For years, Amazon has been the lighthouse for customer obsession because of its unique approach to sustainable and continuous experimentation and innovation. As organizations are looking to become more adaptive, creative, and resilient, tech executives should explore the best practices Amazon deploys to build differentiation and drive growth.
Amazon’s Approach to Innovation
Author: Forrester Research principal analyst Dan Bieler
Culture sets the tone for organizational structures, types of technology, management techniques, and processes. And diversity and inclusion are key enablers of innovation success because they help drive new perspectives and fresh ideas. Amazon’s approach to innovation relies on a set of methodologies, concepts, and tools that stretch from culture to process to technology:
A customer-obsessed culture sits at the core of Amazon’s approach to innovation. Corporate culture matters as it defines how an organization reflects on itself and how it tackles the challenges of permanent change. Corporate culture must be open and flexible enough to adjust to continuously changing customer expectations, market landscapes, and technology innovation. At Amazon, customer obsession, long-term thinking, eagerness to invent, and the drive for operational excellence form the cornerstones of its culture.
Amazon approaches innovation with a global framework of principles.Amazon’s Leadership Principles set the framework for Amazon’s innovation environment. These leadership principles are not only part of every process at Amazon, but they frame its underlying corporate DNA. A major task is to balance innovation creativity with process development. However, Jeff Bezos also points to the risk that “the process becomes the proxy for the result you want. You stop looking at outcomes and just make sure you’re doing the process right.” Hence, principles — and processes — are continuously evolving.
Amazon has a toolbox of concepts to support its innovation process. The most important concepts are about “working backwards,” which drives any process change through the lens of the customer. Defining who and how users will benefit before settling on what needs to change is the starting point. Then writing narratives, building single-threaded teams, focusing on input — not output — metrics, and distinguishing between two-way versus one-way door decisions are the next steps. Finally, hiring creative builders via the “bar raiser solution” and keeping “day one thinking” alive helps to make that innovation sustainable.
Learning from Amazon’s Approach
Of course, not every firm can be like Amazon. For many organizations, Amazon’s approach contravenes much of what counts as consensus for how business is traditionally done. And still: Tech executives should investigate the concepts that guide Amazon’s approach to innovation. There will be elements of great relevance for your organization. You can learn from and embrace these elements to fundamentally rethink your own approach to innovation. Read my recent report Learn From Amazon’s Approach To Innovation And Experimentation to learn more.