In his latest online column for Time magazine, Drucker Institute Executive Director Rick Wartzman explores how creating a culture of continuous innovation has helped Amazon founder Jeff Bezos, who announced last week that he is buying the Washington Post, mitigate risk.
“Go back in time when we started working on Kindle almost seven years ago,” Wartzman quotes Bezos as telling Amazon shareholders in 2011. “There you just have to place a bet.”
“But this is the key: The Kindle wasn’t the only bet that Bezos and his team had placed,” Wartzman writes. “In addition to pushing forward on the e-reader, they were also busy working on cloud-computing services and a host of other innovations related to Internet commerce, which Bezos labeled more ‘incremental’ and yet still called ‘critical.’
“Indeed, Amazon has established a culture in which it is incessantly ‘planting seeds,’ to use Bezos’s words, perfectly comfortable that some will blossom if given sufficient care and feeding (usually over many years), others may sprout but then be ripped out by the roots as it becomes clear that they won’t ever reach full flower, and still others will never even poke out of the ground.”
By engaging in these practices—what Peter Drucker called “systematic entrepreneurship and purposeful innovation”—an organization “ultimately reduces its risk,” Wartzman says.
“The innovators I know are successful to the extent to which they define risks and confine them,” Drucker wrote. “Successful innovators are conservative. They have to be. They are not ‘risk-focused’; they are ‘opportunity-focused.’”
“This,” Wartzman says, “describes Bezos perfectly.” “If you place enough of those bets, and if you place them early enough, none of them are ever betting the company,” he explained. “If you invent frequently and are willing to fail, then you never get to that point where you really need to bet the whole company” on any single initiative.