Investors Business Daily has a piece about Chris DeRose, co-author of "Judgement on the Front Line," who says "he knows why the No. 1 e-tailer succeeds: a customer-centric culture that lets all employees, from CEO Jeff Bezos on down, test new ideas that better meet customer needs."
It is all, he says, about experimentation.
Excerpts:
• "I think Amazon has a point of view that's deeply embedded in the company. It will win with the customer by doing a series of small bets that give it insight on how to build that long-term customer relationship. Bezos likes to say he never wants to reach a point where he has to make a 'bet the company' situation as a result of failing to be innovative for too long.
"Bezos encourages a 5- to 7-year vision. From the outset, he has encouraged employees to think long term, reportedly telling them to think about how they can impact the stock price in five years because nobody can meaningfully affect today's price."
• "Before an experiment starts, there has to be a defined customer need that it's addressing and there has to be an ability to measure the change. This reportedly goes back to an epiphany Bezos had in the mid-'90s when he realized the Internet provided the ability to measure customer behavior like never before.
"Like most companies, early executives at Amazon tended to argue about things like who should get prime real estate on the website or whether to use TV advertising. After the company committed to an experimental, data-based approach, they began testing these instead of debating them."
• "Experimentation is rooted in the customer-centric culture that Amazon has created. They work backward from the customer experience. Bezos has always been extremely sensitive to how everyone in the company impacts the customer experience. For example, early on he would go to the warehouses and talk to employees about how their work was one of the most tangible elements of the customer experience — do customers get the right product, on time. He symbolically leaves an open chair at some meetings to represent the 'customer's voice.'
"The insight that Bezos had was that customer preference didn't need to be subject to opinion or subjective interpretations of focus groups. Experimentation is rooted in a fact-based approach to innovating around building long-term customer relationships."
It is all, he says, about experimentation.
Excerpts:
• "I think Amazon has a point of view that's deeply embedded in the company. It will win with the customer by doing a series of small bets that give it insight on how to build that long-term customer relationship. Bezos likes to say he never wants to reach a point where he has to make a 'bet the company' situation as a result of failing to be innovative for too long.
"Bezos encourages a 5- to 7-year vision. From the outset, he has encouraged employees to think long term, reportedly telling them to think about how they can impact the stock price in five years because nobody can meaningfully affect today's price."
• "Before an experiment starts, there has to be a defined customer need that it's addressing and there has to be an ability to measure the change. This reportedly goes back to an epiphany Bezos had in the mid-'90s when he realized the Internet provided the ability to measure customer behavior like never before.
"Like most companies, early executives at Amazon tended to argue about things like who should get prime real estate on the website or whether to use TV advertising. After the company committed to an experimental, data-based approach, they began testing these instead of debating them."
• "Experimentation is rooted in the customer-centric culture that Amazon has created. They work backward from the customer experience. Bezos has always been extremely sensitive to how everyone in the company impacts the customer experience. For example, early on he would go to the warehouses and talk to employees about how their work was one of the most tangible elements of the customer experience — do customers get the right product, on time. He symbolically leaves an open chair at some meetings to represent the 'customer's voice.'
"The insight that Bezos had was that customer preference didn't need to be subject to opinion or subjective interpretations of focus groups. Experimentation is rooted in a fact-based approach to innovating around building long-term customer relationships."
- KC's View:
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Yet more evidence, I suppose, that I'm totally in the tank for Amazon. (That'll be the criticism from some quarters.) But I just think the foundations of the business model - putting the customer experience at the forefront of every business decision, thinking about long-term sustainable profitability instead of short-term, Wall Street-driven revenue, learning from and acting upon data, and being willing to challenge virtually every facet of the business model in the search for greater relevance - make a lot of sense.
