Innovation is about taking risks
Amazon Go has taken the Retail world by storm. Everybody is still in awe and trying to make sense of the project: “How could they possibly do it?” “What technologies did they use?” and the more businesswise reflections revolving around “Will it just work?” “Are they going to get the expected ROI or any ROI at all?” Some even seem to desire the flat failure of Amazon Go because “who is Amazon to try and disrupt the brick and mortar store after all?”
Well, nobody knows if it’s going to work out well or not, but I believe that’s not the whole point from an Innovation point of view. Maybe it will work and render the classic check out process obsolete all along, or maybe it will fail and Amazon will cancel the Go initiative. In any case, I believe a valuable insight here is that Innovation has a flip side of the coin: Risk.
Amazon is taking a big risk with Amazon Go, a risk of a size as big as the innovation it’s trying to put in place. Sure, it has the financials to support the project and it may not be such a big risk in that regard after all, but there’s more than a financial perspective here when you attach your brand to a test you PR so heavily.
Everybody talks about innovation and say they love it, that innovation is the growth of the future for a company, they say it’s indeed the future itself. Everywhere you ask business leaders will tell you that without innovation a company has little chances to keep pace with the world of today and tomorrow. So it seems everybody loves innovation but not everybody is willing to take the risks that come with it.
Innovation DNA and Company Culture
A good friend of mine is an Investment Advisor, and whenever people come to him seeking advice about big returns opportunities with low risk, he always says the same thing: low risks usually yields poor returns and big risks can yield big returns. There’s no silver bullet in investing and there’s no silver bullet in Innovation either: if companies aren’t bold enough to take risks and assume they can lose valuable resources trying out new things, they cannot expect to be innovation leaders.
That’s why Amazon is testing something as disruptive as Amazon Go, and the big Retail Players haven’t launched an experiment like this before (at least as ambitious and comprehensive, taking self check out to another level), even though they know the physical store better than any online competitor. It’s just that big innovations and big risks are at the very core of Amazon’s culture, and the same is not true about most of the classic retailers. The latter may be more worried about the negative impact in the P&L a failed expensive innovation project could cause, than in aiming high and disrupting the Retail Industry.
“Failure and innovation are inseparable twins”
Jeff Bezos says it in this GeekWire interview, so there’s no doubt that he believes in taking big risks in order to nurture some big and successful innovations within Amazon. By encouraging innovation and supporting risk taking, he is creating a DNA, a culture that fosters big innovations. On the contrary, if company leaders pay bonuses attached to performance measured just in P&L effects, they are not supporting big risk taking (or even risk taking at all), which makes it almost impossible for their companies to awe us in the near future with any significant innovation.
That’s the key takeaway for me in this story: everybody likes big innovations when they see them, but innovating big requires risking big and possibly failing big. That’s why, maybe, Amazon has come up with something like Amazon Go and other Retail behemoths haven’t. Amazon has the right culture in place for that to happen.
What do you think: is it mere coincidence that Amazon launched this kind of project instead of a big physical retailer?