Navigating Business Challenges: Lessons from Amazon's Leadership Shift

I thought it would be interesting to talk about. I noticed an article about Andy Jassy who came in and replaced Jeff Bezos at Amazon. And I didn't really realize what was going on at Amazon at the time that he came in. And I thought that there were. As I, as I kind of dug into all the things that he had done, I thought that it would be actually helpful for everybody. But particularly in this environment that we're in right now where a lot of people are telling us that they're experiencing challenges in their business in terms of revenue and profits and valuation and things like that, which are the three pillars of our scalable program. Hey everybody. Welcome to another episode of the Business Lunch podcast with your host, Ryan Deiss and myself, Roland Frazier. We are excited to be here with you today. Ryan, how are you doing today? We're just coming back as this is being recorded after the weekend of the fourth of July. Did you have a patriotic.

Yeah, I'm great. You what?

Did you have a patriotic hot dog and firework filled extravaganza? Man, no. Fireworks.

Fireworks freak me out. I one time had a friend of mine who we went out to a lake and, and another buddy of ours bought the, you know, the big mortars, like so not, not like the punk fireworks that you light and they go up, but like the ones that, that basically have their own launching mechanism. Yeah.

You see little balls go up in the area.

Yeah. So we got those and a buddy of mine who is normally a very smart, responsible person, we were putting those up and he put them all in upside down. And when you put those mortars in upside down. Well, number one, they don't go up, they go down, but down, you see is the ground. And, and so what happened when they exploded? It blew up like the cylinder thing that they were in and it was a multi stage and it blew up all the stuff around us. And so we're standing around these things while mortars or fireworks are going off at our, at our feet. Everybody was okay. But since then I've kind of stayed away from fireworks, so none for me. What about, what about you?

I didn't. The last time I did fireworks was at our buddy Frank Kern's place and he, he happened to find some, some fireworks in the garage that he didn't know about. And of course we may or may not have had a cocktail or two and decided that the prudent thing to do would be to light them off. But I can't confirm or deny where we were located. But it may or may not have been something that's permissible under the applicable local statute.

Well, there's no way in your neighborhood. I'm surprised you didn't get arrested.

Not in my neighborhood. Now I'm not. There's no. There's no. I. I absolutely will not confirm or deny what neighborhood it was taking place in.

But.

So we. We went.

We.

We did decide to go outside, which I thought was very, very responsive.

It's good. Step one.

Yeah. Yeah. So. So we. We set the thing up, but we were concerned about the possibility that if we set. It was a mortar thing, if we set this thing up and it threw stuff up in the air, it might come down in the surrounding area. And in the particular locale that we were located in, which I can't confirm or deny, it is generally possible that that could lead to a raging fire, which would be generally considered bad. Right. So. And possibly trace. Traceable back to the source somehow. So what we decided to do instead was we engineered a sideways launcher to fire the projectiles from a chair that we wedged the thing into and backed up with a plant or something and aimed it at the waterfall of the pool that he had. So we could just see multiple shots going across the pool in different colors. And it also didn't work out exactly like we. So I know you're thinking like, holy.

Crap, what could go wrong?

That's brilliant and socially responsible.

I'm surprised. Yeah. So much science was involved.

So.

No, we.

We. We had a chill. We used mostly water and not. Not fire. The. This fourth of July. Same weird.

In the pool. It's hot. Hot as crap. So it's hot.

It's really hot there. Right. I keep seeing. I don't. I mean, the news, I never believe it, but apparently it's. It's quite toasty where you are now.

I heard the same thing about where you are. So, yeah, the news is a bunch of, you know, doing what they do. I'll tell you what I am happy about, and then we can move off the weather topic, which I'm sure nobody cares about.

But these are. This is where the comments are. Like they talked about nothing for the first time. It's lunch, guys. We're talking about.

Yeah, it's freaking business lunch. Although your comment for this one, you're right. But there's that. That hurricane that's out in the Gulf of Mexico that I thought was going to just obliterate my beach house, it didn't.

It turned north.

And, you know, unfortunately, when my dad lives in the Houston area and it's hitting them right now. I was chatting with them. They're okay, you know, no flooding. But he said, we lost defense, we lost power. But I did something. The greatest gift I think I've ever given anyone. I got. I got my dad a generator for his house, and it has come in handy so many times because they just get really bad storms in the Houston.

Do you have one as well at your place?

So I don't. I don't, because I got one for my dad and holy crap, it was expensive. And then I found out what it was going to cost for my house because it's bigger, and I was like, you know, we're sort of done with hurricane season, all that, like, bad stuff. I'll do it next year. And then next year became another year and another year and another year, and thankfully, we haven't really had need for it since that happened. But I know I'm just tempting fate. So after this, ours comes on fairly frequently.

Living here in. In the blackout state.

Yeah.

Yeah, but cool. Well, let's. Let's. Let's move to some business Y topics since this is business lunch. Right. What do you think?

I was hoping we could just keep talking about the weather, but, yeah, you're probably right.

So I thought it would be interesting to talk about. I noticed an article about Andy Jassy, who came in and replaced Jeff Bezos at Amazon. And I didn't really realize what was going on at Amazon at the time that he came in. And I thought that there were. As I. As I kind of dug into all the things that he had done, I thought that it would be actually helpful for everybody, but particularly in this environment that we're in right now where a lot of people are telling us that they're experiencing challenges in their business in terms of revenue and profits and valuation and things like that, which are the three pillars of our scalable program. And so I thought it was really interesting. And one of the investors even said, and they quoted them as, I'd rather have Jassy than Bezos. And it was one of the top Amazon investors. So I thought that was really interesting. And I'm just looking to see. Let's see. It said the shareholders were not happy. This was when he came in. And he came in, I think around mid or into 21. And so this was at an investor meeting in 22 that said the shareholders are not happy. Amazon had just become the first company to shed $1 trillion in market value, which is amazing that you can do that and stay in business. And was on its way to a point, two points, excuse me, to a $2.7 billion annual loss. And so it talks about how he basically came in, he helped push the company's market cap above 2 trillion for the first time. And he's been there for three years. So it's kind of a short, like, I like it because it's a short amount of time that he's really been there. And he's had some pretty significant, you know, some pretty significant wins. So that's kind of where I wanted to start and talk about some of the things that he did and share that with you guys and maybe us riff on it a little bit. So I basically distilled it down into a list of the major things that he did, which I'm scrambling to pull up on my iPad. And the first one was. And it's simple, but it makes sense. It's the power of a fresh perspective. And so he introduced a renewed focus on profitability. You get these CEOs, like, you know, like Mark Zuckerberg saying, what was it? This is the year of efficiency and things like that. So he actually came in with kind of a theme. And so I think people rally around themes. So a return to profitability and operational efficiency is kind of interesting. And it was counter to what had been going on before, which was Bezos growth at all costs. Right. Which you can't fault him for. Look what he built. But, but I thought that was interesting. And so the stock price more than doubled. It's. It's gotten up above 2 trillion. And the action step, like thinking about the, you know, what, what could people do here. I was thinking basically coming up with a theme for how are we going to go forward? What's the thing that we're going to rally around and get, obviously buy in, but buy in from the employees, the investors, whoever the stakeholders in the business are, and then pick a specific target. Like we're going to increase employee engagement by this much, or leads by this, or revenue or profits or whatever, valuation, if you're dealing with that kind of thing. But I think having a KPI that you're going to hit around a new theme is kind of an interesting thing. Just because it's hard when you're being beaten down a little bit to just say, well, we're going to get better with no, you know, like, what are we going to do different? What are your thoughts on that?

Yeah, totally. You know, I love that it's something we've, we've done. Did a talk on this at a founders board meeting, I don't know, year and a half, two years ago now. But it's this idea of a keystone metric and it's one of the things that we're very clear on every single quarter. When we do our quarterly sprint planning, we're going to get clear on what are our North Star metrics like. So these are the metrics that we're going to really focus on for this quarter. And those metrics need to align to a particular theme or a rallying cry. And I always like it. Can the theme, a rallying cry, fit on a T shirt? And there have been some quarters where it's been particularly like, we need to get people particularly inspired. So we actually did print out, you know, T shirts that were, you know, for that thing. And it, you know, might have been like, you know, ring the bell or stack the cash. And it's almost always something around. Do we need to generate more top line sales, you know, or more bottom line profitability? Sometimes there's things around, you know, systemized to scale was one. But, but I do think that it's good to have a more subjective theme or rallying cry that, that people literally can remember. And if it's alliterative and if it fits on a T shirt, that's great. But if it doesn't connect back to a metric that people can measure, then it's probably not going to last. You know, it's just going to be like another, you know, entrepreneurial arts and craft eagle in flight poster. People want to know how they're winning.

How do we know we're winning? How do we know? Exactly. Yeah.

And so we've got the North Star metrics that are, that are kind of those leading metrics that we want to make sure that we impact. But then we'll also look at like, what's a. If we can. And it's not every quarter that we can come up with it, but like, what's a clear keystone metric? This one metric, if we get this one right, we believe it's going to prop up everything else. And sometimes that's actually a laggy metric. So it might be something like we want to change from quarter to quarter or year to year. Amazon's on a much longer cycle than most of the companies we run are. But yeah, it might be our keystone metric has been distributable profit. So not paper profit. Like how much actual cash would we be able to distribute? Do we actually pull from the operating account and move into a separate account for distribution and. Or Reinvestment, if we choose to do that. And so there have been times we've done that and we've said, hey, for this particular period, here's how everybody in the team is going to participate in this. But yes, I do think you need both the rallying cry, but you need the aligned metric at the same time.

Yeah, I like that. The next thing was embracing frugality. So obviously he said efficiency was one of his things. And there's a lot of, there's a lot of inefficiency in a lot of ways. The Japanese even have, I think it's called Murder or Mudra or something like that. Like they have all these different kinds of waste that they identify and, and they're very good at, you know, in those companies applying those management styles. And so his action was instituted cost cutting measures, including job cuts, and they eliminated the moonshots program. So they had a program kind of like Google did of, you know, here's the crazy ideas we're going to have. And there was quite a bit of money spent on those with no particular result. And I will say that when we, when we eliminate things like he's as Zuckerberg in a cost cutting mode, I don't think there's anything wrong with it. But I don't think cost cutting is the way to go for a long period of time. I think it's more of like a campaign of efficiency and. Right. Sizing our expenses and our development and, you know, our R and D, our labor costs and things like that. But that it's far better for companies to make money than it is to save money. And particularly when the costs that you're cutting are innovation and that, that can be very dangerous because then that gives your incumbents who are investing and thinking of new things an opportunity come in and steal market share from you. So you have to be careful. But, but the benefit here was it was that the moonshot thing and operational efficiency. And so in their last quarter, they got record quarterly profits of 15.3 billion, which was significantly up from, you know, from quarter over quarter, year over year. So I think that's, that's interesting. And we have a, I know that one of the things that we have is 63, I think it is profit maximizers, ways to get more efficient. And we talk about specific audits and things like that. So if you're in your business, are there audits that you could conduct on different costs, on suppliers, on prices, all of that kind of stuff, identify the expenses that really aren't necessary or Essential to make the company go, go to the suppliers and contractors and everybody that you're dealing with and renegotiate. Even if it's just payment terms, preferably it's rates as well. You know, a lot, there's a lot of those suppliers that will be willing to give you concessions to continue to have your business, particularly when times get tough, because they don't want to lose the business that you've got. And I think also look at our either zero based budgeting or our waterfall budgeting approach where we talk about that as well. And again, thinking about a target here, it would be what's the specific target? I think probably expense reduction is the easiest metric to kind of say, you know, we're going to reduce expenses by 5% or 10%, which would then correspondingly have a direct percentage increase of X in our profit margin. So that's, that's kind of the, the category there. What are your thoughts?

I think anybody can look smart if they go in and make a bunch of cuts for a quarter or maybe even a year, maybe two if you're talking about these big companies. But yeah, I mean, the guy came in and cut 27,000 jobs. He basically took Amazon prime, which was making the same kind of investment in blockbuster type movies that Netflix was making, and then some, and he cut a bunch of those projects. He's like, no, Amazon Prime Video needs to become actually independently profitable. And then, yeah, he went in and killed their innovation lab. I don't again, I think anybody can look smart. And I think that he's been rewarded in the short term. I worry it reminded me of a lot of things that have gone on at Apple, you know, where it's like, hey, let's go in and cut a lot of the innovation, increase profitability. And I think we're seeing the results right now at Apple. And you're seeing Apple start to lag behind the competition. I mean, their last big product launch is basically dead on arrival with the Vision Pro, Quest, Oculus, whatever the heck thing that nobody knows what it is anymore, they use for a week or two and now it's in a box you've talked about. That's where yours is. You see nothing about it. You know, now they're kind of doubling down on.

Mine is in the upsell case that I bought to keep it in, so.

Oh, there you go. Well, at least they got, you know, fully maximized the value of you. You know that they're, they're doubling down on AI finally. But it's basically just in Partnership with, you know, OpenAI for right now. It doesn't mean they won't develop their own. But you know, it seems like from an innovation perspective they've, it'd be hard to make the argument that they have not lagged from where they were before. So I would just look at Amazon and say, you know, is that a problem? And there's a couple ways to look at this. I think some businesses are defined by their ability to innovate. They're like an innovation first company. Some are not. You know, there's plenty of businesses that really are not about innovation. Yeah, they need to come out with new things, but it's not the core. It's not, it's not where the value of the business rests. I would argue that the value of the business that is Apple rests in their ability to innovate and come out with earth shattering, awesome products. For Amazon, less so, you know, for Amazon, their big promise is we want to save people money. It's not about having the newest, latest and greatest products. It's about having the everything store. So to me, this whole thing when I look at it, you know, talk about how embracing frugality. I think it's funny because if you know the history of Amazon, it's really re embracing frugality. Amazon was the place that popularized, you know, Jeff Bezos was really big about how like we don't have desks at Amazon. We go and buy a door because it already has a hole in it for the locking mechanism where you can put your cords down in. And we get some cinder blocks and you get a door and you get some cinder blocks and that's your desk. Because he wanted to be this vision of frugality. Well, what happened? The dude gets a divorce, he buys a super yacht, he starts dating supermodels, he starts, you know, spending all the money in the world. And of course his company began to be the embodiment of that. You also had Covid and so the great resignation. And so every companies are, you know, you've got this e commerce is to the moon. Everybody's hiring everybody. And so they're following in suit. So it seems to me this idea of embracing frugality, really it was just let's get Amazon back to what it was before Bezos had a midlife crisis. So is that, is it good leadership? Sure. Cause those are tough calls to make. I would worry though that he cut too deep. And so for your business direct application, when it's every business, from time to time, expenses are gonna go up and because most businesses, we know that we have to spend money, we have to make investments before the cash shows up. So typically your expenses are going to be a function of your future projected cash flow, your future projected sales and revenue. If those hit, then great. If they don't, then you need to go back and make some cuts. But where you should look to cut, ideally the place that you cut last is innovation. And the only place that I would cut more lasterly than that is marketing.

Yeah.

You know, and, and so cutting back all the frills and things like that.

Yep.

Thousand percent cutting back on jobs that you no longer need because the growth wasn't there. I get even cutting back on, you know, we want to have the next big breakout Game of Thrones type thing because we're just in a, you know, pissing contest with Netflix. I get, I don't get frankly cutting, killing completely. The grand challenge Moonshot Lab. I could see investing a little bit, but killing it completely, I don't know. That seems to send a message that Amazon's out of the innovation business.

Yeah. I think if you think about it, where do you want to innovate and what's the smart way to innovate? I think if you look at Amazon does have innovations. They had Kindle and they had the, the in house device whose name will remain unmentioned so that I don't have to talk to it. And you also had the AI that was very, very early on connected with that. You had innovation in that. They said, how can we turn our expenses into profits by converting our servers and things into what turned out to be one of the most profitable. I haven't looked at the most.

The one that Andy Jassy actually ran. That was where Andy Jassy came from was he ran aws, which makes sense.

Right. So they do have innovation. Prime was a huge innovation, I think, and another giant profit center for. So it's also the, the recommendation engine. I mean there's a lot. And so I agree with you and I would argue that, that they lost their way in what to focus innovation on because they're. When you spend almost a billion dollars on a series that's got, I think six episodes, that's a, that's a vanity project.

Yeah.

And I think that's another super.

Yeah.

Eliminating that. But the company, I don't think hopefully bought the super yacht, like company bought, you know.

Yeah. Metaphorically speaking, it's a business. Super yacht.

Yes, exactly. So, so I think that, here's the thing, I think that it's always wise to look at your expenses and think about them carefully. But if you are just cutting for cutting sake, looking at every single nook and cranny that you can get profit and you chop off what is effectively your investment in your future, that's a mistake. How do you identify what that is? That's going to be an independent exercise for each, each division. But I think looking at the people that you hired ahead of growth to handle the growth where growth didn't come, probably a good idea to trim that. The vanity projects that we all have, all of us, even if it's a subscription of some stupid thing that we're interested in that we put on the business, those are places that make sense. If you are also making a billion dollar, not good knockoff of a trilogy of movies that happen to be great, you know, then maybe don't do that too. But that's a very narrow set of people that we would be talking to there. But I think that's the, that's the thing is that you get, you get accountants and administrators and I would say that Jassy and Cook are that to Apple and Amazon disrespectfully, since I got them backwards, but that you also need the innovation. You need Eve's and Steve in there doing the inventive stuff and you need to be thinking about that. Now the exception would be, remember, you can always acquire innovation. And so just as Google acquired AdWords and we could go on and on and on with acquisitions, that is a kind of a guaranteed shortcut to innovation is buy those upstarts that are about to eat your lunch before they can. And when you're Amazon or Apple and actually even for you guys that have small, medium and upper medium sized businesses, you can acquire for that as well. So I think it's that balance. But clearly there's bloat in every company.

Yeah. And bloat tends to bloatify in the good times. You know, good times do not make us better. Good times make us fat, lazy and arrogant. And so sometimes what we need are times like these to force us to lean up and do the things that we know we need to be doing to succeed and to innovate again. I want to make one other quick point on the innovation front because I think that this is applicable to everybody who's, who's listening. I don't, I really hate the idea of an innovation lab. So when I said, you know, I think it's kind of foolish for, you know, Andy, Andy Jassy to, to shut down the Moonshot lab, their grand challenge thing. I actually don't necessarily disagree with the shutting down of, of that. What I, what I disagree with is just defunding innovation and R and D. But I think if you, I think it should be everybody's job in the company to innovate. And when you set up this separate skunk works, this separate innovation lab and you say, oh, innovation happens here, what you're essentially doing is giving permission to everybody in the company to, you don't have to innovate anymore. Just kind of status quo, maintain status quo. And I think this is such a problem for so many reasons, not the least of which is you want everybody thinking how do we get better? Because that's innovations are going to occur at the edges. Also you're removing the responsibility and I would argue what should be a mandate for innovation away from the people who are closest to customer and innovation should occur from the people who are actually connected to the customer. And when you take innovation away from the frontline people and you give it to a centralized lab and you just say, you know, here we're going to put all you guys, you people in a room full of whiteboards, go nuts. They don't talk to the customer, they're not hearing the problems and so they're coming up with ideas and that probably look and sound really good and smart on paper and they might even spreadsheet well, but they do not pass the customer test.

Yeah.

So definitely. And maybe this, maybe Andy Jassy, when he shut this whole thing down, he took most of that budget and distributed it as an R and D line item to the individual departments. If that's what he did, then great, two thumbs up. Not that he needs my approval, but I would make sure that you're doing that. You don't want to send a message that we're no longer innovating and you definitely don't want to send a message saying that innovation is not everybody's job. It's just these people over here.

Yeah, I think one of the ways that, that we have talked about before that that is really a good way to do that is that you, you do create a structure for innovation with the teams that you've got through masterminds of the people at the company, through focused, targeted things of, you know, when you have that theme of how can we increase efficiency by x percent than getting people on board in little, little mini teams, you know, to collaborate cross departmentally to do that, that's a formalization of the innovation process. Because otherwise it's just got to kind of percolate up or they hit the old good old suggestion box, be it physical or digital, and that, that's not going to be nearly as effective or efficient in producing consistent innovation. Whereas if you can just get your people talking, you know, especially cross departmentally, get sales and marketing talking to manufacturing and R and D and product, that's, that's going to make a big difference. When you've got people who are on the front line with the people who have the white lab coats and get them all together, that's probably going to be the best result. But it's got to be systematized. Right. If it's not, then it's just luck when it happens.

Yeah. Optimization, innovation. It's a ritual, not a task. And if you don't ritualize it, if you make it to where it's just this one off thing that, oh, look, we innovated like, no, no, that's not gonna work.

Yeah. So the third thing is the thing that I find probably most troubling and most indicative of what I think will be a challenge for Amazon a couple years from now, and that is it's framed positively as engaging with shareholders because Bezos had stepped away from all analyst meetings and, and Jassy basically actively engaged with the analysts in particular. And it was done to provide transparency and address the concerns that investors had, obviously about profitability because it was before, screw the profit, let's just grow. And about stock price, because they had shed a trillion dollars in value. So, you know, it makes sense that, that there was something that needed to be communicated and it did help because just the communication as we, you know, it's like anytime you're in trouble, the worst thing you can do is just go and put your head under the ground. Right? It's, you got to go out and address it head on, talk to the people who matter to help fix the things that are wrong with respect to stock price. You've got to communicate with the market makers and the analysts. And so stock price did come back, investor confidence came back and you know, that that was good for shareholders. What we can do to do that in our, you know, small medium, you know, or, or small, large businesses would be, how are we going to connect with our shareholders? The people that are, are the owners of the company. If it's just you and you're a founder, then, you know, maybe you need to go and have a retreat, you know, and meet with yourself. But definitely anyone that's a stakeholder, hopefully you've gotten an outside board which is I think step four of our seven step scalable plan. Get outside investor advisors that can help you. But if whoever those people are, dialogue with them, if you don't have people that you can talk to, then I think it makes sense to go find people who are smart business people who've been where you want to go and gone through what you're going through, who can help and be talked with. Just so you get out of your own head. If you are larger and have investors than having conversations with them so that they can feel good and there's not just this, you know, this blind trust that hopefully you're doing well, but they're looking at financial statements that are showing that their sales are down even if it's not your fault, even if that's just what's happening in all the businesses having conversations with them. I used to do workouts and turnarounds, believe me, you know, I'd go in and talk to all the debtors who hadn't been, I mean the creditors who hadn't been talked to in months. And, and just the conversation was hugely helpful in getting things back into the place that they should be. So I think doing that, having good clear financials, if you don't already have good accounting and good clear financials, both, you know, in the balance sheet and income statement, but also statement of cash flows, that's something that's going to be important. And then how can you balance from a money standpoint the financial performance that you need to have with the company with keeping your customers happy? Because another place that typically gets cut is customer support, customer success. Right. If you start cutting that out and stop talking to the customer so much because your team is overworked and understaffed, then that will ultimately create brand damage that, that might be hard to come back from a targeted goal. My suggestion or our suggestion for you guys is a 10% increase in the value of the company that would be in the stock price if you're public or if you're not in the valuation. And, and then you might also add to that so that you have the balancing metric, which is something we haven't really talked about. Balancing KPIs, that'd be a good topic for us sometime. But the balancing KPI here would be at the same time that we're getting this cost consciousness in place. How are we going to, and our valuation increase? How can we also increase customer satisfaction by x percent or to a level of say 90% or something like that? So the concern for me, and I'll shut up, is I think that he's moving to the short term game of pandering to the stocks, analysts and Wall street and that that historically creates damage in the long run to the business. Short term increase in stock price, longer term damage to business. What are your thoughts?

Yeah, this was. Out of all the things in the article, this is the one that gave me the most red flags as well. Yeah, Amazon was the company where Jeff Bezos said, we want to be the most customer centric company on earth. That is our mission. This is the company that at every single executive meeting, they left an empty chair that was there to represent the customer. This section and maybe so happened, it caused me to wonder, are they still doing that or has the customer shifted from being the actual customer to being the shareholder, the analyst? Because you see this happen a lot in public companies. They got where they are because they were customer centric and they did great stuff. But then at some point the CEO decides that the customer is not the customer. The customer is the shareholder, the customer is the analyst. And when that happens, you can count the days. I mean, you can start the countdown that that company is going to go into decline because they shifted from being customer centric to markets centric, which is. Which again makes you look really good and smart in the short term. And I would argue again, in this case may very well have been necessary. Like you said, they shed a trillion dollars worth of value. Probably time to have some conversation with some people, especially if it wasn't happening before. But if that was happening in lieu of the empty chair, then that is a significant cultural shift that I think would be a big, big, big problem. Again, maybe it was already happening. This is just one article that was talking about, but I agree. I'm with you. Um, you know, it was Trumpet is like, oh, this is such an amazingly great thing. It's like, yeah, I mean, so basically he pull most of his focus away from the customer and clearly innovation. And now it's just, let's pander to the shareholders and the analysts.

What are our short term profit? How can we drive short term profits?

How can we spend this so that they don't sell so they keep buying so that we don't get a hold order or something like that. You know, this whole thing, Jassis, there was this quote, jassis need to approve almost every major press release, blog posts and even company statements sent to reporters have irked some employees, according to people familiar with the matter. In some cases, these people claim that Jassy openly criticized the performance of individual employees several levels below him, an unusual level of engagement for the CEO of such a huge, sprawling company. Well, first of all, no, it isn't. CEOs are going to work in the.

In the macro, and they're going to.

Work in the micro. They're going to be at 30,000ft, and they're going to be at 3 inches, and that's where they live. So the specific critique of individual employees, especially if the work of that individual employee percolates up to them, cry me a freaking river. That's their job, too. If they linger there forever, then that's a problem.

But this idea, because I, because I know you're going to make another point that's different and good. But, but on that specifically, what, what, what I thought was, you're absolutely going to be a smart CEO, is going to be looking not just at direct reports, but throughout the whole of the organization. And if they see underperformance, they're going to be critical of it. Now, how it gets addressed and resolved ideally is through the chain of command. You're not, you're not jumping over your management team to go criticize the way the guy's delivering the mail. But, you know, that, that. I just wanted to point that out because it's unclear. Like, he might have said, you know, the people in the mail room need to get better. Right. Or he might have said, mary in the mail room isn't delivering the mail as fast as she should. I doubt that. But maybe. And if that was the case, then maybe that's probably, that's actually probably not a good way to go. What hopefully happened was, hey, I've identified that there are people down in the mailroom that aren't performing their job as efficiently as they could. And I've talked to Joanne, who is the head of operations, to talk to, to Bob, who's the head of communications, to talk to Joan, who's the head of the mail room, about that. Right. That's a big difference. So don't forget that chain of command. But definitely don't just abandon your awareness of what's going on and your desire to understand what everybody at every level is doing. Right, Right.

Yeah. And this idea that the CEO can't.

Criticize like a journalist.

Yeah, I think it's great. The, the bigger point, though, of, of him wanting to micromanage and approve every bit of communication that that is. But again, it's the communication that is going out to the media and to investors. So it's just that, like that, that makes me nervous. If, if, if we're doing a big product launch, you better believe I want to review all of the, all the marketing communications related to that because it's going to be customer facing. It's, it's big, it's high level stuff. I want to be involved there. And so I think as a CEO, where you choose to go micro, where you choose to go down to the three is going to say a lot and it's going to signal massively to the rest of the company what is the most important thing right now. And if you signal to the company that the single most important thing right now is that investors like us, then, then, then that is a, that's a very different thing than what Amazon has been about. And I think that's when you got to worry about what is the culture of this company. And I'll tell you, if you find in the season that you have to do that, then that's fine. But just acknowledge that. Say, hey, look, we are still all about the customer. We are still leaving the empty chair. We are still doing all these things. But for the next little bit, I got some cleanup to do on aisle three with the investors in the. So you're going to see me doing a lot of that over here. But just know I need all of you to double down and be even more focused on the customer. And once we get this done, I'm going to be right back there with you. It's important that you frame these things appropriately with your team. Andy Jassy is a far more intelligent and successful person than I am. I'm sure he did all of this, but just in case he didn't, it's worth, it's worth saying because certainly the article didn't make it clear.

I like it. Okay, so we try to keep these in the 30, 40 minute range and we're coming up on that right now. So I think what I'd like to do, because I believe there's a lot of good meat in this is I'd like to break it up into three episodes because I know how many things we have to talk about. I'm going to wrap this one. Just, I'm going to summarize real quick. And then, Ryan, if you want to give kind of parting thoughts, the three things we talked about here were the power of a fresh perspective. Jassy introduced the renewed focus on predict, on profitability and operational efficiency. We talked about maybe having a theme. We talked about that it was a giant benefit in helping the company recover its valuation of its stock price, which appears to be as focused, which we did also criticize a little bit constructively. Andy, if you're listening and, and having a specific targeted goal for that. The second thing we talked about was that embracing frugality and how the cost cutting measures, audits, job cuts, taking away some of the crazy things maybe that are quote unquote moonshots and focusing more on operational efficiency and maybe even innovation there. The danger of course being that you're not spending enough money investing in getting the tomorrow's products and services out there. But it did result in record profits of 15 billion for Amazon last quarter and picking a goal there, reducing operation operating expenses by some amount and increasing your gross profit margin within say a year or a quarter. The third one, engaging with shareholders. The good thing is you got to talk to your stakeholders, get buy in, keep them informed, be transparent. The bad thing, short term focus syndrome, where you're only focused on maximizing the stock price at the expense of the investments you should be making in tomorrow. What are the specific things that you can set as goals there X percent increase in shareholder value or the valuation of the company while at the same time a countervailing KPI that kind of is a check and balance like our customer satisfaction rating of 90% or higher. Those were the three things we covered here on this podcast. Any final like parting thoughts on that?

Ryan, just anytime you're reading these leadership profiles, just make sure that you're looking at it for both like the good and the bad and how it applies to, you know, that you're not getting the full story. I mean even from here we had slightly different perspectives and we don't even know what it is. So just, you know, these media companies, they're going to write articles and they want it to be the end all, be all. If you follow Andy Jassy's morning routine, you're going to be a billionaire. You know that's a five company as well. They're going to oversimplify stuff. So just make sure that you're reading it critically.

Yeah. And if you found this helpful, then.

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We always appreciate additional listeners and watchers and we will see you on the next episode, which will be part two of this, where we'll go through, we'll go through another few of these things. See you next time. Ever wondered how some people build real.

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