Amazon Tarbelled by Seattle Times, Bezos Deified by Forbes, Golden Compass Needed
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While Amazon’s (NASDAQ: AMZN) hometown newspaper, the Seattle Times, was publishing a less than flattering anecdote-driven series “Behind the Smile – Examining Amazon’s Corporate Practices,” across the continent Forbes was unveiling its new cover “America’s Best Leaders” with centerfold Amazon CEO Jeff Bezos being declared, “the corporate chief that others most want to meet, emulate and deify.”
Both publications have clearly made quantum leaps with their time machines into parallel universes. The Seattle Times sojourned back to the days of Ida Tarbell ripping Rockefeller a new one, and Forbes traveled forward into the pages of Princess Irulan’s mythology of the God Emperor of Dune.
While the rest of us search for a golden compass to navigate these diverging planes of existence in the hopes of discerning the CEO’s motivations and future prospects, 1987 sci-fi fanboy Jeff Bezos responds in his Princeton yearbook with a quote from Ray Bradbury’s introduction to Colonies in Space:
The Universe says No to us. We in answer fire a broadside of flesh at it and cry Yes!
Thus began the voyage of “the Dread Pirate Bezos". So while the legacies bemoan a time when no one used to measure how many books were sold, and traditionalists write obituaries to dust mites and scoliosis, the real story is how Amazon is using its experience with media to dominate any other service or commodity for which it sets sail.
Ever since Steve Jobs passed, Bezos has been anointed as the new international man of mystery for the media to obsess over.
The Forbes approach:
...doesn't evaluate mushy qualities like leadership style, employee satisfaction or public adoration. Rather, it's a straightforward ratio of shareholder return (several measures of stock performance, including dividends) to CEO compensation...This year we found 206 chief executives whose companies have been publicly trading since March 2006, have been in office at least six years and have at least six years of pay history. The most efficient...Amazon’s Jeff Bezos...
The Seattle Times perspective:
We found that the company is a virtual no-show in the civic life of Seattle, contributing to nonprofits and charities a tiny fraction of what other big corporations give. In the political world, the company's hardball efforts to fend off collecting sales taxes — a key advantage over brick-and-mortar stores — has ignited a backlash in several states. In the publishing world, smaller companies have begun to publicly criticize Amazon's bullying tactics. And in some of its warehouses around the country, Amazon is drawing fire for harsh conditions endured by workers.
Much of the Seattle Times’ reporting is a well-written, unrefuted anecdotal narrative incorporating the little information Amazon makes available – to anyone (be they media, shareholders, or employees). However, the newspaper’s editors decided to spice up the series with sensational headlines that did not quite live up to the rest of the text, which falls short of revelatory for anyone that has ever held a job, and categorically illustrates how Amazon is – if not best in class – then clearly at the head of it.
It would be best if the Seattle Times stuck to investigative reporting like, “Is the Kindle the New Toaster” – it would be more groundbreaking than their recent series that found companies like low taxes and prefer minimal interference from government.
On the other hand, Forbes’ grandiose proclamation that Jeff Bezos is the CEO of CEOs is not based on much. It is more likely (and the list itself proves) other CEOs would be drawn to a position with higher pay in a more stable industry and would forgo the celebrity status with its accompanying media scrutiny. Having to shell out $1.6 million for security (the highest reported so far under new SEC regulations) is not the best sign, and indicates more of a bubble than protection (or a wildly broad interpretation by accountants for all and sundry). If the modern business leader is looking for a good read on how to rule the world, less messianic than Forbes would be works on the King of Kings or the Khan of Khans.
However, the general findings of Tufts University Medical Center’s Dr. Nassir Ghaemi in A First-Rate Madness: Uncovering the Links Between Leadership and Mental Illness may allay some investor concerns that have been raised over a vignette in the recent Forbes interview:
[Jeff Bezos] still dashes around Amazon with the intensity of a startup boss trying to make his first payroll, as well as the glee of a teenager discovering all the fun you can have at overnight camp. “I’m a legitimately happy person,” Bezos explains on a recent, rainy Friday morning at Amazon’s Seattle headquarters. “My wife says: ‘If Jeff is unhappy, just wait five minutes.’”
A successful private investment firm that uses a strategy ranking CEOs based on exceptional leadership qualities (such as character, integrity, and coping) found that Jeff Bezos was one of the most difficult to measure:
Bezos is like a lot of dynamic founder CEOs who are popularly categorized as productive narcissists. So while a narcissist is just a flat out disaster, the productive narcissist will undoubtedly perform well and frequently exceed expectations. But then they eventually implode and take everyone with them...While you can go long on someone like [Costco’s] Jim Sinegal without much worry,...[with] a guy like Bezos, you still have to keep a tight eye on what he’s doing, though you’d be crazy to write him off completely at any time.
While it is true that Bezos does not take customer calls like retiring anti-celebrity celebrity CEO Jim Sinegal of Costco, since the beginning he has shown a love for reading customer e-mails and quoting them in lectures and the annual report. Twenty months after he started his company, Bezos was telling the Amazon story to a standing room only crowd at the University of Washington’s largest auditorium (a presentation so good I’ve carried the tape around with me since I was a student sitting on the concrete slab beneath his podium.) He recounted one of his first experiences with negative media:
Slate had a very nasty article about us and when I read it I first thought, “Well, thank God no one reads Slate,”…There were over 200 responses to Slate’s online forum…and just two of those defended the authors, and a 198 of them completely jumped all over [the magazine] – some of them very nasty (which I relished!) For days people could hear me howling out of my office as I would read these quite witty responses from people defending us. One of them ended with, “I think the authors should pursue a less thought demanding line of work…I hear there are lots of openings in food services.”
[Later] Michael Kinsley [Slate’s editor] sent me an e-mail message that said if you think the article on Amazon.com in Slate was bad, you should read the one on [Slate] in Vanity Fair. And I did read that article, and I didn’t think it was that bad – I think it’s the shoes, you know whoever’s wearing them...– but I did sympathize with him in one sense because people do read Vanity Fair.
[Audience member: Does Amazon carry hard copies of Slate?]
No, and we won’t be [grinning] – no that’s not true.
A century later, a similar ratio of pro/anti online responses have filled the Seattle Times’ comment section – and Amazon continues to offer subscriptions to the Seattle Times (though at an 8% mark-up over buying the digital edition directly from the newspaper's website).
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Nick Slepko has no position in any company mentioned here at the time of publication. Motley Fool newsletter services recommend Amazon.com. The Motley Fool owns shares of Amazon.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.