What kind of company is Amazon?

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amazonIs Amazon a Value Innovation Company?:

It has many of the hallmarks:

  1. Jeff Bezos founded the company July 5, 1994 and remains the CEO today.
  2. The vision and strategy have been clear and consistent for 20 years
  3. Bezos IS the innovation champion
  4. Has brought a totally new business model to the retail world
  5. Brings exceptional value to the consumer (Amazon’s Most Important Customer)
  6. Is the benchmark for ordering on-line (Make it as easy as Amazon)
  7. Is growing fast, net sales in 2014, $89B (#35 on the Fortune 500)
  8. Not afraid of developing and introducing new products.  Has had successes, e.g, Kindle and failures, e. g., the Fire smartphone.

Is Amazon a Prosocial Company?:

Alyce Lomax, a columnist and analyst for Motley Fool, defines a Prosocial Company as a high-quality company that takes care of its stakeholders and shows socially responsible attributes.  She manages the Prosocial Portfolio and recently decided to sell the Amazon holding.

Amazon_150221Why did Lomax sell?

Lomax said, “Amazon is a remarkable company in many ways, and I do believe that for the most part, it brings a lot of good to the world and to most of its stakeholders.  However, it’s failed to invest enough in an essential stakeholder: its employees.”

Amazon’s warehouse workers work hard for the money, and it’s not that much. These workers walk between 7 and 15 miles per day, and given picking quotas, those are by no means walks in the park. Employees’ productivity is tracked using handheld devices, so there is a stressful, “watched” element to this labor-intensive job.

A look inside an Amazon warehouse:

Amazon_Warehouse_150221

Jessica Hullinger, “13 Secrets of Amazon warehouse employees,” Mental Floss, January 23, 2015, 1:55pm has reported on the challenges Amazon workers’ face.  Read More

What does Amazon pay their workers?:

Lomax shares, “Amazon has stressed in the past that it pays 30% higher than retail employees. But CNN has pointed out the comparison should be with warehouse workers not retail employees. On this basis Amazon workers are paid the industry standard wage level for warehouse workers.”

Would Amazon benefit from re-inventing Order Fulfillment?

Fundamental to what Amazon does are Work Process and Work Flow.  Could Amazon reduce fulfillment costs by stepping back and looking at how an order is filled, shipped and delivered?

They are looking at delivery of groceries using trucks, using drones to deliver packages in outlying areas, and more.  Are these individual projects or key projects that are a part of their fulfillment strategy?

If they do an excellent job, could they also increase the wages of their warehouse workers?

What do think about Amazon?

  1. Is Amazon a Value Innovation Company?
  2. Is Jeff Bezos in the “Top 10” of the most innovative CEOs?
  3. What should Amazon do, if anything, regarding warehouse worker pay?
  4. Should Amazon re-invent Order Fulfillment?
  5. if you could give Jeff Bezos three pieces of advice, what would they be?

We’d love to hear from you.  Send an email to dick_lee@valueinnovations.net

Want to up your innovation game? Want to up your organization’s innovation game? Attending one of our Mastering Value Innovation Workshops is a great place to start. In 2016 we are going to change our approach. We will work with you to develop your own custom workshop that addresses your problems and you define the length and location. More information can be found in the Workshop Brochure.