Featured Image Credit: Alex Wong/Getty Images
Topics: Jeff Bezos, Amazon
Ellie Kemp
People have all pointed out the same issue with a model Jeff Bezos uses for making major business decisions.
The billionaire founded Amazon back in 1994 and it's now the largest online retailer in the world, racking up a projected $448.6 billion in annual web sales last year.
From its humble-ish beginnings as a mail-order book shop, Amazon is now a household name and while projects like Amazon Prime Video and Amazon Fresh have taken off, others have simply flopped, costing large amounts of money.
Of course, there's no avoiding risk when it comes to running a business.
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But it makes sense to have processes in place which help evaluate - and in some cases damage control - these decisions.
And if you're Jeff Bezos, you categorize two 'basic' kinds of decisions as either 'one door' or 'two door.'
A flow-chart explaining the process recently resurfaced on Reddit.
Essentially, one-door decisions are almost impossible to reverse - like selling your company, or quitting a job. There's no going back, so these decisions should be made with great care and deliberation - hence dubbed 'one door.'
Two-doors, on the other hand, are easy to reverse - like offering out a new service, or introducing a new subscription model.
These sorts of decisions can be made and executed quickly, then reviewed and pivoted as needed.
And as Bezos explained in a letter to shareholders: "As organizations get larger, there seems to be a tendency to use the heavyweight Type 1 decision-making process on most decisions, including many Type 2 decisions.
"The end result of this is slowness, unthoughtful risk aversion, failure to experiment sufficiently, and consequently diminished invention. We’ll have to figure out how to fight that tendency."
But social media users were quick to point out the same issue - which many found quite amusing.
Responding to the flowchart on Reddit's R/CoolGuides thread, one person said: "That’s basic risk management. Not that it’s not great, but Bezos didn’t create this he’s just saying take less time on lower impact/probability risks/decisions than higher ones."
A second echoed: "This is what is known as professionalizing common sense."
While a third summarized: "This basically says ‘for important decisions, do your research and seek good advice’…"
A fourth didn't hold back, writing: "My decision making model is to not treat billionaires as role models."
But a number of people defended the model, as one person explained: "Yes, it's common sense when it's laid out like this.
"But the same is true for lots of things that organizations don't do, but should.
"The insight here is only in the handwritten version, not the graphic - i.e. that large organizations tend to become excessively risk averse and slow in decision making because that's the safer/easier thing for each individual executive to do even if it's worse for the organization overall."