Project management lessons from Jeff Bezos

Whatever you think of Amazon.com, founder and CEO Jeff Bezos can rightly claim to be have built – from scratch – an epoch-defining business. So what PM lessons can we glean from his letters to shareholders?

The cult of the tech entrepreneur is well entrenched in our cultural psyche. We all love to see pictures of the CEOs of trillion-dollar companies as youngsters in their start-up garages – if only to reassure ourselves that business transformation is possible.

Jeff Bezos is a particularly interesting example of the tech entrepreneur breed because unlike the founders of Apple and Microsoft, Bezos didn’t so much invent things as work out how to scale and sell them better. In essence, every new twist and turn of the Amazon story – from branching out of books, to launching Kindle, to becoming the world’s biggest provider of cloud services – has been an object lesson in project management.

So we dived into analyst firm CB Insights’s collection of wisdom from 22 years of Bezos’s letters to shareholders for PM lessons…

“Because of our emphasis on the long term, we may make decisions and weigh trade-offs differently than some companies.” (1997)

Bezos was warning his shareholder from the off that conventional metrics wouldn’t work for his vision. (In fact, Amazon has barely made any profit, ever, from selling goods online. It’s all about brand, cashflow and growth.) But in any project, there might be short-term compromises – or even seemingly bad decisions – that are necessary to deliver the long-term outcomes defined at the outset.

Inside a project, clarity of vision on the key benefits sponsors are looking to reap over the long term must always outweigh moment-to-moment impacts. This is particularly true in change projects, for example, where many people might not understand the long game and focus too heavily on localised disbenefits. In short, stay the course.

“Long-term thinking is both a requirement and an outcome of true ownership. Owners are different from tenants.” (2003)

A corollary of the first point is to have people properly invested in those long-term outcomes. At the APM Financial Services roundtable, the topic of project contractors came up. Many project leaders told us that budget limitations and the need for flexibility meant as many as 50% of the people working on projects were contractors (which is making it highly attractive to be one). But some warned that this ended up leaving their ‘bench’ of available project managers dangerously thin.

Others pointed out that even the most professional project contractor ultimately clocks out at the end of every day. They don’t have as much ‘skin in the game’, that sense of true ownership, that someone wedded to the organisation will have. Bezos used an analogy: friends who rented out their house to tenants who nailed their Christmas tree to the hardwood floors. “Expedient, I suppose,” wrote Bezos – but in a project context, it pays to guard against the long-term compromises ‘tenants’ will make just to get their bit of the project done without considering the state of your house afterwards.

“‘Working backwards’ from customer needs can be contrasted with a ‘skills-forward’ approach where existing skills and competencies are used to drive business opportunities.” (2008)

This should come as second nature to project leads. The organisation and key sponsors will scope a project; the PM function looks for the skills it will need to execute on the plan. It’s sponsors, then, who need to learn this lesson. Just because you have successfully executed projects using a given set of skills, doesn’t mean those are the only projects right for the organisation.

For project management leaders, the key is knowing how to draft in the new skills that will allow sponsors and other decision-makers to be as creative as they need to be. It also means that investment in strong networks (inside and between organisations, and internationally) and ways of re-skilling, training and development of project managers is critical. Cross-functional expertise and out-of-sector talent in project functions can open doors.

“Many of the problems we face have no textbook solutions, and so we – happily – invent new approaches.” (2011)

It’s not just skills. Amazon invests heavily in R&D ($23bn last year…) and while it’s unlikely your PMO has those kind of resources, it’s increasingly likely that the successful ones will be inventing new approaches to even traditional project management challenges.

This is particularly true of methodology. Like any great artist, a great project manager must learn the rigour and discipline of the various approach to project management and its different stages. Even agile is a well-defined methodology. But like those great artists, it’s from the creative deviations and combinations that inventive effectiveness emerging.

At the APM Corporate Partner Forum, for example, Graham Kerr’s workshop on selecting appropriate methodologies concluded that the only sensible approach is to go bespoke. Take some disciplines from one methodology, slot in others from a different ‘rulebook’ and find what works for the challenge you’re facing. Hybrid, tailored, ‘wagile’ – whatever you call it, be inventive.

“Some decisions are consequential and irreversible and must be made methodically, with great deliberation and consultation... But most decisions are changeable, reversible and should be made quickly by high judgment individuals or small groups.” (2017)

Bezos is typical of the modern tech leader in embracing fast failure, calling it the ‘inseparable twin’ of invention. But it’s his careful categorisation of decisions into buckets of different consequences that’s the real lesson for project managers.

The key, of course, is having very clear parameters and tolerances at every stage. Knowing what outcomes the project, and each stage of it, must deliver empowers people to take decisions at the lowest practical level – moving fast when they can. It’s essentially good risk management: if the downside is manageable, by definition you can move faster and try new things in pursuit of your well-defined goals.

“To achieve high standards yourself or as part of a team, you need to form and proactively communicate realistic beliefs about how hard something is going to be.” (2017)

It’s no longer fashionable to talk about ‘soft skills’ for project leaders. Communication, influence, motivation – these are accepted now has crucial skills on any team. And on project teams that are by definition creating something new, all the more so.

Project teams do need to be motivated. But they also need to feel respected – and a key part of that is sharing the challenges with them to manage expectations and encourage creative solutions. Most project managers know only too well the value of managing sponsor and stakeholder expectations – but gearing up the team for those bumps in the road is just as important.

ONE MORE LINK: Check out Jeff Bezos’s two-pizza rule for team or meeting size.

Want to be the Jeff Bezos of project management? You could start by checking out what it takes to be a Chartered Project Professional (ChPP).