Jeff Bezos: “Focus on the controllable inputs to your business instead of the outputs”

I think if you focus on the controllable inputs to your business instead of the outputs in the long term, you get better results. If somebody came up to me and said, jeff, I want your job to be to drive up the Amazon stock price and just manage that directly. Now, this might sound ridiculous to some of you, but many companies actually do this. They actually go out and they try to sell the stock that's kind of the final output. And it's much better to say, okay, let's not do that. That's not going to be sustainable. It's kind of a silly approach. What are the inputs to a higher stock price? And you say, okay, well, free cash flow and return on invested capital are inputs to a higher stock price. Okay, let's keep working backwards. What are the inputs to free cash flow? And you keep working backwards until you get to something that's controllable. And a controllable input for free cash flow would be something like lower cost structure. And you back up from there and you say, okay, well, if we can improve our picking efficiency in our fulfillment centers and reduce defects. Defects are very, very costly. Reducing defects at the root is one of the best ways to lower cost structure. That starts to be a job you would accept. If you're a reasonable person, you would say, I have no idea how to drive up the stock price. I can't manage that directly. It's not a controllable input. But I can make your picking algorithms more efficient and that will reduce cost structure and then follow that chain all along the way. That's what you do in all of these businesses.