I’m not going to do an “I told you so” (but I just did). Actually, I’m sharing a leaked recording that a very alert Insider Magazine scooped up, catching Amazon’s CEO Andy Jassy delivering a brutally honest and provocative challenge for employees to redefine the company.
What’s in a Name?
According to Insider, Jassy urged employees to band together as the company tries to get through an unusually challenging time. He said there’s a lot of work to do to make progress across Amazon’s existing businesses, new businesses, teams, and the company’s culture. That will take “many months” and some of the company’s moves will be “misunderstood.” But he promised employees that the progress they make will “redefine” Amazon and better position the company going forward.
Jassy’s coaching urged employees to work as a team, as it’s usually a “”series of things”” — not one big invention — that make companies grow.
Yes, he said “redefine.” From the relatively new CEO that would be a big “wow” for casual observers. Amazon operates on a vast, conglomerated playing field – so redefining it is a serious business. However, I recently wrote an article that predicts this radical move in terms of Amazon’s retail business. Walmart Checks Another Box that Amazon Can’t. It bears repeating that Jassy is hitting speed bumps that he inherited from his predecessor. The long and mountainous challenge facing him is how to grow out of being a distribution platform. The future of retail is a 21st century online and offline integrated platform including a multitude of product categories and services. Essentially, this is how archrival Walmart has been sprinting forward as Amazon has been “tweaking” its less than stellar strategic experiments.
Play It Once Again
As I have weighed in, Amazon has wasted the past several years and billions of dollars fiddling around with testing physical stores of all types and failing (a couple of Amazon Style stores are still breathing). It also over-predicted growth following the pandemic and retreated by shedding thousands of jobs and cancelling the planning and construction of unnecessary DCs. And Walmart marches on.
Here’s a lesson that keeps on giving: Visionary and genius entrepreneurs like Jeff Bezos can “parachute in” from some imaginary futuristic world that we common folks could not even begin to comprehend. They lay their magical “golden egg,” it hatches, and the world of finance goes wild. And if they’re lucky, they get sucked into the money funnel which quickly swirls upward, past Unicorn status, to, well, Amazon’s speed of light. But be careful, speed kills.
The real tricky thing for these entrepreneurs is to know when the meteor they are riding on is reaching the height where it needs to be reined in before it burns out. That means being disciplined, organizationally structured, and strategically planned for long term profitable growth. Timing is everything and if the entrepreneur is smart, he or she steps aside, eases into the board or leaves. If not, the brilliant, visionary business model can flame out as fast as it scaled. And there have been so many of those in this tech era we are living through. Whether or not Mr. Bezos stepped aside soon enough remains to be seen. His successor, Andy Jassy seems to be the professional businessman Amazon needs to define a new model going forward. We will watch closely for what his physical retail vision is once he stabilizes many wobbly parts throughout the rest of the enterprise.
Jassy Pulls No Punches
With Jassy’s very clear mandate to his employees, it should be clear to the marketplace that he understands it’s not business as usual. And this encompasses all of Amazon’s business lines. He was encouraging in his tone that while it will take many months, maybe longer, he said “if everyone works together as a team, Amazon will get through it stronger.” He also emphasized that while cutting costs was a necessity, (having laid off 18,000 workers and shutting down a number of long-term projects), Amazon would continue investing in areas of opportunity.
He said that “Amazon made sure to save the resources needed to pursue long-term, key strategic bets that could change broad customer experiences.” He mentioned a long list of investment areas including grocery; international markets; entertainment (music and video streaming); the Alexa voice assistant; personal devices; Zoox autonomous vehicles; Project Kuiper broadband satellites; and healthcare.
I must take a pause here to observe that grocery was the only retail entity mentioned as a long-term key strategic bet. He did not mention Amazon Style or any other retail model. However, Jassy did have this to say about his strategic bets: “The investment areas that I just mentioned is a breathtaking set of innovations that we’re pursuing. I don’t really know any other company that’s pursuing a set of innovations like that.” I wouldn’t bet on that Mr. Jassy . Are you watching Walmart? I assure you they have been watching Amazon and have capitalized on all of Amazon’s missteps and failed steps.
Every Employee Needs to Do Three Things
Jassy’s coaching urged employees to work as a team, as it’s usually a “series of things” — not one big invention — that make companies grow. He said every employee should do the following three things to help Amazon be successful:
- Focus: Amazon is not hiring as many people anymore. Jassy said with the focus we have with the workforce we have, “There’s so much that we can get done.”
- Be customer obsessed: Customer obsession has always been at the heart of Amazon’s culture, but it’s particularly important now. “These are uncertain and hard times. So, you have an opportunity to reprioritize and rethink what matters most for customers,” he said.
- Be an owner: Take ownership and be passionate about your work. He added at times of uncertainty, companies need to work closer as a team, stressing the need to be frugal to lower costs. “The competition is hard enough, and we need to work together as a team. Think about how we can be speedy and insurgent,” he said.
There is a challenging path ahead, as well as hard decisions to make and yet to be made, Jassy said. “And you know what, that will not be the first time it’s happened, and it will not be the last time it happens. If we focus squarely on delivering for customers and realizing, all of us as owners, that we all have a piece of making this happen, and being part of the solution, I’m quite confident that we’re going to deliver an immense amount and redefine what it is to be Amazon. I feel really strongly that our best days are unquestionably in front of us, and I look forward to making that happen with all of you,” he added.
This is great coaching and an example of rallying the team. But honestly, what does it mean? Sure, every organization needs to iterate and refresh to stay competitive and a step ahead of customer preferences. But a full-scale redefinition? That’s ambitious by any measure. Retail is just one part of Amazon’s puzzle, but in my opinion, the roadmap is sitting in front of them hidden in plain sight. Just drive no more than 10 miles from Amazon’s headquarters and Jassy will see the future of retail staring at him in the face, and he can thank Doug McMillon for the preview of things to come.