Innovation Lessons: Why Amazon Is Crushing The Innovation Game

According to Forbes, Amazon is one of the five most innovative companies of 2018.

It only makes sense to grab a pen and note down innovation lessons from a company that’s sitting at the top. From Amazon Fresh and Amazon Music to Amazon Publishing and the latest service, Amazon Go, this company continues to produce the amount of product and services like no other has ever done. So what is Amazon’s secret and what innovation lessons can we learn from it?

Working backwards

One of the secrets to Amazon’s success in innovation lies in the process called “working backward”. Working backward takes the cue from Amazon’s leadership principle: Customer Obsession. It means leaders start with the customer and work backward. It is all about a visualization mechanism. “…They force a person with an inventive idea to get very clear on the objective and to describe it in a way that others can also grasp without ambiguity. The documents don’t just go into email boxes. Their authors present them internally with the kind of energy they would deserve if this were really the day the offering was launched.”

If the audience loves the idea, a manager with the power to allocate resources to develop the idea further, focuses on accomplishing everything to get there. It’s important to chase the initial vision and if there’s a change made to a document, it gets sent out to be revised once again.

Innovation lessons: It’s alright to fail…

…or better yet, Amazon uses failure as an asset. Unfortunately, failure is a sign of weakness in many other companies. In Amazon, failure is a sign they’re working hard to try new things. Failures are seen as experiments.

“At Amazon, employees obviously try to mitigate risk by using data. But when you are breaking new ground, some amount of risk is unavoidable. Ultimately, failures will occur. As Jeff ( Bezos, the founder, and CEO of Amazon) has explained, “Given a ten percent chance of a 100 times payoff, you should take that bet every time.” That means you should still expect to fail 90% of the time. And then turn that failure into a tool for other people to learn from.”

Everything that happens in Amazon, stays documented in specific books. Therefore, it’s easy not to repeat the same failure twice. It isn’t about who failed, but about what can be learned from it.

Innovation lessons: Innovation driven by variety

Amazon is involved in the variety of sectors, such as robotics, retail, movies, television, and devices. That leads to a variety of career possibilities for the employees, which keeps them motivated and engaged. Besides that, the variety of possibilities in Amazon is one of the main drivers of innovation.

“You don't have to be a lifer in a specific space here. So it’s not unheard of to have a retail team that includes people who used to work in AWS and Kindle. Employees can make a move because they want a new challenge and bring their diversity of thought, based on their previous history, to a new team. This cross-pollination brings new, great ideas to the table.” New ideas are key when talking innovation.

Amazon in the physical world

While other companies work hard to have a successful online business after years of being strictly physical, Amazon is doing the opposite. The king of e-commerce has brought innovation to another level in early 2018. With what’s called Amazon Go, the company has revealed a store concept as a combination of digital and physical experience. Amazon GO is a grocery store, currently available only in Seattle, where the customers can check out without using the cash register and the help of cashiers.

The store concept is seen as a revolutionary concept due to the use of several technologies, including computer vision, deep learning algorithms, and sensor fusion. Furthermore, customers can shop at Amazon Go after downloading Amazon GO app, which is automatically connected to their Amazon.com account.

“The ceiling of the store has multiple cameras and store shelves have weight sensors, to detect which item(s) a customer took. If a customer takes an item off the shelf, it will be added to the person’s virtual cart. If a customer places an item back on the shelf, it is “taken out” of the virtual cart.”

Hard to imagine? Check out the video below!

What can we learn from Amazon’s success

Good leaders pay attention to competitors but obsess over their customers. Despite its ever-growing strategy and the involvement in many sectors, Amazon always stayed focused on its customers. Furthermore, Amazon uses failure as an asset and an experiment. The road from an idea to innovation is a bumpy one and it always includes a lot of failures. However, the secret lies in embracing the downturns and learning from them. You might think being involved in so many different sectors might do bad for your business, but Amazon made it work. Innovation is driven by the diversity of possibilities and ideas.

Here at Ideanote we’re motivated by success stories such as Amazon’s. We’re already going crazy with ideas on how to improve our business, and it’s all up on our platform. Book a free demo now and let’s write about your company’s success next time.

There’s more where this came from! Check out some of our recent articles: We’ve discussed Innovation Strategy and How to Conquer Doubt.