- Amazon on Thursday announced it was abandoning its proposed expansion in the Long Island City neighbourhood of Queens, New York, following fierce political opposition.
- The change of direction was welcomed by some politicians and lamented by others.
- A 1997 letter to shareholders from Amazon CEO Jeff Bezos sheds some light on his approach to reversing big decisions.
- Bezos said big companies had a tendency to think all big decisions were irreversible when in fact most were reversible.
Amazon’s HQ2 U-turn ties into a bigger philosophy at the company.
On Thursday, Amazon made the shock announcement that it was abandoning its plan to move half of its new campus, known as HQ2, to the Long Island City neighbourhood of Queens, New York.
The decision came after hefty political opposition to the plans from politicians such as Rep. Alexandria Ocasio-Cortez and state Sen. Michael Gianaris, who represents Long Island City.
The political opponents of New York’s HQ2 celebrated the news, and Sen. Bernie Sanders congratulated the city on “standing up” to Amazon. Other politicians, however, including Gov. Andrew Cuomo, viewed the decision as a major loss.
Some have described Amazon’s sudden change of heart as the multibillion-dollar company throwing its toys out of the pram. Sen. Elizabeth Warren of Massachusetts tweeted that Amazon had walked away “all because some elected officials in New York aren’t sucking up to them enough.”
“Rather than addressing the legitimate concerns that have been raised by many New Yorkers Amazon says you do it our way or not at all, we will not even consider the concerns of New Yorkers – that’s not what a responsible business would do,” the director for communications for the Retail, Wholesale and Department Store Union, Chelsea Connor, told Business Insider in a statement.
In the letter, Bezos distinguishes between irreversible and reversible decisions, which he referred to as Type 1 and Type 2.
The first type, he said, were “one-way doors” that needed long and careful consideration.
Such decisions “must be made methodically, carefully, slowly, with great deliberation and consultation,” Bezos wrote, continuing: “If you walk through and don’t like what you see on the other side, you can’t get back to where you were before. We can call these Type 1 decisions.”
But, Bezos added, “most decisions aren’t like that – they are changeable, reversible – they’re two-way doors.”
He wrote: “If you’ve made a suboptimal Type 2 decision, you don’t have to live with the consequences for that long. You can reopen the door and go back through.”
He said these decisions “can and should be made quickly by high judgment individuals or small groups.”
Bezos said in the letter that there was a tendency in big organisations to treat reversible decisions as irreversible.
“As organisations get larger, there seems to be a tendency to use the heavy-weight Type 1 decision-making process on most decisions, including many Type 2 decisions,” he said. “The end result of this is slowness, unthoughtful risk aversion, failure to experiment sufficiently, and consequently diminished invention. We’ll have to figure out how to fight that tendency.”
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