Jeff Bezos is too busy making money to worry about whiners.
My wife and I finished putting up our Christmas tree yesterday and sat down for a nice glass of wine and a football game. After the game ended (way to make it happen, Denver!), we kept watching the CBS station we were on already and stuck around for 60 Minutes. The top story of the night was a Charlie Rose interview with Jeff Bezos, CEO of Amazon. In it, Bezos outlined Amazon's growth strategy and talked about what was in store for the online super-seller. Yeah, I know, I'm the "You're Not Amazon" guy, but I do think a lot of what Bezos had to say was worth listening to and repeating.
When Rose asked Bezos about what Amazon is, I wondered if that was a stupid question. Everyone knows Amazon; once the best place to buy books and retail shopping items, the site is now a "we've got it all" powerhouse delivering digital services, fashions and even groceries. But Bezos took Rose's question as more of a "what is Amazon made of" and produced a really thoughtful answer.
- Customer Centricity - "Putting the customer at the center of everything we do," Bezos said, and he meant it.
- Invention—Amazon keeps coming up with new ways to impress and amaze. The company created the Kindle and changed the face of publishing. Now, they're creating content you can watch on demand.
Those were the two strands of DNA that Bezos suggested were the makeup of the retail juggernaut. Isn't "customer centricity + invention" the formula for innovation?
Much gets made of "Innovation", with a big "I." Consultants talk about it, CEOs beg for more of it, and employees are tasked with trying to understand what they ought to be producing when "Innovation" is the end-goal. But as Jeffry Pilcher wisely put it on Twitter:
"People whine all the time about a lack of innovation in banking, but there is certainly no lack of consumer frustrations. Getting teams together to 'innovate' is like an ad agency having a creative brainstorming session without a specific client, focus or purpose."
Amazon knows that happy customers are crucial to their success. Their profits aren't through-the-roof—Bezos insists that reinvesting the company's income into new growth areas is more important than packing a punch on Wall Street. As he put it:
Jeff Bezos: In the long run, if you take care of customers, that is taking care of shareholders. We do price elasticity studies. And every time the math tells us to raise prices.
Charlie Rose: But why don't you do it?
Jeff Bezos: Because doing so would erode trust. And that erosion of trust would cost us much more in the long term.
Amazon wants to achieve one goal: make every customer a repeat, loyal customer, one that trusts Amazon implicitly.
How does Amazon make this happen? It reinvests its profits into faster delivery, deeper customer understanding and more services that satisfy customers' desires.
And, one might argue, it ignores the drawbacks.
Of all the great things Bezos said in the 60 Minutes interview, the one that stuck with me (so much so that I dashed to a post-it tablet to scribble down the quote) was what he said about disruption. Charlie Rose asked a pointed question: is Amazon too aggressive in its pursuit of market share, in its eagerness to disrupt the status quo?
Bezos' reply bowled me over:
"...you know, people can complain about that, but complaining is not a strategy."
What a line. What a truth it is. There are plenty of people out there complaining about disruption in print media, an area Bezos showed an interest in earlier this year when he purchased the Washington Post. But does complaining increase the sale of newspapers? Nope.
There are plenty of people complaining about the competitive advantages of having no front-facing stores to stock and running everything from a Willy Wonka-esque warehouse. Does that put more people back in line at the retail stores? Nah.
There are plenty of people that worry about new methods of delivery and the turmoil that faces the modern-day postal service. Does that make everyone go back to stamps and brown paper packages? No.
Complaining is not a strategy. Making customers' experience better is. Last night on 60 Minutes, Bezos unveiled the next thing people will be too busy complaining about to counter.
So Much Droning
Drones. They're shaping our understanding of technology, of flight, of warfare, of espionage, and pretty soon, of delivery.
Bezos pulled back the curtain to show Charlie Rose something Amazon thinks will be ready to work in a few years—delivery drones. Little quad-copter robots, delivering nearly 86% of the goods Amazon ships, inside of half an hour.
It was at this moment that I came to realize two hard-to-believe pieces of information:
- Jeff Bezos is going to change the world
- A lot of people still watch 60 Minutes
The latter of those revelations came within two minutes of the big reveal. The social media world went crazy… half with amazement, half with a sense of humor, all in skeptical disbelief of the next phase of Amazon delivery. Immediately after, I began to read all of the speculative drawbacks of a drone delivery program.
Most people came to the conclusion that shooting down the drones with a rifle was a quick way to snag some swag. Some wondered whether or not you'd have to worry about packages being dropped mid-flight, leading to massive head wounds. My wife posed an interesting question, "How do you deal with airspace safety issues? Won't the government balk?"
The more I read about the drawbacks, the more amazed I was that Bezos was so eager to reveal this next step. Yes, there are drawbacks and considerations. Yes, people will try to screw with a good thing. But don't you imagine this has already come up for the innovators at Amazon? Sure it has. If not to this degree, it certainly will be a meeting around a table this morning as the online responses come pouring in to Amazon's millions of databases.
Think for just a minute about the problems this solves for Amazon instead of the challenges it presents and you realize this is right in line with their customer-centric, inventive strategy.
- 86% of Amazon's product offering can be carried by one of these drones. Isn't it frustrating that, in order to get free shipping, you have to buy a minimum amount of goods? I'd imagine that problem dries up pretty quickly when a shipping order never has to touch the back of a truck.
- And speaking of trucks, imagine how many trucks save on gas and stops when the itsy-bitsy stuff is carried by quad-copter.
- 30 minute delivery? Yes, please. I could theoretically forget an AV connector or a charger on my way to the office and have it show up in half an hour, dropped right at my feet by my friendly delivery bot.
Shorter delivery times. Smaller, more frequent purchases. Less money spent on the delivery process and a reduced carbon footprint. Who loses here?
Amazon's not sitting around grousing about "why"...they're busy coming up with "because" and, as a result, they're pulling down $118,000 every minute of every day.
There Are No Amazons in Credit Unions, But...
...that's not the point. It's not about the money—it's about the mission. Amazon wants to shorten the time between "order placed" and "order delivered" and to offer a wider array of products that suit customers' needs. Why can't we do that?
Here's the secret: We could. If we wanted to. Size isn't a factor. Scope isn't a factor. The only thing that matters is whether or not you've got people in your organization who understand the value of trying something new.
Linda Bodie at Element Federal Credit Union in Charleston, WV was one of the first in the financial industry to offer a remote deposit capture product. She and her tech team (which was one other person) came up with the technology and put it to work. Element managed to beat almost every major player—in banks AND in credit unions—to the punch.
I should probably also mention that Element Federal has a whopping two branches and serves right around 4,700 members.
To hear Linda Bodie talk about the RDC application they developed, you begin to wonder why credit unions five times the size can't get a grip on innovation, with a little "i." It's really as simple as seeing a need and solving for it. And if one of the biggest players on the Internet isn't sweating an above-average stock price, a group of not-for-profit financial providers shouldn't second-guess a decision to invest in the kinds of products and programs that improve the financial lives of members.
The three questions I'd be asking my "innovation team," were I in charge of such a group:
- "What could we make that would really help out our members?"
- "Who is it going to anger, and why?"
- "Is the value we get out of solving question one less than the amount of blowback we'd get out of question two?"
The online world has changed retail and banking alike. Customers and members depend on online services and the virtual branch to get things done. Maybe a few of them are as fascinated by our "philosophy" as we are, but chances are, they're just trying to live their lives with as little waiting and as little interruption as possible.
Making things better for members is our job. If that comes at the expense of the well-established approaches we've taken, that's just too bad. Complaining isn't a strategy.
Jimmy Marks had to very seriously talk himself out of ordering a year's supply of paper towels, deodorant and toothpaste via Amazon Prime. He ordered a bunch fancy pens and pencils instead.