How Your Business Can Benefit from Inovation at Amazon (2024)
Amazon has been dominating the business and financial news lately. From record setting stock prices to plans for testing drone delivery capability, Amazon is on track to fundamentally change how we shop for just about any product traditionally available in retail stores. After nearly 20 years of continuous improvement, founder Jeff Bezos is poised for innovation that rivals the automobile, the internet and cell phones in terms of what Amazon will do to change our lives.
So what can we learn from this remarkable journey of creative thinking and extraordinary marketplace disruption? After all, most medium and small size businesses don’t have nearly the financial resources to do what Amazon is doing. Maybe you don’t need the same level of resources. Maybe all you need to do is observe and act!
Recently, I was invited to tour the Amazon fulfillment center in San Bernardino, CA by my good friend and past client, Craig Kausen- President of the Chuck Jones Art Galleries and Center for Creativity. Even though my business does not include fulfillment, I was eager to see how Amazon managed to deliver my packages in the time it might take me to cruise the local shopping mail ( not quite but it’s getting close!)
What we saw was remarkable. In a massive 1.2 million square foot facility, we witnessed thousands of products being picked, packed and moved to delivery trucks at a rate hard to comprehend. As a business coach, I’m greatly impressed with organizations that have created working environments that produce efficiencies previously not thought possible. But, I’m not in the fulfillment business so what did I take away from this experience?
1.Serving the customer is their ultimate goal We all have and are trying to expand our customer base. How well do you know and understand what your best customer values most? In Amazon’s case, it’s the ability to shop in the comfort of your own home, get a quick delivery turnaround and feel the process was a great experience. This way, they remove the custom’s hesitation to buying things online that they might have felt more comfortable buying directly at a retail store. How good is the experience of doing business with your company? Do your customers feel so good about you that they no longer look at your competitors?
Take some time to objectively look at the experience you provide. Could it be better? Is it the best you can provide?
2.Creating an atmosphere for high performance standards Everywhere you walk in Amazon’s facility, you see messages about their philosophy of what they believe are exceptional workplace practices. These are not just mottos, they believe and live them! From continuous employee development to new idea generation, they stand behind their expectations by making their employees full partners in their quest to do better.
Does everyone in your organization know and understand what you believe and stand for?
3.Continuously looking for ways to do it better In my early years of working for much larger manufacturing companies, I was reminded of an old saying that goes like this; ‘if it ain’t broke, don’t fix it’. It referred to not looking for or working on things that are not broken or in need of repair. Amazon takes a different approach of continuously looking for ways to improve their processes, essentially breaking older less effective ways of operating. It’s a different mindset but one that says, there’s always a better way to do what we do. Staying at the top of your game and ahead of your competition means looking for ways to improve what you do, even at the smallest level.
What areas of your business are not up to today’s standards or are not working as effectively as they should?
4.Investing in technology Not all businesses need the same level of technical support. Many businesses that I have worked with, however, have abdicated any desire for even the basic level of computer support that would add huge levels of efficiency and cost reduction to their operations. If you are behind the technical curve, you’re not only putting your business at a competitive disadvantage but you alienate employee talent and customers who may want to be connected with businesses who employ current day practices. Amazon has taken technical capabilities to an extreme level in order to position their employees for highly efficient performance. This not only means allot to the employees but insures you get your favorite item shipped for $3.99!
What area of your business is being underserved by technology?
5.Consistency of operating processes A critical advantage employed by Amazon is the exactness of the processes they use to storage, select, pack, ship and delivery your purchases. In every area of the fulfillment center, they have figured out how to potion inventory, gather products and send them through the conveyor so that the operation runs smoothly. Fine tuning the way they ship product as well as having employees utilize job standards that promote high volume, lost cost results is what makes Amazon untouchable in this area. Smaller businesses from restaurants and copy centers to auto repair and CPA firms can greatly improve the quality of their products and services along with the satisfaction of their customers if their operating processes are well thought out.
How well do you do at providing the product or service your business offers? Are your processes written down? Do your employees utilize them to the fullest?
It’s very inspirational to see a large company operating at the top of their game. The workplace atmosphere is energized, the employees are committed and the demand for what they do keeps growing.
You can have the same effect at your business level if you just take notes from Amazon and incorporate innovation, standards, operating processes, technical support and an eye on what your customer wants and values.
As much as I’d like to think it’s a choice, it really isn’t. If you don’t do it, someone else will. Think Kodak!
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About the Author:
Steve Smith is an experienced and President of GrowthSource Coaching based in Orange County, CA. Steve works individually with business professionals who want to achieve top tier effectiveness in the organizations they run. Steve graduated from Frostburg State University with a degree in business management. In his spare time, Steve writes articles from a variety of business publications, travels with his wife on his motorcycle and cares for his adopted greyhound.
I'm Steve Smith, an experienced business coach and the President of GrowthSource Coaching based in Orange County, CA. With a degree in business management from Frostburg State University, I've been actively involved in working with business professionals to achieve top-tier effectiveness in their organizations. I have a proven track record in providing practical advice to solve challenges and capitalize on opportunities.
My depth of knowledge and first-hand expertise in business operations allows me to provide insights into the concepts discussed in the article about Amazon's dominance in the business world. Having recently toured the Amazon fulfillment center in San Bernardino, CA, I gained valuable insights into the workings of a company that has been at the forefront of innovation and marketplace disruption.
Let's delve into the key concepts discussed in the article:
Customer-Centric Approach:
Amazon's success is rooted in its commitment to serving the customer. The ability to understand and meet customer needs, such as the convenience of shopping from home and quick delivery, has been pivotal. The takeaway here is for businesses to evaluate and enhance the customer experience they provide.
High Performance Standards:
Amazon creates an atmosphere that fosters high performance standards. They prioritize continuous employee development and encourage new idea generation. Establishing a culture where employees understand and embrace the company's values is crucial for success.
Continuous Improvement:
Unlike the "if it ain't broke, don't fix it" mentality, Amazon constantly seeks ways to improve processes. This mindset of continuous improvement is essential for businesses to stay ahead of the competition and ensure they are operating at optimal efficiency.
Investing in Technology:
Amazon's significant investment in technology has played a pivotal role in its success. Businesses that neglect technological advancements risk falling behind competitively. Adopting current technological practices can enhance efficiency and customer satisfaction.
Consistency of Operating Processes:
Amazon's success is attributed to the precision of its operating processes, from storage to delivery. Small businesses can benefit from well-thought-out processes that improve the quality of products or services and enhance customer satisfaction.
The article emphasizes the importance of innovation, standards, operating processes, technical support, and understanding customer values. Businesses, regardless of size, can achieve success by incorporating these principles into their operations. It's a reminder that staying competitive requires constant adaptation and learning from industry leaders like Amazon.
Amazon.com's success is due in part to its innovative business model, which allows customers to buy anything from books to furniture to electronics online. The company has also been successful in its efforts to expand beyond its core retail business into other areas, such as cloud computing and streaming media.
Over the years, the company has introduced several other groundbreaking technologies, such as the Kindle e-reader, Amazon Web Services (AWS), and Alexa, Amazon's voice-activated assistant. These innovations have further solidified Amazon's position as a leader in technology and retail.
Amazon is one of the first retail companies in the world to use artificial intelligence (AI) and its subset – machine learning (ML) – to suggest products to customers. The Amazon recommendation engine, Amazon Go Store, and Alexa, the three most popular Amazon products are powered by AI and ML.
Amazon's metamorphoses over the years are evidence of innovation ingrained into culture. Bezos' philosophy has always been “Grow Big Fast.” From delivery-by-drone to AI stock management – innovativeness is the force behind Amazon's rampant and omnidirectional growth.
It helps redefine your product and service value, strengthen customer relationships, and create a distinctive space for you in the market. The benefits of innovation extend to all business models, enabling companies to stand out with unique offerings.
Amazon not only pioneers new devices and business models, but it also pioneers new approaches to the practice of innovation itself. One example might be called “data-driven, customer-led innovation.”
In short, the 'Day 1' strategy involves keeping the sense of dynamism and adventure that defines new enterprises, and avoiding the lack of responsiveness that can set in within established systems and business models over time.
Unlike Apple, Google, and Microsoft, Amazon is not fixated on a tightly designed ecosystem of interlocking apps and services. Bezos instead emphasizes platforms that each serves its own customers in the best and fastest possible way.
When we open a fulfillment center to prepare customer orders, we create 3,000 local jobs on average, providing a steady income to thousands of families in the area who then spend more at local businesses and inject additional vibrancy into the local economy.
In a business context, innovation is the ability to conceive, develop, deliver, and scale new products, services, processes, and business models for customers. Successful innovation delivers net new growth that is substantial.
In 2022, we launched our Industrial Innovation Fund, a $1 billion venture investment programme that supports emerging technology companies developing solutions in warehouse automation and supply chain innovation.
Beyond our own workforce, Amazon's investments have supported nearly 1.6 million indirect jobs in fields like construction and hospitality. We also actively work to help communities by responding to the urgent needs of reducing hunger and homelessness and investing in education for children and young adults.
Creativity goes hand in hand with innovation. And there is no innovation without creativity. While creativity is the ability to produce new and unique ideas, innovation is the implementation of that creativity – that's the introduction of a new idea, solution, process, or product.
Innovation plays a key role in introducing novelty to existing product lines or processes, leading to increased market share, revenue, and customer satisfaction. Sometimes innovation is used to upgrade the operating systems of the business or to introduce modern technologies for automation.
Introduction: My name is Wyatt Volkman LLD, I am a handsome, rich, comfortable, lively, zealous, graceful, gifted person who loves writing and wants to share my knowledge and understanding with you.
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