Thursday, April 20, 2017

How the creator of Amazon makes decisions

"Most decisions should probably be made with somewhere around 70% of the information you wish you had," Amazon CEO Jeff Bezos says. "If you wait for 90%, in most cases, you're probably being slow."

Julie Bort writes that he runs Amazon like a startup, which means faster decisions.
"You have to somehow make high-quality, high-velocity decisions," Bezos wrote. "Easy for start-ups and very challenging for large organizations." 
He outlined a few steps for that: 
1. Learn to work with just enough data, aiming for most of what you need (70%) instead of gunning for near certainty (90%). 
2. Get comfortable with uncertainty by staying flexible after the decision is made. "Many decisions are reversible, two-way doors," he said. For those decisions that can be easily undone, use "a light-weight process." He wrote that you can tell if it's a lightweight decision by answering the question "So what if you're wrong?" 
3. Instead of focusing on avoiding mistakes by making perfect decisions, become a master of "quickly recognizing and correcting bad decisions. If you're good at course correcting, being wrong may be less costly than you think, whereas being slow is going to be expensive for sure." 
4. Finally, for the biggies — those decisions that are not reversible or that have a big effect on customers, employees, or partners — turn the idea of buy-in/approval on its head. Go with "disagree and commit." 
"If you have conviction on a particular direction even though there's no consensus, it's helpful to say, 'Look, I know we disagree on this but will you gamble with me on it? Disagree and commit?'" Bezos said.
Sounds kinda like Donald Trump.

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