Innovative vision. We are always fascinated by this skill. It is one of the best business skills to have in our view. Does it mean you see everything? Certainly not. It does mean you have the ability to see what many cannot. And then act on these items. That why Amazon is the most innovative company, in our minds.
Lots of experiments and exploring. Innovation doesn’t work well without experimentation and lots of action. And Amazon is the best of the best, in our opinion.
Good executives are often the smartest guys in the room. Through years of experience solving tough problems, they learn to be masters of their craft and are able to mentor those around them. A great operational manager is a great coach, guiding others around them to achieve more than they thought they could.
Unfortunately, innovation isn’t about what you know, but what you don’t.. It requires you to explore, push boundaries and venture into uncharted areas in which there often are no true experts. You’re basically flying blind, which can be incredibly uncomfortable, especially to those who have had a strong track record of success in a structured environment.
For years, I’ve been fascinated by Jeff Bezos’ innovative vision and Amazon’s action and ability to execute.
We have written a lot about him and Amazon. (See our article on why the Wal-Mart e-commerce strategy won’t beat Amazon.) They are the most innovative company around in our humble opinion.
If you invent frequently and are willing to fail, then you never get to that point where you need to bet the whole company.
Jeff Bezos
Amazon is an e-commerce company in everything they do. They have developed all their expertise in full support of e-commerce. In fact, they now do e-commerce for many other businesses.
Amazon has existed in the e-commerce technology world since its inception. They think like a technology company and agile innovators, only innovative in everything they do, not just technology.
They are not afraid to try new things, and they can get things done quickly, thanks to the culture their CEO Bezos has instilled.
Probably the most persistent — and damaging — myth about innovation is that it’s about ideas. It’s not. Tremendous amounts of time and energy are wasted thinking up radically new ideas that never end up going anywhere. Middle managers never seem to tire of complaining that their ideas are ignored by the powers above.
The truth is that nobody cares about your ideas. They care about what problems you can solve for them. So if you want to innovate effectively, don’t go looking for a great idea so that you can dazzle others with your brilliance, look for a meaningful problem and get to work on solving it.
Let’s examine some of Amazon’s more creative innovations. And remember that innovation isn’t just about technology.
Amazon is most innovative … logistics and delivery
Amazon lockers
Let’s examine a recent e-commerce delivery innovation example that Amazon tried out, the introduction of Amazon lockers.
The concept is pretty simple. Amazon offers customers in select locations the option of having their package delivered to an Amazon Locker instead of to their street address.
When the package arrives, customers receive an email letting them know where to pick it up along with the code to unlock it.
Because most of the lockers are being placed in locations like convenience stores, often the customer can pick up their package 24 hours a day.
This is a great advantage for one segment of their customer base … the one that has trouble receiving their packages, either because they live in an apartment or condo that is difficult to deliver to, aren’t home to sign, or because they are worried that their package might be stolen.
But the motive for the experiment is not one based just on customer service alone, as companies like Amazon pay up to 20% more to have packages delivered to a residence.
So, delivering a package to a locker helps Amazon save money too … helping to offset the costs of installing and maintaining the lockers.
Fresh grocery delivery
After trialing the service for five years in Seattle (no one accuses Amazon of a lack of patience), they expanded Amazon Fresh to Los Angeles and San Francisco.
Prime Fresh members pay $299 a year and receive same-day and early morning delivery not only on fresh grocery items but also on over 500,000 other items ranging from toys to electronics to household goods.
They’re also partnering with favorite local merchants (the Cheese Store of Beverly Hills, Pike Place Fish Market, San Francisco Wine Trading Company, as examples) to provide the same convenient home delivery on a great selection of prepared foods and specialty items.
Their goal? To continue the methodical approach – measuring and refining Amazon Fresh – with the goal of bringing this service to more cities over time.
Amazon is most innovative … E-commerce applications
Amazon Web Services
Amazon Web Services (AWS) is a collection of remote computing services that together make up a cloud computing platform, offered over the Internet. The most central and well-known of these services are the simple storage service, and the elastic compute cloud (EC2).
In 2010, Amazon launched 61 new services and features. In 2011, that number was 82. In 2012, it was 159. In 2013: 280.
They are also expanding their geographic footprint, with ten current AWS regions around the world, including the East Coast of the U.S., two on the West Coast, Europe, Singapore, Tokyo, Sydney, Brazil, China, and a government-only region called GovCloud.
The development teams work directly with customers and are empowered to design, build, and launch based on what they learn.
Prime
Prime launched nine years ago: an ‘all-you-can-eat,’ two-day shipping for a flat annual fee. At that time, Amazon had one million eligible Prime products. This year, they passed 20 million eligible products. They have added new digital benefits – including the Kindle Owners’ Lending Library and Prime Instant Video.
Amazon is most innovative … online services
Prime Instant Video
Prime Instant Video was launched in 2011 to provide customers with streaming video on demand, analogous to books.
In 2011 with 5,000 titles, they’ve grown selection to more than 40,000 movies and TV episodes.
The Amazon Studios team continues to invest heavily in original content and will compete in the new TV market of the future.
How Sears Lost the Innovative Retail Recipe and Went to the Bottom
Fire TV
In the last month, the Amazon team launched Fire TV. Not only is Fire TV the best way to watch Amazon’s video offerings, but it also embraces non-Amazon content services like Netflix, Hulu Plus, VEVO, WatchESPN, and much more.
In addition to Prime Instant Video, Fire TV gives you instant access to over 200,000 movies and TV episodes available a la carte. As a bonus, Fire TV also lets you play high-quality, inexpensive games on your living room TV.
