Amazon Founder Jeff Bezos: This Is How Successful People Make Such Smart Decisions
The key, according to Bezos, is to make this decision before you make any others.
PHOTO CREDIT: Getty Images
Amazon founder Jeff Bezos excels in a number of ways. Building an incredibly successful company (and an incredible fortune.) Knowing how to hire the right people. Turning an internal initiative into Amazon Web Services, a subsidiary that does over $24 billion in annual revenue.
But arguably his chief skill -- and it's arguably the most important skill any entrepreneur or leader possesses -- is the ability to make a number of smart decisions.
So how does Bezos make so many decisions so quickly?
He doesn't deliberate over easily-reversible decisions.
Many of us place equal value on almost every decision. Why? We don't want to be wrong.
But sometimes it's okay to be wrong -- or at the very least, to not worry as much about being wrong.
According to Bezos, there are two basic kinds of decisions you can make:
- Type 1: Almost impossible to reverse. Bezos calls them "one-way doors." Think selling your company. Or quitting a job. In short, figuratively jumping off a cliff. Once you make a Type 1 decision, there's no going back.
- Type 2: Easy to reverse. Bezos calls these decisions "two-way doors." Like starting a side hustle. Or offering a new service. Or introducing new pricing schemes. While Type 2 decisions might feel momentous... with a little time and effort (often a lot less than you think), they can be reversed.
Unfortunately, it's easy to mistake a Type 2 decision for a Type 1 decision... or to let caution creep in and assume that every Type 2 decision is a Type 1 decision.
Do that and you become paralyzed -- and make no decision at all.
As Bezos wrote in a shareholder letter,
"Some decisions are consequential and irreversible or nearly irreversible - one-way doors - and these decisions must be made methodically, carefully, slowly, with great deliberation and consultation. If you walk through and don't like what you see on the other side, you can't get back to where you were before. We can call these Type 1 decisions.
"But most decisions aren't like that - they are changeable, reversible - they're two-way doors. If you've made a sub-optimal Type 2 decision, you don't have to live with the consequences for that long. You can reopen the door and go back through. Type 2 decisions can and should be made quickly by high judgment individuals or small groups.
"As organizations get larger, there seems to be a tendency to use the heavy-weight 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."
And so do you.
It's easy to assume every decision is extremely important, that failure is just one wrong decision away. But that's not how success works. Success only seems inevitable in hindsight. Every successful person has made a number of mistakes.
Most have made more mistakes than you -- that's one of the reasons why they're so successful.
As Bezos wrote,
"...failure and invention are inseparable twins. To invent you have to experiment, and if you know in advance that it's going to work, it's not an experiment. Most large organizations embrace the idea of invention, but are not willing to suffer the string of failed experiments necessary to get there."
Want to be more successful? Every time you need to make a decision, make a more important decision first: Decide whether it is a Type 1 or a Type 2 decision.
If it's a Type 2, easily reversible decision, make -- and then execute -- that decision quickly.
Some you'll get wrong. And that's okay: Trust that you'll figure out how to react and how to respond... and that you will be a little wiser for the experience. You'll grow more skilled, more experienced, and more connected.
And that will mean that an even greater percentage of your Type 2 decisions will work out. Make and execute enough decisions -- and learn from each experience -- and in time you'll have all the skills, knowledge, and experience you need.
Make as many Type 2 decisions as you can.
There is no guarantee of success, but when you don't make any decisions at all... you're guaranteed to never succeed.