From Wall Street to Silicon Valley, the world was startled by the announcement of Jeff Bezos’ power transfer at Amazon to Andy Jassy. Which is in itself surprising, given how well planned and telegraphed this move was.
We didn’t know the exact day and hour — but the path was clear. The timing makes perfect sense in terms of strategic and industry life stage, as well as the life stage of the company’s culture and the characters involved. We all should have seen this coming.
Amazon just easily soared past the performance milestone of $100 billion revenue in a single quarter – up over 30 percent on the year. For UPS alone, Amazon delivery demand is now about 12% of its revenues. To respond to the surge of Covid-generated e-commerce demand, Amazon hired an unparalleled 500,000 new employees. Last year they matched Apple’s trillion-dollar market cap, and they’re already approaching $2 trillion. With such a successful crisis response and fortified infrastructure, this is a great time to hand over the reins.
Jassy’s business unit, AWS, is an extraordinary success saga – legendary even in the world of disruptive tech miracles. I attended many tech conferences in the 1990s where tech titans such Larry Ellison of Oracle and Sun Microsystems, with eyes bulging, frothed about the promise of what we now call “the cloud” — but Jassy didn’t talk about it, he quietly acted on it, launching AWS from scratch 17 years ago. It now accounts for over 10% of Amazon’s revenues — but more than half of its operating profits.
In August, Jassy’s counterpart, the equally-successful Jeff Wilke, who ran the massive consumer business announced his upcoming “retirement” at age 53 — the same age as Jassy. It became clear Jassy was deemed ready to assume the reins from Bezos. While Jassy was not a flight risk, his ascension was a great way to lock in a key star. Amazon’s superb internal staffing systems were ready to snap into gear, promoting several logistics stars into their revered “S-team” of two dozen top executives, backfilling for the ripple effect. It is noteworthy that there has been virtually no turnover in this top tier — including widely admired longtime CFO Brian Olasvsky.
With his enterprise and his successor ready, Jeff Bezos was now ready to surrender the CEO position after 27 years. I studied such tech titans for my book The Hero’s Farewell (Oxford University Press) and it’s clear Bezos has reached a life stage where he is ready to move on. By doing it now, he’s avoiding the trap that befalls too many brilliant tech founders, men like Digital Equipment’s Ken Olsen, William Norris at Control Data, An Wang at Wang Labs, Ed de Castro at Data General and Scott McNealy at Sun. They acted as monarchs, were reluctant to let go — and rode the businesses they built into the ground.
Bezos, through his redefinition of information technology, retail, and logistics, fueled by his distinctive management systems and metrics, has little left to prove. As Chief Executive’s editor Dan Bigman wrote yesterday, “Somewhere along the way to becoming one of the richest men in the world, Jeff Bezos also became the most influential and inventive business thinker of the last 50 years.”
Bezos has plenty of other interests beyond Amazon, torn by his desire to divert attention to his wide portfolio of interests in such endeavors as Blue Origins space travel, the Day 1 Foundation assisting young families in need, his Earth Foundation, with $10 billion committed to climate change issues, and journalism through the Washington Post company. By contrast, the self-destructive tech monarchs had no such compelling outside interests.
As Executive Chair of the company, Bezos will also be able to help insulate Jassy from antitrust, regulatory, work force policies, community economic impact concerns and other societal pressures. His personification of the Amazon brand externally, in an ambassadorial role, will allow Jassy to focus more on running the enterprise. Andy Grove in better old days of Intel, Bill Gates of Microsoft, and Larry Ellison of Oracle are compelling examples of how well these ambassadors can function.
A decade ago, Bezos confided in me backstage at a Microsoft conference I was helping to moderate that he greatly admired the Bill Gates-Steve Balmer transition. But moments later, when I had him on stage, he adroitly sidestepped any public discussions of succession. He saw no reason to stir up any internal tensions or external uncertainty. But like everything else with Jeff Bezos, I’m pretty sure he already had a plan.