Amazon continues to be innovative not just in technology but with management thinking. Jeff Bezos has rejected the dictates espoused most vociferously by Wall Street mouthpieces and MBAs that encourage short term thinking and financial gimmicks which harm the long term success of companies.
Most CEOs and executives are too fearful or foolish to ignore what they are told they must do because Wall Street demands it. CEO’s and boards often ratchet up the poor management thinking by tying big bonuses to financial measures which are much more easily achieved by gaming the system than by improving the company (so companies get the games there boards encouraged through their financial extrinsic motivation focus).
Amazon does many good things focused on making Amazon a stronger company year after year. These innovative management practices seem to largely be due to the thinking of the strong willed founder and CEO: Jeff Bezos. Jeff was smart enough to see the great things being done at Zappos by Tony Hsieh and bought Zappos.
Jeff Bezos has added his letter to shareholders to Warren Buffett’s (for Berkshire Hathaway) as letters worth reading each year. In the latest Amazon letter he includes many worthwhile ideas including:
The second program is called Pay to Quit. It was invented by the clever people at Zappos, and the Amazon fulfillment centers have been iterating on it. Pay to Quit is pretty simple. Once a year, we offer to pay our associates to quit. The first year the offer is made, itâ€™s for $2,000. Then it goes up one thousand dollars a year until it reaches $5,000. The headline on the offer is â€œPlease Donâ€™t Take This Offer.â€ We hope they donâ€™t take the offer; we want them to stay. Why do we make this offer? The goal is to encourage folks to take a moment and think about what they really want. In the long-run, an employee staying somewhere they donâ€™t want to be isnâ€™t healthy for the employee or the company.
A third inward innovation is our Virtual Contact Center. Itâ€™s an idea we started a few years back and have continued to grow with terrific results. Under this program, employees provide customer service support for Amazon and Kindle customers while working from home. This flexibility is ideal for many employees who, perhaps because they have young children or for another reason, either cannot or prefer not to work outside the home.
The first point reinforces Dr. Deming’s words encouraging companies to do exactly that – pay for education even if it wasn’t related to the work the employee was doing or would do for the company. Still quite rare decades after Deming’s advice.