The Amazon Innovation Day: What Amazon stand out to be different in many ways
The best thing about the AWS Summit had nothing to do with AWS. Rather, it was the story about Amazon’s innovation culture that really left a lasting impression. For the first time, Amazon conducted an ‘Innovation Day’ in the lead up to its AWS Summit in Sydney. During this half-day conference, Amazon discussed how its success is based on continuous innovation and re-invention of the parent company, Amazon.com.
‘I was always fascinated by the different work styles and cultures of organisations. While there are differences based on size, industry, and country culture, many aspects of corporate culture are similar’, said Bernhard Mueller, CEO foryouandyourcustomers Melbourne, who was on site at the Amazon Innovation Day.
‘It is always Day 1’. That is Amazon’s philosophy, as best described by its founder and CEO Jeff Bezos. A philosophy that forms a culture which fosters innovation at scale. A culture that allows for failing and succeeding – but it has to be fast. They are obsessed by providing the best possible experience to their customers. They utilise insights from data to make decisions, in every part of their business and where possible automatically.
Traditional organisations don’t work like that. Often, large organisations find it difficult to innovate at scale. Corporate hierarchies, policies, processes, politics get in the way. Employees – who are often the smartest people one can find – are trained to execute their role in the machine, rather than finding improved ways to add value.
The Amazon Innovation Day was literally ‘Day 1’ for Amazon, as it was the first event of its kind in that company.
Core Components of Amazon’s philosophy
Amazon aims to keep its innovation velocity by establishing small and nimble teams that operate under the ‘Day 1’ philosophy. Its core components were laid out in Jeff Bezos’ letter to Amazon’s shareholders:
- True Customer Obsession: Start and end your business model with the customer in mind. What can you do to excite the customer, give them a better experience? How can you understand your customer better? That mindset will lead to a culture that creates delightful customer experiences.
- Focus on results, not process: Organisations implement processes to become more effective. But sometimes that drives staff to focus on following the process correctly rather than ensuring that the right outcomes are produced.
- Make decisions quickly: As organisations grow, their complexity grows as well. That means each decision requires business units to be involved, more stakeholders to manage, more analysis to be done. That slows down the decision making process. Startups don’t have that problem – they can make decisions quickly. A high velocity decision making culture leads to better overall progress – and is also more fun. Tools that provide insight into data and allow efficient collaboration helps to make decisions quickly, as does an understanding on the impact of making a wrong decision. Often making the wrong decision leads to the overall better business outcome than delaying it.
- Embrace external tailwinds: Organisations that don’t embrace trends and tailwinds are probably fighting the future. And even if you can spot the trend, embracing it can be a challenge if it undermines your current business model (for a good case study on this check out the Blockbuster vs. Netflix case). The paradox is that large organisations have most resources available to harness these trends. By the way – the current trend is clearly around Artificial Intelligence and Machine Learning – a concept that will change the way we learn, live, consume, provide and work.
Bringing the philosophy to life
During the summit, Amazon presented case studies from their and Australian businesses that supported that philosophy. Successful innovations like Amazon’s 1-click purchase, their fulfilment automation through robots, Amazon Go – a grocery store without checkouts powered by AI (promising but still in preview), and the Amazon marketplace – a business model where Amazon allows suppliers onto their website which are in direct competition with Amazon’s own retail offering. They also showed that some experiments didn’t work well, like Amazon auctions. The key is to keep innovating.
Successful Australian organisations such as Xero, Atlassian, and Airtasker complemented that philosophy by showcasing how they are effective in innovating together with customers and the community in their respective fields.
The Amazon Innovation Day was literally ‘Day 1’ for Amazon, as it was the first event of its kind in that company. Amazon or AWS don’t always get it right or perfect – after all they advocate the concept of creating a Minimum Viable Product rather than a perfect solution – but with this content they were off to a pretty good start.