Jeff Bezos, Risk-Averse Rebel

Jeff Bezos, the new owner of the Washington Post, has shown an ability to try new things while not actually risking much — a combination that provides an important lesson on innovation

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In 1938, as he was about to head to London, Rome and Paris for a six-week sojourn, Peter Drucker struck a deal with Eugene Meyer, the publisher of the Washington Post, which was looking to beef up its foreign coverage.

For Drucker, who was then 28 and still some years away from achieving fame as a management writer and consultant, the $150 advance that Meyer offered him was “a big sum” — enough to pay “for most of my European expenses other than the transatlantic fare.” From Meyer’s perspective, the arrangement was a win as well. After all, Drucker observed, “he did not risk much.”

In his own way, Jeff Bezos, the newest owner of the Post, has also shown a remarkable ability to try new things while, in the end, not actually risking terribly much — a powerful combination that provides an important lesson on innovation.

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Last week’s announcement that Bezos was buying the Post from Meyer’s descendants, the Graham family, has triggered a lot of discussion about what kind of whiz-bang advances the Amazon founder and CEO might bring to the staid world of newspapers. For those watching from Silicon Valley, the Los Angeles Times noted, it seems that “someone may finally deliver technical and entrepreneurial prowess to an industry they largely view as slow footed.”

Bezos is anything but slow footed. At the same time, he is someone with a keen understanding of an essential Drucker insight: major breakthroughs typically don’t happen very quickly — even during an age in which information can travel across the globe instantaneously.

Many believe that “new knowledge is being converted much faster into new technology than at any earlier time,” Drucker wrote. “This is demonstrably untrue. In fact, there is a good deal of evidence that it takes longer today to convert new knowledge, and especially new scientific knowledge, than it did in the 19th century … There is a lead time, and it is fairly long.”

If anyone appreciates the deliberate pace of the innovative process — and, with it, the need for patience and perseverance — it is Bezos, who famously invests for the long term.

“While others rush around in the frenzy and busyness which very bright people so often confuse with ‘creativity,’ the plodder puts one foot in front of the other and gets there first, like the tortoise in the old fable,” Drucker wrote in The Effective Executive.

Or as Bezos, whose business a decade or so ago was all but written off for dead, characterized his approach: “You just stay heads down, stay focused and you build out your vision.”

Speaking to shareholders at Amazon’s 2011 annual meeting, the billionaire elaborated: “Go back in time when we started working on Kindle almost seven years ago. There you just have to place a bet.”

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But this is the key: The Kindle wasn’t the only bet that Bezos and his team had placed. 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.

It is this combination — carefully analyzing customer needs, endlessly experimenting in a bid to meet them, methodically moving ahead with what is working and unsentimentally abandoning the rest — that Drucker would have greatly admired.

“Forty years ago we were not so sure how to do these things,” Drucker wrote in Managing for the Future, published in 1992, a couple of years before Bezos started Amazon. “Now there is no excuse. The common pretext of waiting for the genius with the flash of inspiration will no longer wash. Any enterprise … can today organize itself to undertake systematic entrepreneurship and purposeful innovation.”

Meanwhile, here’s the part that tends to get missed: if an organization does so — constantly and without hesitation — it ultimately reduces its risk. “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 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.

“By the time you are betting the company,” Bezos added, “it means you haven’t invented for too long.”

And the next thing you know, you’re likely to find yourself on the obituary pages.

MORE: Four Reasons Why Jeff Bezos and the Washington Post Will Be a Good Match

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