How to Innovate like Amazon: 7 Principles You Can Apply to Shake-Up Your Industry
- 7 mins read
Published on Friday 29th June 2018
Amazon opened its virtual doors over 20 years ago, and ecommerce is probably still wondering what hit it. Its founder (and currently the richest man alive), Jeff Bezos has continued to disrupt new markets while maintaining an outstanding level of customer service. It’s clear that Amazon’s phenomenal growth isn’t a fluke.
Bezos’ customer-centric approach, thirst for innovation, and willingness to go against the grain fuelled Amazon’s evolvement. But before we dive into what you can learn from Bezos – let’s go back to the 90’s…
“We see our customers as invited guests to a party, and we are the hosts,” Bezos has said. “It’s our job every day to make every important aspect of the customer experience a little bit better.”
Amazon launched as an online bookstore in 1994, a time when most people weren’t comfortable using their credit cards online (or the internet itself). Amazon was a hit, and it continued to expand its product range. And now, Amazon offers its customers more items than all of their country’s high streets combined.
Still looking to improve, Amazon is working on adding end-to end-logistics (including shipping), delivery trucks and drone deliveries to its ecommerce arsenal.
And that’s just 'Amazon.com'. So what else have Amazon been doing lately?
- Healthcare looks to be next on Amazon’s radar as it admitted its currently investigating ways to improve the cost of healthcare for their 840,000 employees.
- A new checkout-free convenience store, ‘Amazon Go’, is currently being trialled in Seattle.
- It was recently reported that AWS (Amazon Web Services) now powers 50% of the world’s websites.
- It recently acquired Whole Foods for $13.7 billion, a move that baffled journalists as they wondered why Amazon’s investing in offline retail (for a change)
Amazon may be loved by customers but it’s greatly feared by other businesses – so much so that Switzerland banned Amazon as they fear the damage it will have on their local economy.
So how did Amazon go from an online bookstore to one of the world’s most disruptive companies? Bezos has spoken openly about his approach and decisions that have shaped Amazon’s incredible scale and growth. His big secret? Customer service...
6 lessons you can learn from Jeff Bezos to innovate and deliver exceptional customer service like Amazon
1. Start with a bold vision
Why did Bezos name his company Amazon? Because Amazon is the biggest river in the world, and Bezos’ vision was to build the biggest store in the world. (Achieved...)
Long-term plans have always been integral for Amazon. Bezos believes this is essential to become a truly innovative company. Short-term plans will always leave you in reactive mode, playing catch up with your competitors.
2. Always put the customer first
Amazon’s mission statement is ‘To be Earth’s most customer-centric company’. So when drone deliveries are being planned, it’s not a case of ‘showing off’ – if drones mean customers receive their orders faster, then drones it is.
Putting customers first may sound like overly simplistic advice – but when it’s truly implemented, and you tap into what customers really want from you – opportunities for innovation will appear, which will add value to both your business and your customers’ lives.
3. Create a culture of experimentation
Experimentation shouldn’t be left exclusive to a handful of people; everyone should be involved as all employees at your company have a different day-to-day experience. There’s something to learn from every department.
Bezos accepts the fact that most experiments will fail. Still, experimentation is essential for Amazon; its good ideas are given the time and funding needed in order for them to succeed. ‘If you double the number of experiments you do per year you’re going to double your inventiveness’ – one of Bezos’ most popular quotes.
4. Embrace that innovation causes friction
Bezos has spoken about the dangers of becoming a ‘me-too company’. He once said ‘me-too companies have not done that well over time. So you need to invent and be willing to be misunderstood. Because all disruptors are inventors. And me-too companies are not inventors.’
Amazon famously went against the grain when it refused to hide negative customer reviews.
“When we pioneered customer reviews, it was incredibly controversial. I got letters from publishers saying, ‘You don’t understand your business. You make money when you sell things. Take down those negative customer reviews.’ We’ve never done anything of real value that wasn’t at least a little bit controversial when we did it. But if you want to be a pioneer, you have to be comfortable being misunderstood.”
5. View complaints as opportunities for improvement
The areas in need of improvement are often pointed out by Amazon’s unhappy customers. The company is dialled into what its customers are saying; they have their own report for it named WOCAS, ‘What our customers are saying’.
No feedback is left unactioned: all complaints are entered into their WOCAS report and sent to the appropriate department leaders, where they are expected to take action to fix the flaws that have disappointed their customers.
6. Take risks
Bezos left his well-paid position as vice-president at an NYC-based hedge fund to start an online bookstore during the internet’s infancy (risk...). Since then, risk-taking has remained in Amazon’s DNA:
- It went against publishers’ advice, refusing to hide negative customer reviews.
- It abandoned its niche as an online bookstore, choosing to diversify its product range and core offering.
- It launched its own video streaming service despite Netflix dominating the market with over 96 million paid subscribers.
- And we could list 100+ more examples
Amazon is well aware of how quickly other companies can disrupt their progress. Just like Facebook, Google and the rest of the world’s most innovative companies – Amazon doesn’t sit comfortably when they’re at the top, they continue to innovate to stay there.
7. Eat your own dog food
Stay with us... ‘eating your own dog food’ or ‘dogfooding’ as it’s known in short, represents the practice of using your own products. There’s a clear benefit to this: you’ll be able to understand your customer’s perspective if you’re doing what they do.
Jeff Bezos famously issued a mandate around 2002, which required teams to expose their data and functionality via service interfaces, and for all teams to communicate with each other through these interfaces. Direct linking, direct access to databases, and other back doors were prohibited. All of these service interfaces also needed to be designed from the ground up to be exposed to the world.
So did dogfooding work for Amazon? It did sure did: Amazon Web Services (AWS) is a massive commercial success, and now the company, once just an ‘online bookstore’ is also an industry leader in cloud computing – powering much of the web that we use.
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