Leadership

Why Jeff Bezos wants Amazon employees to ‘wake up every morning terrified’

80421723
David Ryder | Getty Images

Complacency is the kiss of death in business and in life. That's why Jeff Bezos recommends using fear to drive work ethic and innovative-thinking — even when things are going well.

"I constantly remind our employees to be afraid, to wake up every morning terrified," the Amazon founder wrote in a 1999 shareholder letter. "Our customers have made our business what it is," he continued, "and we consider them to be loyal to us – right up until the second that someone else offers them a better service."

For Amazon to remain competitive in the future, employees needed to be scared of no longer being the best and commit to "constant improvement, experimentation and innovation in every initiative."

Using fear as a motivator is a strategy that has also worked well for others, including Tim Ferris.

Ferris, the best-selling author and podcast host, encourages fear-setting, an exercise where he writes down his fears, what could happen as a result of that fear, and how he'll prevent that worst-case scenario. He says his biggest wins have been connected to this process that helped condition himself to fail in order to find success.

PepsiCo's Indra Nooyi also uses fear to guide her next moves forward. When she first took the helm at PepsiCo, Nooyi came in with novel ideas, like a focus on healthier products and a redesign of packaged goods. Nooyi's vision helped transform the company and made her a leading business figure in the food and beverage industry.

In a 2016 Bloomberg interview, the CEO who steps down October 3, acknowledged that fear greatly contributed to her strong work ethic and innovative business strategies.

"I'm always afraid that if I fail, I may have to go back to something that I don't want to," she said. "That fear always motivates me and so I drive myself to be better and better at my job everyday."

The same goes for Bezos, who doesn't allow a fear of failure to keep him from learning or trying new things. For example, Amazon has moved beyond just selling books online. From health care to groceries to meal-kits, the company has staked a claim in a growing number of industries since its launch in 1994.

"To invent you have to experiment, and if you know in advance that it's going to work, it's not an experiment," Bezos wrote in a 2016 shareholder letter. "Failure and invention are inseparable twins."

Experimentation, for Bezos, has paid off in dollars and cents. Bezos himself is now worth more than $156 billion, a record amount, and Amazon is poised to become the next trillion-dollar business.

"That resourcefulness of trying new things, figuring things out ... it pays off in everything," Bezos said at a Summit conference last November.

Like this story? Subscribe to CNBC Make It on YouTube!

Don't miss: What Elon Musk could learn from Jeff Bezos and Warren Buffett