Reading a selection of Jeff Bezos annual letters from the book “Invent & Wander” reveals an encyclopaedia of insights and learnings on how to analyse a think about a business, in particular Amazon. In his 2008 letter titled “Working Backward”, Bezos contrasts the working backward versus skills approach.
In working backward, start with the customer need, then work backward to determine what competencies are needed to serve those needs. In contrast, skills forward begins with an evaluation of the skills and competencies a company has, and to use these to drive business opportunities. “We are really good at X. What else can we do with x.”
Although skills forward is often a tried and tested approach, Bezos says a company employing it will never be driven to develop fresh skills, and eventually the existing skills will become outmoded.
“Working backward from customer needs often demands that we acquire new competencies and exercise new muscles, never mind how uncomfortable and awkward-feeling those first steps might be”.
Bezus uses kindle as an example, which was launched in November 2007. Four years prior, they started with a vision: every book, ever printed, in any language, all available in less than sixty seconds.
Although Amazon had never designed or built a hardware device, rather than change the vision to accommodate their then-existing skills, they hired several talented hardware engineers and got started learning this new skill. Kindle was a remarkable success.
This approach to working out where to compete is refreshing and can be applied to careers as well as to other businesses. I have worked with conglomerate businesses, such as Padenga, going into new business areas such as gold mining, where they had no institutional experience (they were previously a crocodile farming business). They recognised that crocodile farming was a declining business, and so pivoted to gold mining. They acquired a gold mining company, provided capital for expansion, hired the right people, and within a few years became a leading gold mining company in Zimbabwe.
Same idea with careers. During my career, I’ve rotated between clothing retail, agro-processing, property development, and most recently vehicle finance, from analyst to CFO roles. Each industry demanded learning new skills and required a deep curiosity, humility, and willingness to learn. Before I went into property development, I recognised the need for an accounting degree, so I took an accounting qualification, attended and spoke at industry conferences. Before long, and drawing from Jim Slater’s “Zulu Principle”, you soon become something of an “expert” within the industry.