Jeff Bezos is “someone who is constantly looking at the long term, says journalist Brad Stone, the author of the upcoming book The Everything Store: Jeff Bezos and the Age of Amazon. “Unlike the typical financial investor, moreover, Jeff Bezos really is focused on the long term,” writes Henry Blodget on the Business Insider.
Stone and Blodget aren’t alone. After the news broke last week that Bezos bought the Washington Post for $250 million, everyone, from the commentators to reporters seemed to share the notion that Jeff Bezos is a long-term guy.
But is it true? Does Jeff Bezos really have a long-term view? I decided to look at it through Amazon’s record on sustainability – after all, in business, adopting a sustainable approach and long-term thinking go hand-in-hand, and usually you can’t have the one without the other.
But Jeff Bezos seems to think he can.
First, let’s be clear. Jeff Bezos definitely believes in a long-term thinking. You can see it for example in his letters to Amazon’s shareholders. In 1997 he famously wrote them, “We believe that a fundamental measure of our success will be the shareholder value we create over the long term…Because of our emphasis on the long term, we may make decisions and weigh tradeoffs differently than some companies.” In his 2012 letter Bezos wrote: “I think long-term thinking squares the circle. Proactively delighting customers earns trust, which earns more business from those customers, even in new business arenas. Take a long-term view, and the interests of customers and shareholders align.”
This focus on the long-term and commitment to customers, reflected in his letters over the years, also came up in an interview on HBR IdeaCast earlier this year when Bezos explained that “if you’re long-term oriented, customer interests and shareholder interests are aligned. In the short term, that’s not always correct.” He also added that “when things get complicated, we simplify by saying what’s best for the customer? And then we take it as an article of faith if we do that, it’ll work out the long term.”
Listening to this interview, I couldn’t help but see the resemblance to another CEO, Paul Polman of Unilever. Polman also doesn’t think he should be focusing on maximizing profits for shareholders in the short-term and believes that if he does what best for his customers it will result in good shareholder return. “We are not out there just to make money, but to satisfy consumer needs and doing it well, we will make money,” he said last year.
As you can see, both Bezos and Polman see the importance of putting customers first and how this approach creates long-term shareholder value. Still, each of them puts this perspective into practice differently.
Polman has a wider perspective, looking not only at his customers but at society as a whole, including the environment. As he told Kai Ryssdal in an interview last June, “You cannot have a successful, healthy business model if you don’t also create a healthy environment. Business has a very hard time succeeding in societies that fail.”
Bezos on the other hand takes a more narrow approach focusing only on customers, leaving other stakeholders out of the picture. This is quite evident from Amazon’s record on both social and environmental issues. Amazon only takes action on issues that directly concern or interest its customers.
For example, the New York Times reported in 2010 that “for nearly two years, Amazon has been trying to get manufacturers to adopt “frustration-free packaging” that gets rid of plastic cases and air-bubble wrap — major irritants for consumers” after hearing complaints from many customers about these packages. Another example was the development of Vine.com, the online one-stop shop for green consumers.
Yet, when Amazon doesn’t feel its customers have direct interest in something it usually tends to ignore it. As a result, the virtual book vendor is lagging behind in almost every possible sustainable issue. Examples? Here we go: Amazon neither reports to the CDP nor releases a sustainability report. Greenpeace gave Amazon its worst grades – three “F” and one “D” – in the ‘How Green is Your Cloud’ report, on the latest Electronics TakeBack Coalition’s report card, grading retailers on their electronic recycling programs Amazon received an “F,” and on ForestEthics’ 2010 report card looking at paper practices the online retailer got an “F+.” The list goes on and on.
Add to its concerning environmental records the allegations about the working conditions in Amazon’s warehouses in the U.S. and the UK, the release of the price comparison app (aka the evil app) last December that hurt a lot of businesses, or Amazon’s general inaction in issues related to sustainability and you start getting the picture – Amazon, which means Bezos, doesn’t think sustainability is an important factor for the company’s long-term success.
So is Bezos a long-term guy? It depends. When Paul Polman looks at long-term strategy as competitive advantage, he sees a value-creation model, “which is equitable, which is shared, which is sustainable.” When Bezos thinks long-term as a competitive advantage he thinks of it only in terms of outcompeting companies that think short-term – “by lengthening the time horizon, you can engage in endeavors that you could never otherwise pursue,” he told Steven Levy in an interview for Wired in 2011.
I don’t think this sort of narrow perception of the long-view can be considered a truly long-view thinking, not in a world where ignoring sustainability issues becomes less and less of an option, but I’m sure others would disagree.
What’s your take on Bezos? Share your thoughts in the comments.
Raz Godelnik is the co-founder of Eco-Libris and an adjunct faculty at the University of Delaware’s Business School, CUNY SPS and Parsons The New School for Design, teaching courses in green business, sustainable design and new product development. You can follow Raz on Twitter.