A long-term future focus is the one quality that distinguishes good leaders from great leaders. People expect their leaders set direction and have a focus on the future. However, the sad reality is that many leaders are too focused on the present and spend little time thinking about the future. One CEO who thinks and acts contrary to the short-term focus of his peers is Jeff Bezos, founder and CEO of Amazon.
Amazon’s First Shareholder Letter
Amazon went public in 1997 and even back then Jeff Bezos gave the investor community early indications of his long-term focus in Amazon’s 1997 shareholder letter (pdf), where he describes his long-term management philosophy and investment approach. The follow quotes from this letter serve to underscore Jeff’s long-term focus:
“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.”
“We will continue to make investment decisions in light of long-term market leadership considerations rather than short-term profitability considerations or short-term Wall Street reactions.”
“We will share our strategic thought processes with you when we make bold choices (to the extent competitive pressures allow), so that you may evaluate for yourselves whether we are making rational long-term leadership investments.”
The central message of the 1997 shareholder letter is that Amazon will realise it’s potential only if investors and leaders think and plan for the long term.
What is extraordinary about this particular shareholder letter was how different the philosophy and thinking of Jeff Bezos was in comparison to his peers at the time – and for many listed businesses today. Whilst most companies were obsessed with pleasing shareholders and generating short-term returns, Jeff Bezos emphasised his commitment to long-term investment and value creation. This must have been seen as a dumb strategy for an online book seller that faced low barriers to entry and an online marketplace characterised by intense competition. The talk in the media at the time was that Amazon would quickly run out of money and fail. So whilst the media and wall street pundits predicted Amazon’s demise Jeff Bezos remained steadfast and committed to the long-term.
Fast-forward almost two decades, today Amazon is one of the few internet startups of that era which remains today. Consider the trail of failed internet businesses of that time – AOL, Excite, Lycos, Netscape and many others.
“If everything you do needs to work on a three-year time horizon, then you’re competing against a lot of people, But if you’re willing to invest on a seven-year time horizon, you’re now competing against a fraction of those people, because very few companies are willing to do that. Just by lengthening the time horizon, you can engage in endeavours that you could never otherwise pursue. At Amazon we like things to work in five to seven years. We’re willing to plant seeds, let them grow—and we’re very stubborn. We say we’re stubborn on vision and flexible on details.” – Jeff Bezos, “Jeff Bezos Owns the Web in More Ways Than You Think“, Wired, 2011
The lesson: The success of Amazon provides an important lesson for all leaders on the importance of taking a long-term view.
Make Time to Think About the Future
One of the reasons for long-term success of Amazon is the commitment and dedication of Jeff Bezos to thinking about the future. A 1999 Wired profile “The Inner Bezos” discusses how Jeff Bezos deliberately sets aside time each week for thinking about the future and generating new ideas.
“Bezos spends hours at a time thinking about the future: trawling for ideas, exploring his own site, sometimes just surfing the Web, particularly on Mondays and Thursdays, which he tries to keep unscheduled. ‘I catch up on email, I wander around and talk to people, or I set up my own meetings – ones that are not part of the regular calendar.'” – Wired, “The Inner Bezos“
Taking time out to think about the future is especially important during times of increased uncertainty. Paradoxically the more uncertain the environment the more important it becomes to devote time to thinking about the future.
The best way to develop your future, long-term thinking skills is by setting aside regular time to think about the future. Block out time in your calendar weekly or monthly, devoted to thinking about and studying the future. Developing your future thinking skills demands you set aside time each week to research, study and reflect on the future. Use this time to collect information on the trends affecting your country, industry and organisation. Explore journals, magazines, books and conduct online research.
- How do you rate your future thinking skills?
- Does your future future thinking skills need improvement?
- What 3 actions are you going to take to strengthen your future thinking skills?
“If you have hope in the future you have power in the present.” – John Maxwell