In the early 1990s, Jeff Bezos noticed something strange.
He was nearing 30, and it was at the dawn of the internet revolution. The web was nowhere near what it is today, but the thing that caught Bezos’ attention was that usage was picking up at a rate of 2,300% a year.
Not wanting to miss out, he quickly made a list of 20 possible products to sell online, and eventually settled on shipping books because of their low cost and universal demand.
Amazon may have had humble beginnings, but today, that bookstore is something far more. Since their day of incorporation in 1994, they have gone on to dominate not just retail, but other industries besides.
On the surface, a few things stand out about how Bezos approached the growth of his company. He maintained a true customer obsession from the start, he never got complacent in spite of their performance, and he sacrificed short-term vanity metrics for the endgame.
As we dig a little deeper, however, it’s clear that there are certain details in his execution that made the surface-level advantages possible. Every company wants to take that approach, but not all of them have the foundational decision-making framework in place to do so.
Amazon may be an enormous corporation, but their core tools are simple and quite usable. Here is what we can steal.
The problem is that we intuitively judge the importance of our decisions based not on impact, but on random timing. Even if something is relatively unimportant, and even if it can wait, we feel the need to attend to it because of the surrounding circumstances.
As Jeff Bezos explained to Amazon shareholders in his 2015 letter, there are two categories of decisions. Type 1 are the mission-critical, high-impact choices that influence the larger strategy, while Type 2 are the lower stakes choices that can easily be reversed if need be.
At Amazon, by distinguishing between impact, they leave all Type 2 decisions to the teams and individuals on the ground, while the people higher up focus on Type 1 decisions.
Given that most large companies have a very fuzzy distinction between the two, they fall into the trap of immediacy and their ability to direct resources to the truly important things suffers.
It’s a simple but effective system for choosing to leverage attention to where it’s best used, because even in our own lives, it’s easy to confuse what’s important with what’s present.
Most of your time should always be spent on Type 1 decisions. Type 2 decisions should either be delegated, or they should be batched together with other less critical choices for later.
Decisions shape every part of our life, and the quality of our decisions determine where we end up. Having decision frameworks can help us combat any potential blind spots.
Amazon is one of the most successful corporations of our day. They have many things going for them, but the key determinant of their success is arguably their decision-making process.
It’s easy to neglect the idea of having a framework in place to make choices. It’s something we have an intuitive process for, but it’s useful to remember that our intuition has known gaps.