What Amazon's culture and practices can teach your company
Amazon has set a standard for workplace innovation that many firms aim to emulate. But experts advise executives to adjust insights from Amazon to fit their organizations' needs.
If you ask agile enthusiasts how big a team should be, they will likely point to the oft-quoted two pizza rule: Meetings should be limited to no more people than can be fed with two pizzas. The rule is often credited to Amazon CEO Jeff Bezos, and it's one that many organizations have taken to heart.
Executive coach Melanie Parish understands the appeal.
"There are many things that Amazon is doing really well, and they have a strong leader who believes in his position 100%," said Parish, author of The Experimental Leader: Be a New Kind of Boss to Cultivate an Organization of Innovators. "That's part of the seduction of the Amazon culture. [Bezos] presents it as if he's absolutely sure. And that gains a lot of traction."
Yet, as IT teams, CIOs and entire organizations co-opt ideas that have helped make Amazon a giant company in the digital era, they often find they can't replicate the same level of success.
That's not a surprise, according to multiple experts in corporate leadership, management and organizational achievement.
Amazon's culture has set new standards by cultivating a workplace prime for agility and innovation, which has resulted in the company's extraordinary growth. But executives elsewhere need a nuanced approach when they consider what pieces, and how much, of Amazon's culture they can or should adopt to drive success. They should recognize, too, that as much as Amazon's leaders promote their workplace ideas, workers have increasingly pushed back on the notion that everything is rosy.
"It all comes down to your company and your company's culture," said Prasad Ramakrishnan, CIO at Freshworks, a software company. "Yes, you need to foster innovation. Amazon, Facebook and Google all do that really well. But you don't copy them, you learn from them."
Amazon's culture offers business insights
John Rossman
There are various Amazon-born ideas that executives and workers seek to emulate, said John Rossman, a former Amazon executive and now managing partner at Rossman Partners, and author of Think Like Amazon.
"I've made a career in helping others answer the question: What can we take from a company like Amazon and [then] incorporate [it] into how we operate, what our strategy is and what our culture is?" Rossman said.
Rossman identified and explained some 50 Amazon concepts in four categories -- culture, strategy, business and technology, and approach and execution -- that could be used by others to drive their own organizations forward. These concepts can help solve the two most significant problems that companies face: how to accelerate and how to create more accountability.
Some ideas that companies find particularly valuable, Rossman said, include Amazon's focus on the long term as opposed to optimizing for the next quarter, and Amazon's self-professed customer-obsessed characteristic.
Jim Bodio
Many executives in the C-suite are interested in learning from Amazon, but so are other employees within most organizations, Rossman said. "Oftentimes, it's whatever team is really driving the what's-the-future agenda," he said. Corporate strategy and development leaders, as well as chief customer officers and chief digital officers, frequently turn to Amazon for inspiration on fostering workplace innovation, he added.
Stephen Rich
CIOs also pay close attention to Amazon and its ability to deliver successful technology offerings in a highly scalable, reliable and efficient manner, said Jim Bodio and Stephen Rich, managing partners at BRI LLC, a professional consulting service.
Observers should also consider the less rosy pieces of Amazon's culture, which have garnered criticism from employees, negative news coverage and scrutiny from other corporate leaders. Earlier this year, for example, some workers banded together as Amazon Employees for Climate Justice and publicly criticized the company's ecological impact. The company's warehouse workers along with employees at the Amazon-owned Whole Foods Market grocery store chain have complained about workplace conditions and what they see as unrealistic expectations. Amazon has addressed such issues, including in a shareholder statement that highlighted its efforts to lower its environmental footprint as well as its commitment to employees.
Then there's also Amazon's reputation for being a particularly hard-driving employer, which experts say can be a counterproductive approach for many employers to emulate when trying to attract, retain and motivate talent.
"It's a super-intense culture," said Lisa Jackson, founder and CEO of Corporate Culture Pros and co-author of Transforming Corporate Culture: 9 Natural Truths for Being Fit to Compete. "To work at Amazon, you have to have a certain type of personality. You have to be someone who can handle pressure and long hours and no work-life balance."
History of seeking inspiration
Executives have a history of borrowing ideas from successful companies, not just Amazon. For example, many enterprise leaders have seen high-performing tech companies move to unlimited vacation time and have, as a result, decided to follow suit.
A decade ago, many executives held up Google's management philosophy that encouraged workers to carve out part of their time for innovation, an approach called the "20% time" policy. Further back, executives turned to General Electric, Toyota and others for inspiration and insights on how to better run their organizations as well as foster growth and innovation.
Experts said looking to learn from Amazon and others about business ideas is a smart move.
"If you're a CIO and you are not looking at what other companies, especially your competitors, are doing then you're not doing a critical part of your job," said Jono Bacon, a community and collaboration consultant and author of People Powered: How Communities Can Supercharge Your Business, Brand, and Teams.
However, executives shouldn't take practices that work at other companies and adopt them wholesale, Bacon said.
"We shouldn't blindly follow what Amazon does; culture doesn't map like that. The key thing is to take that information and evaluate how relevant it is to your business and apply it to your business," he explained.
Prasad Ramakrishnan
Freshworks' Ramakrishnan takes that approach. His company has adopted ideas like hackathons to drive innovation but crafts them in a way that works to meet its own needs and objectives.
"What you need is to create an environment in the company where people can take smart risks and, once you do that, create terminology for you to use so everyone understands what you mean," he added.
Adopt and adjust
Executives who look to learn from Amazon, or any other company, should start by analyzing their own organization first, experts said.
They should identify bottlenecks and articulate the specific problems to solve, the areas to improve and the goals to reach. After they address these issues they can bring in best practices from outside. Companies should test outside policies or procedures and measure for success before they scale or adjust them to the specific needs of the organization.
"You have to start with a true look in the mirror and ask: 'What are the habits you have today?' And if you want to make faster decisions, 'How can you change?'" Corporate Culture Pros' Jackson said.
From there, it makes sense to study how Amazon and others address those issues and try to understand how their policies and procedures work for them and what pieces of their best practices are transferable.
For example, using stand-up meetings to spur fast decision-making works great for some teams and companies, Jackson said, but in other cases, that could slow down globally dispersed teams that meet virtually.
"Every CIO has to ask: 'What can we withstand in our organization and what's the way to make us more customer-focused and faster? What cultural barriers do we need to get over, and what [best practices] can be tweaked for our company's unique personality?'" Jackson said.
Some executives apply best practices borrowed from Amazon without trying to understand what the policies or procedures are meant to solve and how others support those policies and procedures to drive a goal, BRI LLC's Bodio said.
To illustrate his point, Bodio pointed to the two pizza rule. He explained that the concept doesn't speed decision-making and create accountability just because the teams are small, but rather because they're small and empowered and operate in an environment with other mechanisms to facilitate a team's success.
Companies that want to borrow the two pizza rule, or other business practices, from Amazon need to make other substantial changes in addition to keeping teams small if they want to cultivate the same team agility.
"You have to have a strong commitment to how you're going to get the value out of that change," Bodio said. "It comes back to being clear about what the goal is and understanding how the approach they took at Amazon or Google or anywhere else works."
