HBR names Bezos the best performing CEO on the planet

[fjtorres]

Summary:

http://www.geekwire.com/2014/harvard...ing-ceo-world/

Full report, listing the 100 best CEOs:

http://hbr.org/2014/11/the-best-perf...the-world/ar/1

Notably, the only media CEO on the list is Bob Iger (Disney) at 60 and nobody from publishing.

Jeff Bezos and Amazon have been taking it on the chin on Wall Street and elsewhere over the company’s lack of profits. But a new ranking from the elite Harvard Business Review offers a completely different perspective, crunching nearly two decades of financial data and naming Bezos the best-performing CEO in the world.

How is that possible? The ranking looked not at profits, specifically, but at the broader measure of shareholder return, which includes the increase in the company’s market value, driven by its share price.

It wasn't even close:

Writes HBR’s Daniel McGinn, “The company’s stock performance since its 1997 initial public offering has been so strong that its share price could have dropped to $250, and Bezos would still rank as HBR’s best-performing CEO.”

The article goes on to offer a view of Bezos in stark contrast with popular opinion.

The other big misconception: that Bezos doesn’t care about profitability. By all accounts Amazon’s mature businesses (such as online retail) are profitable; it’s his deep investments in new businesses that create accounting losses, which he regards as a false measure of performance.
“He’s really focused on cash flow and what kind of return on invested capital is being created,” says Warren Jenson, Amazon’s chief financial officer from 1999 to 2002.
Bill Miller, a fund manager at Legg Mason who has held shares in Amazon since it went public, says Bezos shows deep understanding of the point Clay Christensen made in his recent HBR article “The Capitalist’s Dilemma,” which argued that most managers focus on the wrong financial metrics. “Jeff really takes theory seriously—he started out wanting to be a theoretical physicist,” Miller says. “In terms of financial theory, he’s trying to get away from the behavioral problems that afflict other companies” that try to maximize the wrong numbers.
Other Bezos watchers go even further: At a time when many large companies (most notably Apple) are hoarding idle cash, shouldn’t we be lauding Amazon’s ability to continually find entirely new industries to reinvest and innovate in, rather than criticizing the losses driven by those outlays?

HBR also looked at intangibles and reputation and ended up with a different list... with Bezos only slightly lower at number 4:

Someday, we hope that there will be equally concrete ways to account for “intangibles”—environmental impact, employee satisfaction, customer engagement—so that we can confidently add that data to the formula. Until then we can only supplement this list with parallel data that tries to track some of these “softer” attributes.

Along those lines, we asked the Reputation Institute, a reputation management consultancy, to rank our top 100 CEOs in terms of these other skills—work environment, citizenship, governance, leadership, and so on. The results suggest, I’m afraid, that doing well doesn’t correlate much at this stage with doing good. That said, a few superstars scored high across the board, including Bezos, who, despite Amazon’s well-publicized entanglements with publishers and authors, was #4 on the Reputation Institute list.

Disney and Discovery were the only media companies to crack this list.

Finally, on the company reputation metric:

Bezos wins again. We can probably chalk the dual achievement up to his constant pursuit of a clear vision: to be “the most customer-centric company in the world.” Still, it presents a marvelous irony. The leader most adamantly ignoring Wall Street pressure creates the most value—and the company that spends next to nothing on advertising and PR ends up with a great reputation.

Doesn't look like neither Bezos nor Amazon is going away anytime soon.

[crich70]

Bread and circus's in the digital age. Give people what they want and they will follow. The emperor's of Rome knew that and it looks like Mr. Bezos does as well.

[Shane R]

It's been said for a while that Mr Bezos was an original thinker, perhaps there's something to it.

I'm most surprised that he's been able to stand behind the scenes and sling filth at the authors and publishers and still come out top 5 in reputation.

Edit:

When the attendees arrived, Bezos told them he’d received an employee suggestion that Amazon supplement its existing shipping policy—free shipping on orders over $25—with a new offer. Customers would pay an annual fee for free shipping on most products, regardless of order size. “Jeff was extremely energetic—he felt this was an opportunity to build something that was going to be very important,” Ravindran recalls. Hence the urgent weekend meeting at the lake.

The proposal sparked hushed concerns and consternation. Amazon’s finance team worried that waiving shipping charges would gut margins. “There were people who thought it was an extremely bad idea—the spreadsheets uniformly painted pictures of losses,” Ravindran says. Bezos ignored the objections, convinced that the offer would spur more orders. That intuition proved correct just weeks later, when the program, Prime, launched. Customers who’d previously made a few purchases a year were suddenly ordering multiple times a month. “Instead of looking to protect the current business, Jeff saw the upside,” says Ravindran, now chief digital officer at Graham Holdings. “It was the most impressive display of business leadership I’ve seen in my career.” Today tens of millions of customers pay $99 a year for Prime, which generates more than $1 billion in membership fees and incalculable incremental sales.

[DuckieTigger]

Originally Posted by fjtorres

Notably, the only media CEO on the list is Bob Iger (Disney) at 60 and nobody from publishing.

Isn't Bezos both, media CEO and publishing CEO? Unless, of course, media and publishing are such small parts of Amazon, that it doesn't really matter on how well they perform?

[fjtorres]

Originally Posted by Shane R

It's been said for a while that Mr Bezos was an original thinker, perhaps there's something to it.

I'm most surprised that he's been able to stand behind the scenes and sling filth at the authors and publishers and still come out top 5 in reputation.

Edit:

Source please?
Bezos himself slings filth?

No snark: I'd like to see a report and context.
Given all the crap he's taken from the likes of Wylie and the Au gang I wouldn't be surprised if he did snap back but I'd like to see the what, where, and when. Fair?

As to the company's reputation, well contrary to the zombie memes, Amazon is actually a pretty good corporate citizen by the yardsticks used in the business reputation survey; they minimize packaging waste, among other green initiatives; they hire local in most countries where they do enough business to justify it; their entry level salaries are 50% above minimum wage, they offer stock bonuses and educational programs... Most of the things they are dinged over don't register or are actually pluses from the corporate governance point of view.

And then, on the consumer side... well we all know their reputation with buyers: number one brand in the September Harris survey.

They even released a diversity report on their workforce that paints them as pretty typical for a US company and better than most tech companies:

http://www.cnet.com/news/amazon-dive...ale-and-white/

No angels or demons found in the survey. Just typical corporate types.
Much like Apple or Google.

(Of course, nobody's asked John Constantine...)

Now, the publishing industry...
Well, let publishers weekly speak:
http://www.publishersweekly.com/pw/b...ry-survey.html

[carpetmojo]

Nothing like not making sweeping statements, is there .....

[frahse]

I would have to put Elon Musk ahead of Bezos.

[mgmueller]

Originally Posted by frahse

I would have to put Elon Musk ahead of Bezos.

But Tesla Motors for example only makes $ 2 Billion of revenue and even at a loss.
One certainly won't be voted top CEO with such figures - visionary or not.
(Even though the profits of Amazon as well certainly could/should be better).

Personally, I'm just glad they didn't vote for Zuckerberg...

[frahse]

Originally Posted by mgmueller

But Tesla Motors for example only makes $ 2 Billion of revenue and even at a loss.
One certainly won't be voted top CEO with such figures - visionary or not.
(Even though the profits of Amazon as well certainly could/should be better).

Personally, I'm just glad they didn't vote for Zuckerberg...

Musk is multifaceted.
Paypal
TSLA
Solar City
SpaceX (his real love besides that English actress)

[Anthem]

Very interesting. Jeff Bezos is someone who continues to fascinate me. My opinion of Amazon has been up and down over the years... but currently, it is sky rocket high.

[mgmueller]

Originally Posted by Anthem

Very interesting. Jeff Bezos is someone who continues to fascinate me. My opinion of Amazon has been up and down over the years... but currently, it is sky rocket high.

There was an interesting discussion in German TV a few months ago:
Why is there no German or European Amazon or Google?
Lots of explanations.
But my personal simple one would be:
Apple impressively did demonstrate: It's about the interaction of content and hardware.
Users buy iPads because of iTunes.
Users buy in iTunes because they have iPads.
And Amazon and Google perfectly understand this as well.
And Bezos brought it to the point: "We don't want to make our profits, when selling our units. We want to make our profits, when our hardware is used".
Absolutely fantastic.
Most other merchants, coming from Amazon's background, would have broadened their portfolio of products to resell. But inventing their own products? Definitely takes a visionary and some guts to do so...

[Anthem]

Originally Posted by mgmueller

Most other merchants, coming from Amazon's background, would have broadened their portfolio of products to resell. But inventing their own products? Definitely takes a visionary and some guts to do so...

I agree. The Fire/Kindle/TV ecosystem is actually extremely compelling. Despite the fact that I have an iPad, Apple TV, and a Mac and how well those work together when purchasing things through iTunes, etc.... god, I still find myself constantly wrestling with whether I should purchase through Apple of Amazon because I also have a Kindle, Fire HDX, and Fire TV and things work so seamlessly between those as well. And you can just put all of the Amazon apps on your Mac and iPad which effectively turns those in to Amazon devices as well.

Argh!

[tubemonkey]

all hail the mighty Jeff

[frahse]

Originally Posted by tubemonkey

all hail the mighty Jeff

"Hear, hear!"

[pghaworth]

Originally Posted by fjtorres

Doesn't look like neither Bezos nor Amazon is going away anytime soon.

I love that he doesn't have an MBA and instead has an engineering degree.