John Rossman uses his experience as an Amazon manager to teach modern leaders to think, plan and beat the competition just like Jeff Bezos.
Amazon’s innovative, customer-centric approach is illustrated through fifty ideas that can be applied to your company to become the new digital leader.
Organize the culture of your digital company
Ideas to steer a company’s culture in the right direction in the digital age:
- Start thinking long-term and plan in this way, in this way you can invest differently than other companies. Furthermore, identifying long-term risks allows to obtain a strategic advantage. As Bezos states: “If you work on a three-year plan then you compete against many, but if you invest in a seven-year plan then the competition will be less because very few companies decide to follow this strategy.”
- Make employees passionate about the company’s mission to achieve success and overcome moments of crisis. Identify the employee’s passion and guide it so as to link it to the company’s mission. This can be achieved by constantly communicating the mission and creating enthusiasm for the company’s success.
- If business stagnates, acknowledge the situation and discuss it by identifying the causes and asking questions whose answers will define the new path, for example: “How to make your own self-service?”, “What annoys the customer?” and so on. Communicate the new plan clearly and implement actions consistent with it.
- Create an obsession for the customer using parameters to measure their satisfaction not only through surveys, but for example by measuring waiting times or experiencing the customer experience firsthand, so Amazon found that the customer experience is influenced by the flexibility, speed and quality of delivery. Make customer obsession everyone’s job.
- Make sure you have an environment where honest conversations are welcome, where getting along is no longer important than being right. For example, identify times when the conversation is not honest and ask the two sides to be more sincere, slow down some meetings to discuss better or ask why five times to get to the heart of the matter.
- Free yourself from bureaucracy, allow employees to make decisions and get leaders to take responsibility if the results are not achieved. Better manage who is employed by you. For example, try not to delegate what you can do alone, if it is not possible, make sure that the communication is clear, do not rely only on trust, but trust and verify.
- Create a non-monetary incentive structure but based on shares of the same company (stock grant), so as to promote the idea that everyone works for the good of the company and its success is everyone’s success.
- Success can push you not to risk and to be on the safe side. Find ways to keep the tension on innovation. For example, develop plans that could be used by competitors to hinder your business, create response strategies and move on to the preventive offensive.
- Promote innovation with projects defined as “betting”. Before launching the project, create the objectives and parameters to measure them over time. If these are correct, the team in charge of the project will have greater autonomy, which implies greater creativity. Keep teams small (maximum ten members). The result of the project must not only be good but fantastic.
- Senior leaders need to know every detail of the project the team is working on.
- Every great innovation is exposed to criticism because it challenges conventions. Be prepared for negative reactions.
- Your support organizations such as: human resources, legal and financial office must participate fully in a project and not be an obstacle to the culture of “yes, it can be done”. For example, you can ask more questions about the situation and the objectives, articulate and quantify the real risks or create a tender for the development of alternative solutions.
- Don’t let bureaucracy and organizational structure stifle innovation, promote passion for problem solving and clear communication. Make everyone interested in the success of the project.
- Give awards to employees who exceed expectations. For example Amazon rewards its inventors with a puzzle piece every time they create something innovative.
- Focus on frugality, for example ask yourself: “How can I cut costs by 50% and improve customer satisfaction and proceeds?”. Such questions and limitations can increase innovation.
From these ideas we can summarize three key principles on which Amazon focuses: obsession for customers at all levels of the company, long-term planning, implementation of a culture focused on frugality to increase attention to detail and innovation.
15 ideas for a successful strategy in a digital company:
1.What does it mean to become a digital company? It can be summarized in two characteristics: speed, that is, the ability to move in a direction quickly and accurately, and agility, the ability to predict market changes and to be able to quickly implement changes to adapt. There are three secrets to being digital: 1) compete differently by focusing on customer experience, less bureaucratic business practices and innovative business models benefited by new technology; 2) implement new management philosophies and learn to take on greater responsibilities, delegating less and less; 3) be able to adapt quickly to change, with faster processes. In a nutshell, becoming digital means simplifying through the help of technology and not being afraid of failures.
2. Think big but act small: find ways to test the success of the product before producing it, an example can be Google Cardboard with which the company tests the interest in VR without investing to create a more complex product . To innovate you need to experiment, for example Amazon Echo and Dash Button were initially available only in limited quantities, once the success was confirmed Amazon made them available to everyone.
3. Can your services or products be offered through a platform? First of all you have to identify your basic features and functionality and secondly the advantages. According to Amazon’s strategy, the basic functionality of a platform must be self-service.
4. By becoming digital, you need to decentralize some IT features by distributing them to the various teams to create speed and agility. Finance, human resources, sensitive data systems and the cloud should be centralized systems.
5. Use teams of up to ten people (in Amazon called teams of 2 pizzas). These teams are more independent and can drive innovation faster. Set parameters to measure team effectiveness.
6. Do not let past beliefs or conventions guide the future, adapt to changes even while appearing inconsistent with past statements. For example Bezos in 2009 stated that Amazon did not need advertising, while now the strategy has completely changed in that sense.
7. Create an improvement plan for everything, take advantage of new technology to solve problems and continually improve processes. For example, Amazon has introduced the “Six Sigma” process that follows the DMAIC improvement cycle, that is, definition, measurement, analysis, implementation and control. Through this cycle, the use of technology and the help of employees focused on troubleshooting, Amazon has improved its parcel scanning, tracking and delivery system to excellence.