Long-run outcomes key in decision making, executive advises
By: Claire Abramowitz
Amazon.com’s senior vice president for North American retail discussed leadership and tough choices on Wednesday in the final lecture of this year’s "Leadership in a Technological World" series at Princeton University.
Jeff Wilke, a 1989 Princeton graduate, drew on his experiences as an undergraduate in chemical engineering as he addressed the perks and pitfalls of leading a large-scale corporation.
"It’s all in Brealey and Myers, the classic textbook from the 1980s, ‘Principles of Corporate Finance’ are you guys still using that?" asked Mr. Wilke, who is now a member of the advisory council for Princeton’s Center for Innovation in Engineering Education (CIEE), which co-sponsors the lecture series.
An Amazon executive since 1999, Mr. Wilke cited the rise of Amazon as illustrative of the importance of long-term thinking.
"When we started having customer reviews for our products, all manner of stakeholders, consultants, and business press tried to ‘help us’ to tell us that the goal was to sell products, not dissuade customers from buying them," he said.
"But now, based on customer trust scores and the ongoing popularity of customer reviews, we know this was the right call," Mr. Wilke said, adding that a benefit of making long-term value a priority is that it attracts long-term investors.
"The sum of thousands of short-term decisions can determine vastly different long-run outcomes," he said.
"For example, we invested $300 million to build up our infrastructure, with 30 physical locations, and in doing so, we avoided capping the long-term value of our company," he added.
Mr. Wilke cemented his point with a slideshow of clippings from business journals from 1997 to 2000, all of which predicted Amazon’s failure, including a cover of BusinessWeek asking, "Can Amazon Make It?" and a similar one from Barron’s entitled "Amazon.bomb."
"Most of it is standing tall and sticking to what you believe in even when people are hammering you," Mr. Wilke said.
"The short-term choices are usually straightforward with the right amount of analysis, but the pursuit of the long-term value requires you to imagine the future, and you won’t find out whether you were right or wrong for very long time," he said.
"It can often mean present sacrifice, but especially during hard times, you have to stay true to your principles and plans," Mr. Wilke said.

