmen don’t follow. The consequences of taking Bezos' style of managing/leading the company too far would be positive as well as negative.

Negative Consequences

Increased Employee Turnover Rates: Most of the employees of Amazon feel that Bezos' style of leading the organization is too intense and authoritative. Bezos uses a higher number of metrics against which the performance of the teams would be measured. There isn’t much scope for social cohesion and soothing words at the workplace of Amazon. If Bezos pushes this style of managing the workplace further, there is a high possibility that the employees develop a negative perception towards the top management and organization. This kind of negative perception among the employees might increase the employee turnover rate.

Increased Costs: Pushing employees to be as innovative as possible without fearing failure would not only increase the operational costs but also waste resources. It is very good to be supportive of innovation but giving higher freedom to employees, stating that every failure is a learning lesson, might develop an attitude of wasting the resources among the employees. The resource wastage apparently results in higher increased costs.

Positive Consequences

Increased Customer Retention Rates: Working backward after determining the needs of customers in order to develop solutions is a great initiative because it enhances customer satisfaction levels. If Bezos pushes his style, of giving higher preference to customers’ expectations, too far, there is a high possibility that Amazon would offer the services or products which are most liked by the customers. The higher customer satisfaction apparently leads to increased customer retention rates.

Enhanced Organization’s Reputation: Bezos is ensuring that his strategy bases majorly on the areas that won’t change. For Amazon, Bezos is making sure that the strategies are based on areas such as offering a wider selection, giving products at lower prices, and delivering products on or before the promised date. Since these three are fundamental areas of business, focusing more on them would help the organization to meet the customer’s expectations and develop a strong brand image and reputation in the market.

Is Bezos the right person for Amazon during the times ahead, or does the company now require more of a ‘manager’ than a ‘leader’?

The business environment is transforming very swiftly due to the factors such as changing people’s lifestyles, the introduction of newer technologies, easy availability of information to customers, and increasing competition levels within the industries. While operating in such a volatile business environment, the entrepreneur should base his strategies on the current circumstances and changing business trends. The success rate of the entrepreneurs, who stick to same-old business strategies, would be very low in this modern-day business environment. A couple of decades back, entrepreneurs have focused on managerial functions such as planning, organizing, staffing, coordinating, and controlling. They have used an authoritative style of management which emphasizes giving lesser freedom to subordinates and dictation of workplace policies and controlling the activities without the meaningful participation of the subordinates. If this management style is used in this modern-day environment, the entrepreneurs would get the work done because employees are seeking higher freedom and an inclusive working environment that facilitates social cohesion.

Since Amazon is operating in the e-commerce industry, which has been undergoing tremendous changes off-late, it needs a leader who has the capability to foresee the impending threats and changing business trends before developing the strategies than a manager who develops the strategies upon a change is taken place. Bezos is a highly proactive leader who recognizes the business trends before they take place and implements new strategic initiatives though they look like money-losing distractions during the starting stages.

Bezos is the right person for Amazon during the times ahead because he understands the e-commerce industry better than anybody else. With the humongous experience of developing new strategic initiatives, the ability to share the vision with the employees, being a bit crazier to make decisions that lead to innovation, and prioritizing the customer service, Bezos is going to be the most appropriate leader for Amazon. However, it is important for Bezos not create an environment that reflects the intensity and authoritativeness as they reduce the morale of the employees. Amazon should develop an inclusive workplace where employees feel that their opinions are valued. There is no harm in being a customer-centric firm but it is not advisable to ignore the employees as they act as facilitators of the customer service. If the employees are not happy, the organization would fail to reach its objectives of being the most customer-centric firm in the world.