The year Jeff Bezos founded Amazon, Barnes and Noble was the nation’s dominant bookseller, opening new stores on a frequent basis.
Amazon set its sights on becoming the world’s largest bookseller via a new e-commerce model — and thirteen years later, Jeff Bezos is reported to be worth $100 billion.
Bezos was able to turn Amazon into a roaring success because he created an organization with strong company values — here are some of the approaches he took to become a success and help Amazon dominate the retail industry.
1. He puts customers at the center.
During an interview with 60 Minutes, Jeff Bezos was asked why he was willing to sacrifice company profits, and by extension shareholder satisfaction, in order to focus on making Amazon increasingly customer-centric.
He said, “In the long run, if you take care of customers, that is taking care of shareholders.”
Unlike most organizations, Amazon ignored cries from investors to become profitable right away, and instead invested in customer-centric improvements that helped the company become one of the most valuable on the planet in the long run.
In 2014 for example, Amazon’s shares took a 10 percent hit after an earnings report showed the company was not profitable. But rather than listen to naysayers, Amazon instead invested more money in building additional fulfillment centers that would allow for faster delivery.
Since 2014, Amazon’s stock has increased roughly 285 percent.
2. He puts a focus on innovation.
How many ecommerce websites invest millions of dollars into a secretive skunkworks organization designed to develop moonshot projects?
The answer is not many. But Amazon developed Lab126 to do exactly that. Lab126 has developed a number of category defining products. From the Kindle to the Echo, the ecommerce giant uses innovation to improve customer experience and to break into new markets.
Amazon Web Services (AWS) is another example of Amazon’s intense focus on innovation. AWS provides the backbone for over 100,000 companies and government agencies including Netflix and the CIA.
Soon, Amazon will roll out another innovation designed to improve customer experience while lowering costs: Drone delivery. Autonomous Octocopters are expected to launch as soon as 2019. Customers will be able to receive a delivery for items up to 5 pounds — which constitutes 86 percent of Amazon’s items — in 30 minutes.
3. He hires rigorously
Bezos is a believer in technological innovation, and as a result, he encourages his company to hire only the best and most creative minds.
Amazon’s hiring process is notoriously rigorous. This ensures that each new employee is capable of advancing the company’s mission of developing disruptive products and services that improve customer experience.
As Mr. Bezos wrote in his 1998 letter to shareholders, “Setting the bar high in our approach to hiring has been, and will be, the single most important element of Amazon.com’scess.”
4. He spends money on the right things.
During a 1999 interview, Bob Simon questioned Jeff Bezos about his desk. It was a door with four rickety wooden legs bolted and taped together. Bezos responded that the desk “[was] a symbol of spending money on things that matter to customers and not spending money on things that don’t.”
Cost reduction remains an important component of Amazon’s company culture. In fact, employees who are able to identify areas of major savings are awarded the “Door Desk Award,” which is given in recognition of innovative cost savings that will allow Amazon to offer customers more competitive prices as a result.
5. He has an unyielding work ethic.
Jeff Bezos understands that Amazon is fighting an existential battle each and every day. In an interview previously cited he said, “companies have short lifespans and Amazon will be disrupted someday.”
Bezos has created a company that prizes work ethic. In fact, the company culture has received mixed reviews because of how hard many employees are asked to work. For some workers, expectations were unreasonable, for others, the high-pressure environment encouraged them to do their best.
By developing a company culture that prizes innovative minds who are willing to work long hours to tackle challenging problems, Amazon is more capable of fending off disruption by competitors. It’s a company culture that prizes intelligence, customer satisfaction, and hard work. This has propelled Amazon to become a goliath in the mere twenty-three years since it was founded in a modest ranch home in 1994.
This article originally appeared on BusinessInsider.com.
