Jeff Bezos has written a letter to his shareholders each year since the company’s inception. These letters outline Amazon’s long-term mission, culture and values. His 2017 letter, however, stood out more than the others for me. Bezos defined what he calls a Day 1 company vs a Day 2 company.
Day 1 companies are:
- Customer obsessed
- Embrace trends
- Make high velocity decisions
My translation for being a Day 1 company means always thinking like a startup, never being comfortable and content with anything you have at the moment. It means always looking ahead, never resting on what you have done in the past.
So, what does Day 2 look like? During an Amazon all-hands meeting in March 2017, he was asked this same question. His answer was “Day 2 is stasis, followed by irrelevance, followed by excruciating, painful decline, followed by death. And that’s why it’s always Day 1.”
Sounds pretty grim, right? He also notes that many larger companies can be Day 2 for a long time and not even know it until it’s too late. Decline isn’t always obvious—it can be subtle and stealthy for sure.
Yes, Amazon has 600,000 employees, and some may say it’s too hard to stay agile and nimble at that size of the company, hence Day 2 isn’t the end-all for them. But I disagree. It’s even more amazing that Bezos constantly drills this into his employees and culture.
So, the question is—where is our channel in this discussion? Are we Day 1 or Day 2?
“It’s always Day 1” is Amazon’s mantra, and that needs to be the direct selling channel as well. We need to resist complacency by continuing the vitality, curiosity and focus of a startup. I think we can all agree that Amazon is anything but complacent. They are at the forefront of almost every e-commerce and retail innovation and are never caught leading from behind.
So how do we as a channel keep the vitality of day 1 and fend off day 2? In his 2017 letter, Bezos gives his Starter Pack of Day 1 Defense.
- Stay agile by resisting proxies
A 2018 article from McKinsey & Company, The Five Trademarks of Agile Companies, says we are moving from an “organization as machine” model to a new business paradigm of “organization as organism.” The agile company is dawning as the new dominant organizational paradigm. Rather than the organization as machine, the agile organization is a living organism.
A machine is inflexible, unmoving, bureaucratic. A living organism is nimble and quick on its feet. It adapts to the environment quickly. If companies want to stay successful, they must act with agility and resist proxies.
Bezos says a common example is process as proxy. “Good process serves you so you can serve customers. But if you’re not watchful, the process can become the thing,” he says. “This can happen very easily in large organizations. The process becomes the proxy for the result you want. You stop looking at outcomes and just make sure you’re doing the process right.”
- Stay Customer Obsessed
- Customers are always beautifully, wonderfully dissatisfied, even when they report being happy and business is great.
- Even when they don’t yet know it, customers want something better, and your desire to delight customers will drive you to invent on their behalf.
- Double down when you see customer delight.
Are You Listening to Your Customers?
There is a goldmine of information on your own social media channels. Customers are telling you what they want and what they like and don’t like.
You may have your own brand fanatics: Super fans who know you inside out, love what you do, and even invest elements of their personal identity in your brand. Direct selling companies do a great job in recognizing our salesforce, but what can you do to delight, empower and learn from your customer super fans?
- Embrace External Trends
- The outside world can push you into Day 2 if you won’t or can’t embrace powerful trends quickly.
- Embrace them and you have a tailwind.
- Fight them and you’re fighting your future
As we have talked about over the past few months, the Gig economy has put a lot of pressure on our channel by making it easy to earn income.
Are We Making Direct Selling Harder Than It Should Be?
Have you looked at your back offices or compensation plans lately? We are a very complicated industry. We teach that it’s easy to earn—you purchase, you share, and make money. What if left out is the calculus needed for new distributors to figure out complicated compensation plans?
If I’m an Uber driver, I know exactly how much money I’m going to make. Plus, the company is going to feed me passenger leads until I call it quits for my shift. The model provides a high level of predictability and a clear path to the next dollar. At last year’s Fall DSA Conference, Darren Jensen, President & CEO of LifeVantage said his company is making tactical changes for customers and distributors and are focused on simplicity. “Business should be as easy as calling an UBER.” he said.
- Make High-Velocity Decisions
- Never use a one-size-fits-all decision-making process. Many decisions are reversible, two-way doors.
- Most decisions should be made with 70 percent of the information, if you wait for 90 percent you’re being slow
- If you don’t have consensus, disagree and commit to the decision
In Super Bowl XLIX, Seahawks coach Pete Carroll made one of the most controversial calls in football history. With 26 seconds remaining, and trailing by four at the Patriots’ one-yard line, he called for a pass instead of a hand off to his star running back Marshawn Lynch.
The pass was intercepted and the Seahawks lost. Critics called it the dumbest play in history. But was the call really that bad? Or did Carroll actually make a great move that was ruined by bad luck?
Pete Carroll was a victim of our tendency to equate the quality of a decision with the quality of its outcome, what poker players call “Resulting.” Even the best decision doesn’t yield the best outcome every time.
As executives you face difficult decisions that have to be made quickly. Go with the best intel you have at the time. Staying in Day 1 requires you to experiment patiently, and accept and learn from failures as they come and course correct as needed.
Direct Selling News is committed to helping you fend off Day 2 by talking about the topics needed to help your company keep the vitality of a Day 1 startup.