Some companies, like Apple, Nike, and Disney, are well-liked by their customers. Other companies, like Wal-Mart, Microsoft, and Goldman Sachs, tend to be feared.
This is the view of Amazon.com (NASDAQ: AMZN ) CEO Jeff Bezos, as laid out in an internal memo titled Amazon.love. The memo is discussed in detail in The Everything Store, the outstanding new book about Bezos and Amazon by Brad Stone. Stone describes the memo as laying out a vision for "how the Amazon founder wants his company to conduct itself and be perceived by the world."
In order to develop a strategy for this vision, Bezos actually made a list of cool and uncool attributes of companies, which is included in the memo. Here are some of them:
- Rudeness is not cool.
- Young is cool.
- Winning is cool.
- Defeating tiny guys is not cool.
- Explorers are cool.
- Conquerors are not cool.
According to Stone, Bezos believes that being seen as "an explorer rather than a conqueror, was critically important." In the memo, Bezos writes, "It is not enough to be inventive – that pioneering spirit must also come across and be perceivable by the customer base." Bezos concluded the Amazon.love memo by proposing to "assign a more thorough analysis of this topic to a thoughtful VP."
How should investors view Bezos' attempt to improve the world's perception of Amazon?
If you have to ask...
First of all, it's probably not an attribute of cool companies to put together an exhaustive analysis of what is required for being cool. And Jeff Bezos, who remains a devoted Star Trek fan, might not be an expert on this particular subject. As a Civil War buff myself, I'm not exactly casting stones here, however.
All kidding aside, I wonder if studying the attributes of cool companies is the wrong way to approach this problem. Amazon has obviously received a lot of criticism over the years for its treatment of partners, competitors, and state and local governments. Rather than worrying about perception, it might make sense to devote more attention to better understanding this criticism.
Amazon might even discover that focusing overwhelmingly on the well-being of the customer ends up hurting its reputation with other stakeholders. Is the price of that reputational harm too high over the long term? So far, it doesn't appear to be. That could change, however.
Amazon's leadership team would be wise to study Stone's book, in my opinion. We know, of course, that Bezos's wife, Mackenzie Bezos, has read it. Despite her negative review, I think there's a lot of material here for the firm to consider.
Stone is quite fair in discussing the various instances where Amazon didn't treat its competitors or partners particularly well. For example, Stone makes a persuasive case that Amazon was too ruthless in its acquisition of Quidsi, which operates Diapers.com, among several other websites. The Federal Trade Commission actually examined the deal, which raised a number of red flags, for four and half months, according to Stone. The deal was approved in the end.
There are numerous other examples of aggressive competition and questionable practices throughout Stone's book. The discussion of Amazon's treatment of publishers and book stores is particularly troubling, even if everyone is already familiar with the broad outlines of the story.
Digital books have completely disrupted the publishing industry, and that huge trend has naturally resulted in winners and losers. After reading Stone's account, it feels like Amazon's overwhelming victory resembled that of Rome over Carthage in the second century BC. Did Rome really need to put salt in Carthage's fields?
So, what will Amazon need to do to become cool? I have no idea. As a shareholder of Amazon, I don't really care if the company is cool or not. I would love to see it not approach all of its business dealings as a zero-sum game, however, even if that means its customers need to pay a bit more for their products. Who knows, maybe treating all stakeholders fairly is cool.
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