Bezos defends Amazon culture in letter to shareholders

It's a great place to fail! No, really, look at the Fire product line

Amazon CEO Jeff Bezos has defended criticism of his company's culture in a letter to shareholders.

Still reeling from a damning report in The New York Times last year, which revealed harsh internal evaluations and a culture of pressured over-working, Bezos fell back on the old canard of the company not being the right fit for some people.

"For better or for worse, [corporate cultures] are enduring, stable, hard to change. They can be a source of advantage or disadvantage. You can write down your corporate culture, but when you do so, you're discovering it, uncovering it – not creating it. It is created slowly over time by the people and by events – by the stories of past success and failure that become a deep part of the company lore."

OK...

"If it's a distinctive culture, it will fit certain people like a custom-made glove. The reason cultures are so stable in time is because people self-select. Someone energized by competitive zeal may select and be happy in one culture, while someone who loves to pioneer and invent may choose another. The world, thankfully, is full of many high-performing, highly distinctive corporate cultures."

It's not clear which culture Bezos believes Amazon has: competitive or innovative, but the 100 employees that The New York Times spoke to would likely chose "abusive."

"Nearly every person I worked with I saw cry at their desk," recalled former marketing exec Bo Olson. "You walk out of a conference room and you'll see a grown man covering his face."

A harsh evaluation regime pushed out others. Employees were expected to work 80 hours a week (the equivalent of an 8:00am to midnight work day) and were sent emails in the early hours of the morning to which they were expected to respond.

Despite claiming in his letter that the corporate culture was a product of many people, Bezos said at a conference prior to the Times article that his "main job" was "helping to maintain the culture."

And part of his management philosophy was that "harmony is often overvalued in the workplace" and that it can "stifle honest critique and encourage polite praise for flawed ideas." Instead, employees are told to "disagree and commit," resulting in a culture of tearing into people's ideas.

Nice

In Amazon's response to the article last year, former White House spokesman Jay Carney reflected that culture when he provided personal details about some of the most critical former employers in an effort to undermine their credibility.

Bezos' main argument for creating such a bruising culture lies in what he claims is the company's willingness to take risk.

"One area where I think we are especially distinctive is failure. I believe we are the best place in the world to fail (we have plenty of practice!), and failure and invention are inseparable twins."

He added: "Most large organizations embrace the idea of invention, but are not willing to suffer the string of failed experiments necessary to get there."

While there's no doubt that Amazon is a successful company in terms of revenue and profit, it had in large part succeeded by pressuring others to sell their goods at a lower price, bringing in more customers to Amazon's marketplace and further strengthening its hold on the market.

Fail

When it comes to innovation and producing its own products, however, Amazon has consistently failed.

Its Fire product line, for example, has done notoriously poorly. The company ditched its attempt at a smartphone. Its streaming TV is severely lagging in the market. And its tablets remain far behind competitors despite their lower prices and bundles of free content.

Amazon's two successes have been the Kindle e-book reader and the more recent Alexa voice-recognition technology, but the company has been guilty of trying to build far too quickly and heavily on both. Reviews of the new products developed from the (excellent) Amazon Echo have been underwhelming.

In short, if your company makes money by pressuring and screwing others, an Amazon culture is going to work. But if your job is to create new and innovative products, the unfortunate reality is that it takes people working together and getting on with one another to really produce something original.

Bezos, of course, would disagree. ®

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