Customer

On The Everything Store

I recently finished reading The Everything Store – Jeff Bezos and the Age of Amazon – by Brad Stone.

Below are key excerpts from the book that I found particularly insightful:

There is so much stuff that has yet to he invented. There’s so much new that’s going to happen. People don’t have any idea yet how impactful the Internet is going to be and that this is still Day 1 in such a big way.

“If you want to get to the truth about what makes us different, it’s this,” Bezos says, veering into a familiar Jeffism: “We are genuinely customer-centric, we are genuinely long-term oriented and we genuinely like to invent. Most companies are not those things. They are focused on the competitor, rather than the customer. They want to work on things that will pay dividends in two or three years, and if they don’t work in two or three years they will move on to something else. And they prefer to be close-followers rather than inventors, because it’s safer. So if you want to capture the truth about Amazon, that is why we are different. Very few companies have all of those three elements.

So looking back on life’s important junctures was on Bezos’s mind when he came up with what he calls “the regret-minimization framework” to decide the next step to take at this juncture in his career.

We believe that a fundamental measure of our success will be the shareholder value we create over the long term. This value will be a direct result of our ability to extend and solidify our current market leadership position. The stronger our market leadership, the more powerful our economic model. Market leadership can translate direct! to higher revenue, higher profitability, greater capital velocity, and correspondingly stronger returns on invested capital. Our decisions have consistently reflected this focus. We first measure ourselves in terms of the metrics most indicative of our market leadership: customer and revenue growth, the degree to which our customers continue to purchase from us on a repeat basis, and the strength of our brand. We have invested and will continue to invest aggressively to expand and leverage our customer base, brand, and infrastructure as we move to establish an enduring franchise.

Jeff Bezos embodied the qualities Sam Walton wrote about. He was constitutionally unwilling to watch Amazon succumb to any kind of institutional torpor, and he generated a nonstop flood of ideas on how to improve the experience of the website, make it more compelling for customers, and keep it one step ahead of rivals.

Bezos was obsessed with the customer experience, and anyone who didn’t have the same single-minded focus or who he felt wasn’t demonstrating a capacity for thinking big bore the brunt of his considerable temper.

“My approach has always been that value trumps everything,” Sinegal continued. “The reason people are prepared to come to our strange places to shop is that we have value. We deliver on that value constantly. There are no annuities in this business.” A decade later and finally preparing to retire, Sinegal remembers that conversation well. “I think Jeff looked at it and thought that was something that would apply to his business as well,” he says.

“I understand what you’re saying, but you are completely wrong,’ he said. “Communication is a sign of dysfunction. It means people aren’t working together in a close, organic way. We should be trying to figure out a way for teams to communicate less with each other. not more.”

That was a typical interaction with Jeff. He had this unbelievable ability to be incredibly intelligent about things he had nothing to do with, and he was totally ruthless about communicating it.

If Amazon wanted to stimulate creativity among its developers, it shouldn’t try to guess what kind of services they might want; such guesses would be based on patterns of the past. Instead, it should be creating primitives—the building blocks of computing—and then getting out of the way. In other words, it needed to break its infrastructure down into the smallest, simplest atomic components and allow developers to freely access them with as much flexibility as possible.

‘Jeff does a couple of things better than anyone I’ve ever worked for,” Dalzell says. “He embraces the truth. A lot of people talk about the truth, but they don’t engage their decision-making around the best truth at the time. “The second thing is that he is not tethered by conventional thinking. What is amazing to me is that he is bound only by the laws of physics. He can’t change those. Everything else he views as open to discussion.”

On a closing note:

Amazon may be the most beguiling company that ever existed. and it is just getting started. It is both missionary and mercenary. and throughout the history of business and other human affairs, that has always been a potent combination. “We don’t have a single big advantage,” he once told an old adversary, publisher Tim O’Reilly, back when they were arguing over Amazon protecting its patented 1-Click ordering method from rivals like Barnes & Noble. “So we have to weave a rope of many small advantages.” Amazon is still weaving that rope. That is its future, to keep weaving and growing, manifesting the constitutional relentlessness of its founder and his vision. And it will continue to expand until either Jeff Bezos exits the scene or no one is left to stand in his way.

A recommended read in the areas of technology and corporate history.

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On Discovering The Soul Of Service

I recently finished reading Discovering The Soul Of Service – The Nine Drivers of Sustainable Business Success – by Leonard L. Berry.

Leonard summarizes the main premise of this book as: “My purpose in this book is to identify, describe, and illustrate the underlying drivers of sustainable success in service businesses. Creating a successful service operation is unquestionably a difficult task. However, sustaining success can be even more difficult. Services are performances, and the challenge of sustaining the performers’ energy, commitment, skills, and knowledge day after day, week after week. month after month, year after year—especially as the organization grows and becomes more complex—is daunting. The greater the involvement of people in creating value for customers, the greater the challenge. This is a book on the lessons 14 outstanding service companies teach about sustainable success. And the lessons they teach are clear indeed. Although the sample companies differ on the outside – the nature, size, and structure of their businesses—to a remarkable degree they are the same on the inside, sharing the drivers of their ongoing success.”

Below are key excerpts from the book that I found particularly insightful:

1- “Three specific challenges in sustaining success are accentuated in enterprises that create value for customers primarily through services. The more labor-intensive the services, the greater the challenges of: operating effectively while growing rapidly, operating effectively when competing on price, retaining the initial entrepreneurial spirit of the younger, smaller company.”

2- “A set of core values permeates the high-performance service companies studied for this book. These values are remarkably consistent among the companies. The values of excellence, innovation, joy, teamwork, respect, integrity, and social profit underlie the ongoing success of the sample firms. Unchanging, these core ideals, principles. and philosophies define the very soul of these dynamic companies.”

3- “Values-driven leaders continually convey by their words and actions the meaning of success. They not only make palpable the dream (where we are going, why we are going there), they define the indicators of progress (how we know we are getting there). A key factor in sustaining success is combining a compelling dream that inspires commitment with a success definition that is reinforcing rather than contradicting.”

4- “A smaller group of companies has been able to sustain high levels of service performance and continue to improve. What they hold in common is a strong set of values that tap into employees’ own core values, and a strong set of leaders who teach model, and cultivate the values. Values-driven leadership sustains the high discretionary efforts of human beings to individually and collaboratively achieve and gives root to the eight other success drivers § discussed in the remainder of this book.”

5- “Brilliant strategy is insufficient to drive sustained success. The total product that customers experience from a company is its strategy executed. A poorly executed strategy openly invites competitors to imitate the strategy, execute better, and take away the business. Excellent service companies not only have focused strategies, but they also focus on execution. They continually raise their standards of service delivery and constantly strive for perceived superiority over competitors.”

6- “Control of destiny is largely attitudinal. If sufficiently determined. companies need not relinquish control of their future to other parties. If they do not allow the lure of growth to impede operational effectiveness, if they stay totally focused on creating superior  value for customers, if they continually strive to get better than they are— companies can control their future.”

7- “Trust-based customer relationships honor these friendship rules. Excellent service companies may not have a personal relationship with their customers, but they are effective in personalizing service transactions and counteracting the anonymity that customers so often experience with companies. Relationship companies look for ways to please their customers, to do something extra or special for them, just as friends would do for one another. As in friendships, relationship companies do not take advantage of customers. They respect, honor, and trust them. They value the relationship and invest time, effort, and money in strengthening it.”

8- “Customers can teach companies how they want to be served. Relationship companies that capture and use this knowledge make it more difficult for customers to leave the relationship.”

9- “The initial days and weeks of employment offer a wide-open window for learning about the company’s values, traditions, history, strategy, customers. competitors, policies, and procedures. Like actors on a stage, service providers need to know the play; to perform their role well, they need to know where their part fits in the overall performance.”

10- “How can service companies that depend on energized, resourceful. committed people to deliver value to customers reap the benefits of smallness when no longer small? The answer lies in a blend of values-driven leadership, innovative structure, customer- and employee-focused information technology, and ownership attitudes.”

11- “The sample companies are strategic in their generosity. They not only are extraordinarily generous, they are effectively generous. Rather than giving for the sake of giving, they invest with a plan in mind, with 1 long-term goal. Rather than spreading their resources thinly in numerous initiatives, they concentrate their resources to have a powerful impact and make a meaningful difference. Rather than investing time, energy, and money outside the mainstream of their business, they invest in concert with the business’s overall purpose and strategy. Thus, generous acts not only benefit society, they benefit the company too, seating a stronger company and enabling more generous acts in the future.”

12- “Values-Driven Leadership: Humane organizational values sustain human excellence. Stable leadership stabilizes values. Values-driven leadership propels all other success sustainers…Strategic Focus: Constancy of purpose leads customer value creation. Strategic focus inspires innovation…Executional Excellence: A well-executed strategy diminishes opportunity for competitors. Attracting great people is the first rule of execution…Control of Destiny: Pursue success on your own terms…Trust-Based Relationships: Sustaining service success requires trust…Investment in Employee Success: Investing in the performer contributes to the performance…Acting Small: In services, acting small is big. High touch and high tech are mutually supportive…Brand Cultivation: Branding the company means performing the service…Generosity: Generosity drives service success.”

 

Regards,

Omar Halabieh

Discovering The Soul Of Service

On Pieces for Profit

I recently read Pieces for Profit by David Yeghiaian. The author had provided me a copy of this book for review.

The main premise of the book is best summarized by the author in the introduction:”Based on the experiences, I developed an effective organizational model, tested across these industries, with consistent success. The model includes three elements – Strategy, People and Customers. While there are other books and research supporting each of these – Strategy, People and Customers – separately, I do not believe there are any portraying them together as a puzzle. This book provides you with a vision of how the three work interdependently to help you continuously improve by becoming more profitable and successful.”

The book is divided into three sections each covering one of the three elements, and how they each in turn support the others. Each chapter ends with a real-world example from the author’s experience to support and illustrates the concepts presented. Also a summary of the key points is provided at the end of each chapter.

Below are  key excerpts from the book that I found particularly insightful:

1- “Alignment of functional areas is a key outcome of strategic planning. Divisions lacking a shared view of the organization’s ultimate goals are more likely to take on their own agenda. Consider the word division: “di-vision.” The Latin prefix “di” literally means apart. So, unless you plan to prevent it, your divisions are “visions apart.” We will introduce a new term, intervision, to identify your distinct functional areas. To align the functional areas completely, think of your unique functional areas as “intervisions” or “visions together.” Your intervisions work cohesively sharing the same vision; with the strategy as the means and the objective as the end.”

2- “There are five characteristics for a main objective: 1. It should be grounded in the reality of your organization’s present situation. 2. It should facilitate creative tension. 3. It should be the result of integrated thinking of the team, rather than a collection of individual objectives. 4. It should represent all key stakeholders – employees, customers, investors, etc. 5. It should invite and inspire people to want to bring it to fruition.”

3- “So, the answer to which comes first – people or strategy – presents a third option; your people and your strategy interact in parallel. Determining employees’ needs and executing your strategy are both continuous review processes.”

4- “Allowing your steadiest suppliers access to your objective and alignment across your value chain is sensible for forecasting. The same is true with other partners that will be affected by your strategy. Your emotionally connected partners will appreciate knowing their role with the future of your organization.”

5- “Innovation as it is being presented here is ultimately a function of your overall strategy. For organizational growth, innovation must be considered as a goal of your strategy. Include innovation as one of the goals. This allows everyone in your company to recognize innovation as the invisible hand moving your organization towards improvement and growth.”

6- “The 4 R’s are: recruiting, retraining, rewarding and retention. Roles – the fifth R – is actually the first R as it must be completed before anything else.”

7- “AL2A (Ask, Listen, Learn & Act) is a newly created process that provides organizations with an opportunity to assess your people’s and customers’ current reality. It provides the bookends related to People and Customers that surround your overall strategy.”

8- “Follow the six-step process to achieve an effective customer strategy with brand and message positioning.   •  The six steps are: •  Assess the current situation •  Determine internal touchpoints •  Prioritize customers •  Evaluate research needs, objectives and budgets •  Conduct formal vs. informal research •  Develop action plan( s)”

9- “AL2A with customers consists of six steps. 1. Prioritize customers and determine customer-specific teams. 2. Establish attribute criteria. 3. Communicate and implement. 4. Develop and execute action plans. 5. Align the organization. 6. Unite with performance management.”

Regards,

Omar Halabieh

Pieces for Profit