5 Lessons For Work Amazon Can Teach Us
And you don’t have long to learn the them
Last week, Amazon announced that it was acquiring Whole Foods Market for $13.7 billion. This is Amazon’s largest acquisition, surpassing its 2009 acquisition of Zappos by many billions. Jeff Bezos reinvented retail and cloud computing and is working on space travel. Like his contemporary, Elon Musk, Bezos sees what others did not see (or were too timid to go after) and our world is being changed by his vision. He innovates by taking existing pieces and building his own puzzle. But you don’t have to be Bezos to use the Amazon lessons.
What we can learn from Amazon comes from a different place. It comes from Amazon’s approach to to the market, or more precisely owning the market. The lessons can be applied by individuals and scaled up to global firms. That may seem like a stretch. But, the lessons require changing your attitude about how to meet the needs of those who buy from you. Because, first and foremost, Amazon is about meeting the needs of its customers.
To start, we must get over a hurdle. Lawyers, and we can expand that to all who work in business, think they sell their services. But here is the secret: what we sell is irrelevant. Those people may be customers, clients, co-workers, or bosses. The only relevant thing is what people buy. People buy solutions. In Clay Christenson’s words, they hire solutions.
People have problems they want solved. They will hire the best solutions they can afford to solve the problems. If a lawyer has that solution, good for the lawyer. Today, the solution provider could be a consultant, accountant, or a technologist. The client will go wherever it needs to go to get that solution. That mind shift — from selling services to selling solutions — is the big hurdle and you better be prepared to jump it if you want to compete against the disruptors.
Five Lessons We Can Take From Amazon
We can (others have) write books on what we can learn from Amazon. But for today, let’s focus on five lessons that apply to anyone who wants to innovate. I’ve used the legal industry as an example of what Amazon could do if it wanted to innovate in professional services, but assume that it could pick any industry and bring innovation to it (check out fintech). That is the point of these lessons: it isn’t where you want to innovate, it is where the customer (or client) wants innovation.
Most people still believe that Jeff Bezos started Amazon with the simple idea that he could sell books over the Internet more effectively and profitably than others could sell them through bookstores. If you have followed Amazon for many years, you know that it did not make a profit for a long time and even then, it plowed most of what it made back into the business. Bezos did not have a narrow vision of the future, he wanted to own the future — at least the retail future (the original name was The Everything Store). That leads us to our first lesson: Don’t have a plan, have a vision.
Lesson One: Don’t have a plan, have a vision.
Lawyers, in fact most of us, go to work each day with barely a plan. Call it more of a tactical hope: at the end of the day we want to walk away with more money than at the beginning of the day. If your goal is to survive, then that tactical hope is a good one. If your goal is to thrive, you need more. You need a vision. That vision may be to have the most successful immigration practice in your community, to have the most profitable corporate law firm in your state, or to be the dominant law firm in the world. The vision is what drives you and sustains you through the tough times. It is the anchor you go back to when you have to make decisions. Without that vision, you are just getting by, day-t0-day.
Bezos had more than his “The Everything Store” vision for Amazon. He did something that confounded outside observers. Bezos did not let other’s constraints bind him. Each problem called for more than a solution, it called for a creative, novel solution. Today, we can see that DNA carried through in Amazon’s approach to every challenge. How do you get what the customer wants to the customer as fast as possible? If you can’t drive there, fly there. Amazon is building its own distribution system, which means anything from truck fleets, to planes, to delivery drones. And that leads to lesson number two: Don’t be afraid to go first.
Lesson Two: Don’t be afraid to go first.
We have all heard of the first mover advantage. Then we learned that first movers aren’t the victors, it is the second movers. Watch what the first guy does, avoid his many mistakes, and then go second. Bezos (and Musk, and Zuckerberg) blew past that advice. They want to be the first mover and jump so far ahead that the second mover doesn’t have a chance.
Now, we know that Bezos and Musk and Zuckerberg were not the first to do what they do. Each had someone go before them with ideas similar to their own. Being the first mover does not mean being the first person to have an idea. It means being the first person to run with the idea and not stop running until you are so far ahead no one can catch up, even if you stop to take a breath.
It is unlikely any of these innovators sat down and said, “Gee, I wonder what book readers/car drivers/college students want?” They had picked up a feel for their customers over time. They also knew what they wanted. They all wanted one thing, regardless of the solution they choose to provide. They wanted to overdeliver on their promises. For lesson three: Ask what the customer wants, then overdeliver.
Lesson Three: Ask what the customer wants, then overdeliver.
If your customers want electric cars, then overdeliver on those electric cars. Excel on the features or services your clients do want. Then, figure out how to pay for it.
Do not deliver services your clients don’t want. Professional services providers fall into this trap. And don’t overdeliver and expect your clients to pay or grant you some other reward. Find out what your clients value and then beat their expectations, but at their price.
Innovation is not for the faint-of-heart or those without conviction. Think of Thomas Edison — he didn’t give up after 100 ways to not make a light bulb, or 1,000 ways to not make a light bulb. He attacked making a light bulb. Which brings us to lesson four: Attack with overwhelming force.
Lesson Four: Attack with overwhelming force.
It is hard to innovate if you aren’t going after the prize. You have got to put everything into it. But, don’t mistake that requirement for risking everything. There is a nuance many people fail to catch. Have you heard the saying, “Trust, but verify”? In innovation, it is “risk all, but have a safety net”.
Think of it as a civilian application of General Colin Powell’s “overwhelming force.” Smother the problem with all the resources you have available to spend on it. Immersion, the risk of failure, and even time constraints, all have a wonderful way of bringing innovation to the forefront. Which brings us to lesson five: Sacrifice the present to win the future.
Lesson Five: Sacrifice the present to win the future.
In chess, it makes sense to sacrifice a pawn if the move is part of a sequence that gives you great board position. In business, the same rule holds true.
Amazon is buying Whole Foods Market on a down cycle for the grocery business. It is a large acquisition, which means risk. But, it is a calculated risk. Amazon can recover if it fails, which probably means for Amazon that it takes longer to succeed.
The Lesson You Won’t Forget
Of course, there is the lesson no one will forget. That is the lesson you learn when Jeff Bezos targets your industry. One morning Bezos wakes up, feverish, disoriented, and in this slightly hallucinatory state he decides to take on the legal industry. What might that look like? It won’t be drones delivering legal briefs, or robots delivering office supplies. But, it might look like something out of the digital age.
It will be data obsessive, not just driven. Every contact with A-Lex, every piece of information A-Lex can gather about you, will be housed in their data warehouse. They won’t wait for you to contact them, they will predict when you need legal services and contact you. Preposterous? Insurance companies already look out 18 months and predict who in their portfolios will die. Not “on average X people will die,” but who specifically will die.
Online dispute resolution is an area ripe for the plucking. eBay, Amazon, and others have ODR built into their systems. The ODR is only for their services. But, A-Lex offers ODR as an option at time of purchase anywhere, not just purchase from Amazon. Anyone can select A-Lex ODR through a program offered by Amazon that any vendor (whether it sells through Amazon or not) can offer. Have a dispute and A-Lex will help you resolve it in less than a month and at a very small cost.
Need a lease? The landlord asks you to log in to A-Lex where the landlord maintains an account for leases. Go through a series of questions, some specific to that landlord and some general. The software knows the state and the landlord’s risk preferences, and at the end it assembles the lease. It uses predictive analytics to customize the lease terms. Yes, this may seem discriminatory, but A-Lex works around that issue with its contracting-for-one logic. Instead of a dense legal document, you get a colorful brochure with pictures and clear English text.
The lease system is part of an online landlord-tenant dispute system. The lease is in the system and your lease payments go through A-Pay. With all the data it has captured, A-Lex can predict which leases will go sour and when. Landlords can step in before problems arise.
You are worried. How will the tenant know which landlord to trust? Check the A-Lex reviews. Not just reviews about the apartments (those are available elsewhere), reviews about the leases. If a landlord tries to overreach, it will show up in the reviews. If the landlord is a bum, then those one star reviews will highlight the problem. Does the landlord pursue frivolous lease claims? A-Lex will show the statistics: out of 1,000 claims pursued by the landlord, 512 went for the landlord, 200 for the tenant, and the rest were dropped.
What about automobile accident claims? Autonomous vehicles will reduce the number of accidents. But all those AVs will mean petabytes of data every time there is an accident. That is too much data to crunch as part of a regular products liability lawsuit. A-Lex will help out. With its standardized auto accident analysis package, just plug in the data from the car sensors and surrounding sensors (street, lights, signs, etc.) and AWS provides the computing power. Within minutes, you can view a reconstruction of the accident on your virtual reality goggles. Not a wireframe, a real reconstruction with 3D views of the streets.
Right now, many companies are doing 3D mapping of streets for the car manufacturers. Those maps have to be updated so the AVs will have the data they need to roam the streets. Virtual reality software is readily available.
The interesting thing is that none of what I have covered begins to scratch the surface of what could be done in the legal industry. Amazon has not entered the professional services area, but at $290 billion a year in the US alone,¹ the legal industry looks like a tempting target. How long do lawyers think they can hold off the world of digital change? What about other professionals? And on the flip side, how quickly will those who are digitally ignorant get closed out of the market?
Innovate With An Enthusiasm Unknown To Mankind
Amazon is not the perfect company. It is very aggressive in ways that may push beyond the boundaries at times. It has a mixed record on how it treats its employees. Many have argued that it used the tax laws to unfair advantage in the marketplace (something Amazon disputes). The story of Amazon comes with baggage, and we should keep that in mind. But that is not the point and we should not dismiss lightly the lessons we can learn from the company.
If you want to innovate, then “Wake up each day and attack the day with an enthusiasm unknown to mankind.” ² Take the tools you have around you (in abundance) and put them together in new combinations. Don’t let up. Innovate within your sphere — your office, practice group, team, and scale up. We all want the “one great thing” solution, but it doesn’t work that way. Amazon wasn’t an overnight sensation. It almost cratered many times. Bezos’ personality kept pushing it through. And, perhaps, that is the biggest lesson to learn from any innovator. You have to want it, bad.
¹ William Henderson, Professor of Law, Maurer School of Law.
² Football Coach Jim Harbaugh, University of Michigan.
About: Ken is a speaker and author on innovation and on the future of people, process, and technology. He is a Fastcase 50 recipient, a Fellow-Elect of the College of Law Practice Management, and a Medium “Top 50” writer on Innovation. He is an Adjunct Professor at Michigan State University’s College of Law and a Member of its LegalRnD Faculty. You can follow him on Twitter @LeanLawStrategy, connect with him on LinkedIn, and follow him on Facebook.