A major critique of American-style capitalism is our manic focus on achieving short-term results for Wall Street analysts at the expense of long-term competitiveness and customer experience. While the logic of mortgaging off tomorrow’s viability for the sake of a short-term pay out seems self-evident, the fact is short-termism is the norm, not the exception, in corporate America today.
As we know, Amazon is an exception to that rule. Here’s what Jeff Bezos had to say in his latest letter to Amazon shareowners:
To our shareowners:
As regular readers of this letter will know, our energy at Amazon comes from the desire to impress customers rather than the zeal to best competitors. We don’t take a view on which of these approaches is more likely to maximize business success. There are pros and cons to both and many examples of highly successful competitor-focused companies. We do work to pay attention to competitors and be inspired by them, but it is a fact that the customer-centric way is at this point a defining element of our culture.
One advantage – perhaps a somewhat subtle one – of a customer-driven focus is that it aids a certain type of proactivity. When we’re at our best, we don’t wait for external pressures. We are internally driven to improve our services, adding benefits and features, before we have to. We lower prices and increase value for customers before we have to. We invent before we have to. These investments are motivated by customer focus rather than by reaction to competition. We think this approach earns more trust with customers and drives rapid improvements in customer experience – importantly – even in those areas where we are already the leader.
Jeff Bezos built a culture at Amazon that rewards building customer experience more than any fleeting increase in stock price on a quarter-by-quarter basis. His mentality– that if you anticipate customer needs, invest in quality, and deliver the best customer experience in the business that financial results will follow– is a ethos more American businesses should aspire to. Building a business around customer experience requires vision and courage, but the proof is in the pudding for long-term investors in Amazon and other companies that choose to view customer experience, product innovation, and customer loyalty as long-term profit centers instead of short-term cost drivers.
Here’s to hoping more businesses recognize the secret ingredient to Amazon’s success and hop on the bandwagon.