Day 1: Applying Amazon Leadership Principles to Your Small Business

Amazon has designed Amazon Mom, a program that promises to save moms money. Photo © Getty Images

Annoyance or Opportunity?

In case you haven’t heard about Amazon’s Day 1 and its 14 leadership principles, they just might be worth exploring for your small business. They are useful tools for a new enterprise to keep in mind as it grows, and even more so for a mature company that has experienced success, or which gradually finds itself stagnating over time. Many businesses experience a life cycle of growth and then decline. A Day 1 mentality is critical to avoiding the erosion of sales and profitability that so commonly afflicts companies over the years, small and large alike.

Take the case of a pizza parlor. The owner has created a menu of items that are loved by customers. Buoyed by that success, she works at creating procurement and production processes that help reduce costs so the business will be more profitable. But how should the owner respond if customers increasingly ask for different toppings or different crust options than what is offered by the shop? No matter what business is being considered, if you look at emerging customer requests as an annoyance rather than an opportunity, you just might have passed into the danger zone known as Day 2.

Day 1 to Day 2: Stasis, Irrelevance, Painful Decline, Followed by Death

For Amazon founder Jeff Bezos, it is always Day 1 at Amazon. To be certain, Day 1 is not a new approach. He has been talking about Day 1 since 1997. By Day 1, he is referring to maintaining the entrepreneurial zeal and relentless customer focus of a startup company, even as Amazon finds itself in its third decade of operation. Such an approach helps the company keep the customer in its crosshairs.

Day 2, on the other hand, speaks to companies that make assumptions about what customers want based on past success. As such, they are in danger of becoming disconnected from them. Even for small businesses, taking your eye off of the customer to focus on improving processes and cutting costs, for example, can be a costly mistake.

As Bezos outlined in his 2016 Letter to Shareholders, Day 2 is not a good place for a business to be. “Day 2 is stasis,” he wrote. “Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1."

Amazon’s 14 Leadership Principles

Essential to Amazon’s quest to keep in Day 1 is its list of 14 leadership principles, which according to Amazon, its employees use every day in their work. While some of them seem more geared towards leaders in large corporations, here are three of them worthy of consideration for a small business operator.

Learn and Be Curious. Maintaining a healthy level of curiosity is critical for keeping up with changing customer preferences and other external opportunities. Business operators can learn from customers, vendors, employees, and delivery drivers alike. They can also keep an eye on larger trends through participation in local business groups, relevant trade associations, or subscribing to industry publications.

Are Right, a Lot. What Bezos means by this is that leaders are experienced and knowledgeable. They have put in the work and should have confidence that they will make astute business decisions for the most part, based on current information, such as knowledge garnered from being curious.

Bias for Action. By maintaining an active curiosity, and with the confidence of experience and business knowledge, operators can move confidently to take advantage of new opportunities. One of the critical advantages of small businesses is that they can be nimble and institute changes much more quickly than larger companies, making moves to delight customers while building loyalty in the process.

It is important to remember that the 14 leadership principles are all linked. They all support making good on the primary principle of customer obsession and keeping the company in Day 1 mode. If you feel like your business is getting stale, or if you or your staff start looking at customer requests as inconveniences rather than opportunities, it might be worth your while to take a closer look at the 14 leadership principles and put some of them to work.