Jeff Bezos built a $200 Billion empire using his ruthless decision-making framework.
It's how he conquered retail, cloud computing, and space.
The 4-step decision-making process Jeff used to outsmart everyone:
It's how he conquered retail, cloud computing, and space.
The 4-step decision-making process Jeff used to outsmart everyone:
Watch this video where Jeff explains why most companies aren't great at decision-making:
1. Distinguish between one-way & two-way door decisions
Bezos categorizes decisions into two types:
• One-way door decisions: Irreversible or very costly to reverse
• Two-way door decisions: Easily reversible
He explained it on a whiteboard here 👇
Bezos categorizes decisions into two types:
• One-way door decisions: Irreversible or very costly to reverse
• Two-way door decisions: Easily reversible
He explained it on a whiteboard here 👇
One-way door decisions require careful deliberation since it's tough to reverse them.
They're the big choices that shape the future of your business.
Two-way door decisions can be made quickly, allowing for experimentation.
They're the big choices that shape the future of your business.
Two-way door decisions can be made quickly, allowing for experimentation.
2. Implement appropriate decision-making processes
Early on, the founder and exec team make all of the decisions.
But as a company grows, this must change, or else the company will stall & die.
Bezos warns against using a one-size-fits-all approach to decision-making.
Early on, the founder and exec team make all of the decisions.
But as a company grows, this must change, or else the company will stall & die.
Bezos warns against using a one-size-fits-all approach to decision-making.
For two-way door decisions, empower individuals or small teams to make quick decisions.
For one-way door decisions, elevate to senior executives, and be comprehensive in your analysis.
This approach balances speed and caution, optimizing for both agility and risk management.
For one-way door decisions, elevate to senior executives, and be comprehensive in your analysis.
This approach balances speed and caution, optimizing for both agility and risk management.
3. Embrace the "Disagree and Commit" principle
When team members disagree at Amazon, they voice their concerns.
After discussion, if no consensus is reached, the team commits to a decision.
Everyone supports the chosen direction, even if they initially disagree.
When team members disagree at Amazon, they voice their concerns.
After discussion, if no consensus is reached, the team commits to a decision.
Everyone supports the chosen direction, even if they initially disagree.
This reduces unnecessary arguments, increases decision-making velocity, and fosters team unity & trust.
This principle allows for diverse viewpoints while maintaining forward momentum.
Most decisions can & should be iterated upon down the road.
Move, learn & re-decide later.
This principle allows for diverse viewpoints while maintaining forward momentum.
Most decisions can & should be iterated upon down the road.
Move, learn & re-decide later.
4. Avoid compromise for the sake of agreement
Bezos warns against using compromise as a default resolution mechanism.
Why?
Compromise doesn't necessarily lead to truth or the best outcome.
And it can result in suboptimal solutions that don't fully address the problem.
Bezos warns against using compromise as a default resolution mechanism.
Why?
Compromise doesn't necessarily lead to truth or the best outcome.
And it can result in suboptimal solutions that don't fully address the problem.
Instead, Bezos advocates for:
• Seeking objective truth when possible (e.g., using data)
• Escalating decisions to a higher authority when needed
• Using "Disagree & Commit" for subjective matters
This approach prioritizes finding the best solution over reaching an agreement
• Seeking objective truth when possible (e.g., using data)
• Escalating decisions to a higher authority when needed
• Using "Disagree & Commit" for subjective matters
This approach prioritizes finding the best solution over reaching an agreement
Take a look at how many companies Jeff owns.
By applying Bezos' decision-making framework, you can drive better outcomes in your business and life.
The key is to recognize the type of decision you're facing and apply the appropriate level of analysis and speed to it.
By applying Bezos' decision-making framework, you can drive better outcomes in your business and life.
The key is to recognize the type of decision you're facing and apply the appropriate level of analysis and speed to it.
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Follow me @seanpk for more threads on entrepreneurship, investing and human performance.
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A bit about me:
20 years ago, I was a broke biomedical engineering college student trying to get my first biz off the ground.
Since then, I’ve grown six 7-figure businesses, three 8-figure businesses & raised $50M+ in VC. I'm also a General Partner at The Family Fund.
20 years ago, I was a broke biomedical engineering college student trying to get my first biz off the ground.
Since then, I’ve grown six 7-figure businesses, three 8-figure businesses & raised $50M+ in VC. I'm also a General Partner at The Family Fund.
And I do all of this while prioritizing my health, traveling for fun every month & not grinding 247.
I go deeper into everything I’ve learned about building businesses, investing & founder performance in my newsletter.
Join thousands of founders here: get.founderiv.com
I go deeper into everything I’ve learned about building businesses, investing & founder performance in my newsletter.
Join thousands of founders here: get.founderiv.com
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