Business News Business

Jeff Bezos steps down as Amazon CEO

Jeff Bezos leaves Amazon in arguably its best condition to date, however his successor Andy Jassy must prevent the company from becoming a victim of its own success

Article Thumbnail

Image Credit: Seattle City Council

Jeff Bezos: “Every day is day one.”

Most will be aware of Bezos’ “every day is day one” mantra. The simplicity of this philosophy is deceptive because it can apply to so many functions of Amazon’s sprawling business empire. It stems from years of his early childhood spent at his grandfather’s ranch in South Texas. Helping his grandfather Theodore John Jorgensen fix bulldozers, make needles and even build a house, Bezos cultivated his belief that every problem could be solved with enough thought and effort.

“Every day is day one” is embodied by Amazon’s four key operational principles outlined by Amazon’s UK country manager Doug Gurr: customer obsession, passion for invention, commitment to operational excellence and long-term thinking. These hark back to Bezos’ early days when he set up Amazon in 1994, with a used door for a desk and packaging books with his ex-wife Mackenzie Scott in their basement in New York. Though even Bezos could not have foreseen that his online bookstore would grow exponentially to become a company valued at $1.69 trillion in 2021. Yet the “day one” philosophy is so effective because of Bezos’ ability to work backwards from the future, to solve a problem today. He encourages his innovation teams to have a beginner’s enthusiasm, no matter how strong their expertise may be in a particular domain.

The most omnipresent example of Bezos’ attitude towards innovation is the Alexa smart speaker. Amazon had no right to have such success in the voice recognition market. Apple already had Siri and Google had sophisticated data on voice recognition. However, after the launch of Alexa in 2014, Bezos effectively became its product manager. There are now 10,000 people working in the division.

What will he do with all that money?

Bezos has been much maligned for his frugality relative to other billionaires such as Bill Gates. An Oxfam report found Bezos “could have personally paid each of Amazon’s 876,000 employees a one-off $105,000 bonus with the wealth he accumulated between March and August 2020 alone, and still be as wealthy as he was at the beginning of the pandemic.” It is no secret Amazon has hugely benefited from people’s confinement to their homes due to the Covid-19 pandemic. The firm reported on 2 February that quarterly sales had risen 44% and exceeded $100 billion. Bezos’ personal net worth has sky-rocketed; according to Forbes he is the richest person in the world, valued at $194.7 billion.

However, he has still not signed the “Giving pledge” (created by Bill Gates and Warren Buffet in 2010) which proposes billionaires commit at least half of their net worth to charity. Interestingly, his ex-wife Mackenzie Scott did sign the pledge after her divorce from Jeff Bezos in 2019; her net worth fell to $57.5 billion. Scott has become a prominent philanthropist, giving $5.8 billion to charities in 2020 alone.

Bezos has committed $10 billion to a climate change fund, after ensuring his internal scientists had used the right numbers to calculate the warming of the planet over the next 15 to 20 years. Though only 5.15% of his net worth, he has created the largest climate change fund in the world. He values professional journalism and acquired the Washington Post in 2014. He has also expressed an interest in CNN. A promising development is The Day One Fund which has made a two billion dollar commitment to fight homelessness and create new preschools in low-income communities in the US.

However, his real desire is to colonise space. Bezos argues space is the only alternative to life on earth (a finite resource) as it supplies humans with an infinite resource to exploit. That is why in 2019 he founded the space company Blue Origin, currently focused on sending astronauts back to the moon. More immediate benefits of the company may be new satellites in space, helping to connect the four billion people without internet access. He intends to build the infrastructure needed in space, a “Road to Space” for future innovators to build on.

Andy Jassy: a worthy successor?

As Bezos transitions to his new role as executive chairman this summer, his influence will undoubtedly remain behind the scenes in the early years of the Jassy era. Andy Jassy is no novice to the Amazon machine. He has been with the company for 23 years, most notably as CEO of the most profitable arm of the company, Amazon Web Services as of April 2016. In 2003, the ideas of Bezos and Jassy combined to create the cloud computing service, AWS. It now dominates the cloud market with a 30% share and provides data storage for the likes of McDonald’s and Netflix.

Jassy and Amazon are in danger of becoming victims of their own success, though. Some have called for AWS to become a standalone company that can reinvest its profits back into the lucrative business, rather than subsidise losses made in other parts of the business such as retail.

We may see a more civic-minded CEO with Jassy’s appointment. He has not been afraid to speak out on social issues such as the abhorrent shooting of Breonna Taylor by white police officers in a botched raid, tweeting “If you don’t hold police depts accountable for murdering black people, we will never have justice and change.”

The CEO transition has been so far so smooth though this should not surprise us. As the boss of cloud-computing company Box, Aaron Levie aptly puts it, “Amazon has the most codified culture of any big tech firm. It is built to outlast its founder.”

4667
Image Credit: JD Lasica

Latest in Business News