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From SCDigest's On-Target E-Magazine

- Aug. 17, 2015 -

 

Supply Chain News: Is Ruthless Culture Key to Amazon's Innovation Machine?


New York Times Article Paints Very Negative Picture of Work Inside Amazon; "Not the Amazon I Know" Says Bezos

 

SCDigest Editorial Staff

 

Fan or not, most everyone agrees Amazon.com continues to innovate and push boundaries at a mind-boggling pace.

An article in the New York Times last weekend painted life inside Amazon as cut throat and brutal, even as founder and CEO Jeff Bezos later wrote that the article "doesn't describe the Amazon I know."

The Times article says "At Amazon, workers are encouraged to tear apart one another's ideas in meetings, toil long and late (emails arrive past midnight, followed by text messages asking why they were not answered), and held to standards that the company boasts are 'unreasonably high.'"

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While Amazon seeks constant innovation, the concept of "failing fast" and accepting that some experiments just won't work in the end doesn't seem to have much hold at Amazon.
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It also says that "the internal phone directory instructs colleagues on how to send secret feedback to one another's bosses. Employees say it is frequently used to sabotage others."

The article says Amazon rejects many of the popular management bromides that other corporations at least pay lip service to and has instead designed "what many workers call an intricate machine propelling them to achieve Mr. Bezos' ever-expanding ambitions."

"This is a company that strives to do really big, innovative, groundbreaking things, and those things aren't easy," Susan Harker, Amazon's top recruiter, told the Times. "When you're shooting for the moon, the nature of the work is really challenging. For some people it doesn't work."

For those that can't adapt to this type of culture, it can be brutal.

"You walk out of a conference room and you'll see a grown man covering his face," one former Amazon marketing manager said. "Nearly every person I worked with, I saw cry at their desk."

Amazon made a small number of its executives available to speak with the Times, but the paper was able to interview some 100 former Amazon employees.

Here is maybe the most interesting point of all: the former Amazon employees described how they "tried to reconcile the sometimes-punishing aspects of their workplace with what many called its thrilling power to create," driving no doubt Amazon's whirlwind of innovation.

Many employees are motivated by "thinking big and knowing that we haven't scratched the surface on what's out there to invent," Elisabeth Rommel, a retail executive who was one of those permitted to speak to the Times.

Perhaps Amazon is only different by degree and not general direction, the Times partially suggests, with such trends as systems "that allow individual performance to be measured continuously, come-and-go relationships between employers and employees, and global competition in which empires rise and fall overnight."

The result: work environments that are more nimble and more productive, but harsher and less forgiving.

The culture is driven by CEO Bezos himself, who the Times says was determined almost from the moment he founded Amazon in 1994 to resist the forces he thought sapped businesses over time, such as bureaucracy, profligate spending, lack of rigor.

Bezos thoughts have been codified into the leadership principles, 14 rules inscribed on handy laminated cards. That is just part of a broader set of rules that have been developed for almost every type of interaction and process in the company.

Among the 14 principles, employees are to exhibit "ownership" (No. 2), or mastery of every element of their businesses, and "dive deep," (No. 12) or find the underlying ideas that can fix problems or identify new services before shoppers even ask for them.

Back when Bezos was more involved in hiring managers, he would tell them "It's not easy to work here." He would later sometimes point in the direction of Microsoft's headquarters building across the water from Amazon's own facilities and tell company managers he didn't want Amazon to become "a country club" as he perceived Bill Gates' company to be.

There is much focus on "frugality," but the primary focus is on relentless striving to please customers, or "customer obsession" (principle No. 1), with words like "mission" used to describe lightning-quick delivery of Cocoa Krispies or selfie sticks.

"My main job today: I work hard at helping to maintain the culture," Bezos said at a business conference last year.

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One part of that culture is Bezos' belief that harmony is often overvalued in the workplace and can stifle honest critique and encourage polite praise for flawed ideas. Instead, Amazonians are instructed to "disagree and commit" (No. 13) - "to rip into colleagues' ideas, with feedback that can be blunt to the point of painful, before lining up behind a decision."

The best decision is generally produced from this process, Bezos believes.

Delivery drones, Amazon's one hour Prime Now delivery service and much more are all the products of this marriage between intense debate and a laser focus on finding new ways to delight customers.

"A customer was able to get an Elsa doll [from the movie Frozen] that they could not find in all of New York City, and they had it delivered to their house in 23 minutes," Amazon executive Stephenie Landry told the Times, which says Landry still sounded exhilarated months later about providing the dolls in record time.

But Amazon employees are monitored on a continuous basis. ""The company is running a continual performance improvement algorithm on its staff," said one former Amazon manager.

Amazon links employee performance very tightly to the success of their assigned projects, whether selling wine or testing the delivery of packages straight to shoppers' car trunks.

Amazon employees are held accountable for a staggering array of metrics, a process that unfolds in what can be anxiety-provoking sessions called business reviews, held weekly or monthly among various teams. A day or two before the meetings, employees receive printouts, sometimes up to 50 or 60 pages long, several workers said. At the reviews, employees are cold-called and pop-quizzed on any one of those thousands of numbers.

Explanations like "we're not totally sure" or "I'll get back to you" are not acceptable, many employees said, the Times says.

There are many upsides to working at Amazon, the article says, including gaining significant responsibilities very early on, and a stock option plan that has continued to work out very well for employees for many years.

But there is a dark side too, such as pressure to race to be the first to answer email questions from managers to huge workloads and time spent on the job, marathon conference calls on Easter Sunday and Thanksgiving, criticism from bosses for spotty Internet access on vacation, and hours spent working at home most nights or weekends.

"One time I didn't sleep for four days straight," said one former Amazon marketing manager.

One manager had a new baby, and arranged with her manager to work 7 a.m. to 4:30 p.m. each day, pick up her baby and often return to her laptop later at home.

But her colleagues, who did not see how early she arrived, sent the worker's manager negative feedback, accusing her of leaving too soon.

"I can't stand here and defend you if your peers are saying you're not doing your work," the manager told her. She left the company after a little more than a year.

Other women said the Amazon culture is stacked against them. One woman says her manager told her that raising children would most likely prevent her from success at a higher level because of the long hours required.

Molly Jay, an early member of the Kindle team, said she received high ratings for years. But when she began traveling to care for her father, who was suffering from cancer, and cut back working on nights and weekends, her status changed. She was blocked from transferring to a less pressure-filled job, she said, and her boss told her she was "a problem." As her father was dying, she took unpaid leave to care for him and never returned to Amazon, the Times said.

Another woman who had breast cancer was told that she was put on a "performance improvement plan" — Amazon code for "you're in danger of being fired" - because "difficulties" in her "personal life" had interfered with fulfilling her work goals.

While Amazon seeks constant innovation, the concept of "failing fast" and accepting that some experiments just won't work in the end doesn't seem to have much hold at Amazon.

"The sheer number of innovations means things go wrong, you need to rectify, and then explain, and heaven help if you got an email from Jeff," one manager said. "It's as if you've got the CEO of the company in bed with you at 3 a.m. breathing down your neck."

All this and more leads to a lot of turnover, but Amazon is OK with this. It has a constant stream of talented job seekers knocking on its doors, and it's willing to lose quite a few good staff members to identify a much smaller pool of superstars, the Times says. Amazon is revamping its headquarters campus in Seattle to handle as many as 50,000 employees there, triple the number in 2013.

After the article was published over the weekend, CEO Bezos wrote an email to employees, saying that "The article doesn't describe the Amazon I know or the caring Amazonians I work with every day. But if you know of any stories like those reported, I want you to escalate to HR," encouraging workers to contact him directly via email if needed.

He added that "The article goes further than reporting isolated anecdotes. It claims that our intentional approach is to create a soulless, dystopian workplace where no fun is had and no laughter heard. Again, I don't recognize this Amazon and I very much hope you don't, either. More broadly, I don't think any company adopting the approach portrayed could survive, much less thrive, in today's highly competitive tech hiring market."

Our guess - the real answer is somewhere in between. What will happen when Amazon's fantastic growth eventually slows, as it must, will be quite interesting to see.

"Besides Amazon's silly valuation, it has been able to retain top talent through stock compensation," says financial analyst Michael Ranalli on the SeekingAlpha website. "This only works when the stock is rising," - and he believes Amazon is very overvalued and certain to see its stock price fall.

What is your take on this story on Amazon's work culture? Just the way it is today, or is it a problem? Will it catch up with the company some day - especially if the stock prices and option value slows? Let us know your thoughts at the Feedback button (email) or section (web form) below.


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