Amazon’s Jeff Bezos is leaving a strong legacy

Jeff Bezos’s decision to step aside as chief executive of Amazon focuses attention on his past achievements and the lessons for other entrepreneurial businesses. It also highlights the challenges facing his successor.

The foundation of Mr Bezos’s success was to persuade shareholders to buy into his long-range management approach — and to stay bought in. That vision was laid out transparently in his letter to shareholders in Amazon’s 1997 annual report, reprinted every year since. There, he said the group would make investment decisions “in light of long-term market leadership considerations rather than short-term profitability considerations or short-term Wall Street reactions”.

Many chief executives envy the leeway this has given Mr Bezos to reinvest in the business. Amazon would not have grown to be worth $1.7tn without that mutual understanding.

“Invention” has been “the root of [Amazon’s] success”, Mr Bezos reminded “fellow Amazonians” in the message announcing his transition to executive chair. The group’s role in advancing ecommerce, cloud computing, and the production of new devices such as the voice-activated Echo are the most obvious innovations.

Less visible, but similarly transformational, has been Mr Bezos’s insistence on strong culture. In one episode from the 1990s, recounted in Brad Stone’s 2013 book The Everything Store, Mr Bezos told his staff excessive communication was “a sign of dysfunction”, because it demonstrated people were not “working together in a close, organic way”. He has stuck with this intuition that people should solve the problems closest to them, rather than deferring to top-down advice. Other companies have followed.

Finally, the succession planning looks a model. Andy Jassy, who oversees Amazon Web Services, now the group’s largest division, will become chief executive. It is a mark of the smooth change that it does not appear to have unsettled or surprised anyone.

Seamless succession is not unknown among US technology companies. Apple’s installation of Tim Cook in place of the ailing Steve Jobs was ultimately successful. Microsoft managed to transfer leadership from Bill Gates to Steve Ballmer and from Mr Ballmer to Satya Nadella without undue fuss. Still, younger tech founders whose first instinct is to dig in at their creations could learn from the Amazon example.

The handover may not make much practical difference. Mr Bezos was already performing a more strategic role. If necessary, “executive chair” is fungible enough to let him to revert to executing more and chairing less.

The powerful culture he leads should also help Amazon maintain a steady course. Brad Stone describes a “Bezosian force-field”, fuelled by the founder’s single-mindedness and impatience, keeping the customer’s needs at the forefront of every decision. Even when Mr Bezos is concentrating on his other ventures, the force-field will not dissipate.

Mr Jassy inherits the new job at a moment of success, on the back of a wave of lockdown shopping and internet surfing. But it is also a moment of potential unpopularity. Mr Bezos has sometimes pursued his focus on users at the expense of Amazonians’ working conditions. Tax authorities and watchdogs will redouble scrutiny as Amazon emerges stronger from the pandemic. Pressure to curb Big Tech’s power is unlikely to diminish.

That it will be Mr Jassy, not Mr Bezos, who occupies the hot seat for the next challenging phase of Amazon’s development illustrates another of the founder’s signature traits: good timing.