In the standoff between Amazon and Hachette, the customer comes last
FORTUNE — Having written extensively about great companies like Apple (AAPL), Google (GOOG), and Amazon (AMZN), I’m often asked what ordinary people, managers, and companies can learn from their examples. Apple’s focus is legendary. Google’s collection of talent has been a key to its success. Amazon has a handy-dandy resource for explaining to others its business approach: a list of Leadership Principles posted on its site.
The leadership principles, a kind of corporate values statement, is a good read and contains some gems that would greatly benefit businesses everywhere. Some of my favorites include “bias for action” and “have backbone; disagree and commit.” But Amazon made a conscious decision to lead its 14-item list with “customer obsession.” It’s worth quoting in full:
“Leaders start with the customer and work backwards. They work vigorously to earn and keep customer trust. Although leaders pay attention to competitors, they obsess over customers.”
Corporate value statements can be poppycock or incredibly meaningful. At Amazon, the notion of thinking first about the customer might well be poppycock, but if so it is frequently repeated poppycock. When I interviewed Jeff Bezos for a cover story in late 2012, in which Fortune named him CEO of the year, he quoted the “starting with the customer” line to me verbatim. He took things a step further, suggesting that Amazon people even think about customers in the shower. The point was that while some companies wake up thinking about the competition, Amazon takes its first daily corporate breath considering the people who keep them in business.
I’ve been thinking about Amazon’s language the past few days, as its dispute with Hachette Book Group has flared into the open. According to press coverage, Hachette and Amazon are locked in a fight over e-book pricing. Amazon has reacted by making it more difficult for customers to buy books published by Hachette. Its two primary weapons have included making new Hachette titles unavailable for pre-order, a crucial sales opportunity, and slowing delivery of so-called backlist books, titles that are in print but have been on the market longer.
MORE: Amazon has gone too far
I should pause to note that I’m hardly a dispassionate observer. The paperback edition of my January 2012 book Inside Apple is currently in print. Its publisher is the Hachette imprint Grand Central Publishing. Amazon says, without further explanation, the book “usually ships within 2 to 5 weeks.”
That’s nonsense, of course. Barnes & Noble’s website says my book should ship within 24 hours. While Amazon is selling my book at full price, designed to punish Hachette by discouraging purchases, B&N offers a customer-friendly 35% discount. (I encourage you to buy it there.) It’s not just big retailers that can sell my book quickly. Over the holiday weekend I walked over to my wonderful neighborhood book shop, Christopher’s Books in San Francisco, and inquired how long it would take to get my hands on a copy of Inside Apple. The book- and customer-loving woman behind the counter apologetically told me it would take until Wednesday — but only because of the Memorial Day holiday. (Christopher’s will order and ship books for anyone, anywhere. Call them.)
I’ve used my book to illustrate the case, but I have in no way been singled out for rough treatment. I checked multiple books that my editor at Hachette has issued in the last couple years. All are being subjected to the same dastardly treatment by Amazon. (The New York Times, the Wall Street Journal, and the Washington Post all have good details on the various authors affected by the spat. The Post, of course, is owned by Amazon’s Bezos.)
But let’s get back to the customer. Assume for a moment that Hachette is the bad guy here, that the smallest of the major book publishers is making unreasonable demands on Amazon. (This seems unlikely, but bear with me.) Even if Hachette were behaving badly, I’m scratching my head trying to figure out in what strange universe Amazon believes that making it difficult for its customers to buy Hachette’s products is consistent with “customer obsession.” I’m trying to understand how Amazon thinks this will help it “earn and keep customer trust.”
Neither side is saying very much, by the way. Amazon isn’t commenting, and Hachette is issuing platitudes. I asked both companies over the weekend how many titles are affected by the dispute, and neither would say.
At the beginning of this year I reviewed Brad Stone’s excellent book about Amazon, The Everything Store. Because Stone’s publisher is part of Hachette, he too is caught in the crossfire. In my review, I said the book “will make anyone who reads it, regardless of how much they love being an Amazon customer, feel icky about themselves for just how much they enjoy buying things at Amazon.” I for one feel ickier than ever. I buy something from Amazon several times a week. I choose the Kindle format for my e-books over Apple’s iBook format because the Kindle app works so damn well on Apple and Amazon devices alike.
As Farhad Manjoo noted recently in the Times, for years Amazon’s detractors have been warning about the dangers of market concentration. Now we’re seeing a vivid example of those dangers realized. I can’t imagine in the future recommending that anyone buy my book — or my future books — on Amazon if they have an alternative. Yet as for myself I suppose I’ll keep right on buying books and dental floss and gadgets from Amazon. And feeling icky about myself for it.