Why Amazon Is the Undisputed E-Commerce Growth Leader

Everyone wants to grow and innovate like Amazon these days. From meager beginnings selling books online back in 1994, Amazon is currently the largest e-commerce retailer and cloud computing platform in the world, and now dominates even the giant Walmart. In my role as a business advisor, I’ve long wondered how to pass their secrets along to other new ventures.

Recently, I saw some help in that regard in a new book, “Think Like Amazon,” by John Rossman, a former top executive at Amazon. He launched and scaled their Marketplace business, and now heads his own firm to help clients innovate and grow in this digital era. He offers over 50 guiding principles, distilled from his tenure at Amazon, to become a digital leader in today’s marketplace.

For those of you who don’t have time to read the whole book, here is a sampling of a few key points that should get you thinking in the right direction, and maybe just keep you a step or two ahead of your big competitors:

1. Add a platform that provides self-service growth. A platform is a business model and capability that can be accessed and customized by external users. With each outside participant, the platform grows stronger and smarter, and works better for internal users as well. The platform must capitalize on user-generated content and other people’s work.

2. Create and practice an obsession over customers. Make sure everyone knows it’s their job to maintain empathy and exceed customer expectations. Dive deep into every issue experienced by customers, and don’t delegate figuring out the root causes. Institute deep metrics measuring all aspects of the customer experience. Accept no excuses.

3. Don’t look for the short journey or a straight line. Jeff Bezos recommends avoiding the constant knee-jerk reactions to the quarter-to-quarter growth mentality that’s popular today. Compensate with shares rather than bonuses to make it happen. Strategize and evaluate your plans over a long period of time to make “bets” that other businesses miss.

4. Experiment, fail, rinse, and repeat. Digital success depends on moving quickly and measuring the impact of changes through tests. Senior leaders need to be personally involved in defining the tests and reviewing results and implications. Think big, but proceed with only small bets. Distinguish between test failures and poor execution.

5. Master the magic of small autonomous teams. Amazon is famous for their Two-Pizza.Teams (no bigger than two pizzas will feed), allowing an entrepreneurial mindset more autonomy, agility, and accountability. The business owner must be the leader of the team, written specs are required, and the team must be populated only with A+ people.

6. Raise the bar to avoid the biggest hiring mistakes. At Amazon, every position hire is assigned a “bar raiser” who is independent from the hiring team, and especially recognized for making good hires. This person assures that haste and manager bias are avoided, the interviews are systematic, and candidates fit well beyond immediate roles.

7. Stay hungry even when you are successful. Jeff Bezos always instills a sense of urgency by demanding business plans from business leaders on how they would disrupt their own lines of business. He tolerates no “country club culture” or “playing it safe” mindsets. He reacts quickly to slowing growth expectations and efforts to reduce risk.

8. Use artificial intelligence to reinvent customer experiences. Amazon targets the new machine learning technology to leverage his focus on customers. He deploys it in narrow specific processes to expedite decisions for customers (Internet of Things), and new ways to get to “yes” and eliminate the bureaucracy that forms as companies mature.

The author offers many more principles and actions that have allowed Amazon to become the digital leader they are, and can be emulated in your company as well. Customer and competitive demands are rising across all sectors and experiences. You too can set the bar higher, through constant iteration, innovation, and a relentless customer-first focus. Do what Amazon is doing.

Marty Zwilling

*** First published on Inc.com on 05/15/2019 ***

7 Keys To Exponential Growth Driven By The Whole Team

Many startups and entrepreneurs I advise still default to growing their business via the traditional top-down, order-taking culture. I’m convinced that you can’t stay competitive that way with today’s customers, and today’s employees. It’s time to push decision making down into the organization –insisting that the people closest to the customer and the markets learn and make the decisions.

I saw strong validation for this approach in the classic book, “Sense & Respond,” by Jeff Gothelf and Josh Seiden. They argue that successful organizations spend more time building and maintaining a learning culture of listening to customers, enabling their team to make decisions, and creating new products continuously. Here are seven key elements of the culture we both espouse:

1. Accept that you don’t know all the answers – show humility. Anything you or your team knows about the market today may change tomorrow. Don’t demand or assume immediate and certain answers. Foster a culture of constant dialog with customers, experimentation, and multiple pivots required to stay competitive and responsive.

2. Give the team permission to fail, and learn as a result. Experiments are how we learn, but experiments, by nature, fail frequently. If failure is stigmatized, teams will take fewer and fewer risks, and your business will fall behind. Practice blameless post-mortems to honestly examine what went well, and what should not be continued.

3. Foster self-direction and alignment to a greater mission. If your mission is clear, and the organization is aligned around it, self-direction takes root and delivers superior solutions. Team members will want to take personal responsibility for quality, creativity, collaboration, and learning. You just provide the environment and support for success.

4. Promote the honest sharing of information – good or bad. Never shoot the messenger of bad news. Don’t forget to listen carefully to the total message before responding. Ask questions without undue emotion, and always focus on the positive or possible solutions. No one learns from no communication, or misrepresentation of data.

5. Practice a bias toward action – not analysis paralysis. Constant debates and re-analysis of data are the enemy in a fast-moving and competitive marketplace. A thriving process culture today assumes that you will be making many small decisions, seeking feedback, evaluating the evidence, and then deciding once again how to move forward.

6. Define customer value as the only path to business value. Customer empathy is required today to maintain a strong market position in the face of global competition. Everyone from the CEO to call-center representatives must have a sense of what your customers are trying to achieve, what’s getting in their way, and how you can help them.

7. Build a team culture of collaboration, diversity, and trust. The best learning teams are smaller, diverse, and work in short, iterative cycles. There is no time today for lengthy, sequential work with hand-offs between specialists. People with different points of view, who trust each other due to social ties, collaborate well to positive results.

With these culture elements, organizations today are emerging and thriving, based on their improved capacity to sense and respond instantly to customer and employee behaviors. The alternative is another Eastman Kodak, who failed to keep up with the transition from film to digital cameras, or another Blockbuster Video, overrun by Netflix and streaming videos on the Internet.

More successful examples include Facebook, which continues to change and lead today, despite assaults from Twitter, Instagram, and others; and Tesla Motors, still leading the electric car market, despite repeated initiatives from the major auto manufacturers and other upstarts. We will soon see if they can hold that lead in the coming era of totally autonomous vehicles.

These winners, and almost every successful new startup, have successfully established a learning culture that customers, as well as employees, are flocking toward. But a cultural transformation doesn’t happen by default; it must be led, even though employees and customers want to work in the new way. Are you an active agent of this change in your company, or a continuing obstacle?

Marty Zwilling

Change Your Management Style To Meet Today’s Culture

Change is hard. But these days it’s required and inevitable. Yet, in my daily role as an advisor to entrepreneurs and small business owners, struggling to boost revenues, profits, and earnings, I still see too many managers falling back on command-and-control, a focus on weaknesses, and not enough time for people. The result is lost productivity and a poorly engaged work force.

For example, it may seem quicker and more effective to hand your service desk employees the store policy manual, and tell them to follow the rules, rather than spend time coaching them on how to really listen to customer feedback, and use their strengths to build customer loyalty. Most team members want to do the right thing, but may not have your insights or years of experience.

I just finished a new book, “It’s The Manager,” by Jim Clifton and Jim Harter, leaders at Gallup, who have assembled feedback from the largest study of its kind, including over 37 million people from businesses around the world. It says we still have a long way to go in improving workplace cultures, and moving up workplace engagement from the worldwide current dismal 15 percent level.

They provide abundant details and examples, but net out nicely the top six key changes in culture that I also see and recommend on a regular basis to business managers and leaders that I work with. These are changes in culture that we all need to recognize and adapt to, most clearly driven by the growing percentage of millennials and Generation Z, include the following:

1. Employees need a purpose as well as a paycheck. For a growing number of workers today, compensation is important and must be fair, but it’s no longer their primary motivation. The emphasis for these people has switched from just a paycheck to having meaning, and so should your culture.

For example, when John Mackey of Whole Foods made it clear to employees that his larger purpose was helping people live a healthier life, his team and his customers found a new excitement beyond groceries, resulting in growth and profitability that easily outpaced the industry, as well as awards as one of the best companies to work for.

2. Team members want development plus satisfaction. Just offering perks, like fancy latte machines and ping pong tables, does not create lasting team engagement. They want personal and career development. That means you need to pinpoint the right goals for each employee, develop a plan, and commit to taking their careers to the next level.

If you have an employee potentially ready for management, executive shadowing can be a great way to expose them to critical elements of other jobs, while they are still learning in their current role. It is also a great way for employees to more formally explore potential career opportunities internally, before they jump ship to a competitor.

3. Your people will expect more coaches than bosses. They demand to be valued as individuals, and coached to understand and build their strengths, rather than treated as soldiers and directed to march into battle. The best managers give targeted feedback in their areas of expertise and make connections to others who are better suited to the task.

4. They want ongoing conversations, not just annual reviews. With modern technology, employees communicate constantly with people who count, and expect their managers to do the same. Annual reviews alone have never worked as a substitute for regular feedback on things done well, and not so well. Meet team members on their own turf.

5. Don’t fixate on team weaknesses – capitalize on strengths. Gallup research shows that weaknesses almost never develop into strengths, while strengths develop infinitely. You need to recognize and understand weaknesses, but double-down on strengths. A strengths-based culture will also help you attract and keep star team members.

6. A job can no longer be treated as just a job – it’s your life. All employees spend a majority of their waking hours on the job. For their engagement, they expect support, relationships, appreciation, and satisfaction. With workers now at multiple locations, including home, office, and around the world, it’s impossible to separate work from life.

Even the best business strategies will ultimately fail without the proper business culture and great managers, to give employees what they want most – a great job and a great life. As a technologist, it took me a while to learn that managing people is a lot harder than managing technology, but much more satisfying in the end. I also found it’s never too late to start.

Marty Zwilling

*** First published on Inc.com on 05/10/2019 ***

7 Keys To Using Social Media to Kickstart Your Brand

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After a frustrating meeting with a small business client recently who didn’t “have time” for social media, I was surprised to find evidence on the Internet that up to one quarter of small business owners are still hesitant to invest time, money, and effort into a social media strategy.

They don’t realize that they are missing out on a great opportunity for “free” promotion, as well as taking a great risk by not listening to what customers are saying, and not monitoring or responding to undeserved challenges to their reputation.

The classic example from several years ago was United Airlines not staying tuned in to social media, resulting in a unrecoverable customer problem causing great damage to their reputation, escalating to countless articles, and even a book, “United Breaks Guitars.” On a more positive note, there is a wealth of evidence that social media has resulted in some big paybacks.

Of course, nothing is totally free, and I have heard the horror stories of relatively small companies finding thirty or more employees spending most of their time scanning and using social media for promotions, or engaging high-priced consultants who never seem to be able to show any real return for all of their efforts.

I recommend the following steps as a start for maximizing your own return. I recognize that some of these may seem, well, basic to our social media-savvy readers, but based on my own recent experience in the real world, there are still plenty of people looking for a place to start:

1. Research the use of social media by your customers. If your customers are consumers, especially on the upscale and younger side, social media is likely their number one source for brand decisions. On the other hand, if your business is selling commodities to government entities, social media may rightly be at the bottom of your list.


2. Choose the best social media platform for your domain. If your interest is in reaching business professionals, LinkedIn has by far the greatest potential. Snapchat is almost exclusively a young person’s hangout, but you will likely find consumers of all ages on Facebook and Twitter. For B2B environments, consider who makes the buy decisions.


3. Approach influencers and key stakeholders appropriately. Social media is not all about being social, or treating everyone casually. For serious customers and investors, treat them with respect and stick to topics that are interesting and relevant to them. Viral videos, personal anecdotes, and informal surveys would likely be counterproductive.


4. Integrate social media into your overall marketing strategy. Just like ignoring social media is not smart, relying on it totally is likely not an optimal strategy. Most businesses need a mix of offline and online marketing, promotions, loyalty programs, and community involvement. This required mix must be reviewed and updated as your brand matures.


5. Pay special attention to attract a strong first impression. It definitely pays to get some help with your first step into social media, since first impressions often become lasting ones. Jumping in haphazardly with poorly a focused message is definitely non-productive, and may harm your business. Do your homework before you begin.


6. Use business metrics and tools to tune your efforts. More social media activity doesn’t mean a higher return on investment. Start by getting familiar with social media analysis tools, such as Google Analytics, Snaplytics, and SproutSocial. Always gauge progress by business indicators, like customer acquisition cost and customer satisfaction.


7. Demand professional business skills and customer advocacy. The people who lead and deliver your social media content need to fully understand your business, and be able to make real decisions on behalf of your customers and your business. Customers today rate will your business by the quality of your social media listening and response.

Too many business owners still consider social media a fad for chatting with your friends, or keeping up with the news. In fact, it’s much more than that today, and has become one of the most important tools for every business to keep in touch with customers, and build a brand. As with any business tool, you need to use it correctly, and measure the cost against the return.

Marty Zwilling

*** First published on Inc.com on 04/25/2019 ***

7 Problem Solving Mistakes To Avoid In Your Business

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In every business, especially new ones, quick and effective problem solving is a critical skill. The problems you face are more complex and moving faster than ever before, and the consequences of a poor or incomplete solution can be costly to your business, and well as to your community, human health, and the environment. What we learn in school hasn’t kept up with the demands.

For example, there is no question that Theranos and Elizabeth Holmes faced a host of complex problems in their drive to offer a comprehensive blood test from just a finger stick and a single drop of blood. Yet few would have believed that problems could have brought down such a promising solution, as well as the reputation of the founder, despite a $9 billion valuation.

I found some real insights into today’s problem solving challenge in a new book, “Bulletproof Problem Solving,” by Charles Conn and Robert McLean. These authors have more than thirty years of experience in complex problem solving, including solution approaches, in McKinsey & Company, start-up companies, and many social and environmental organizations.

Based on my own thirty years of experience in large and small business, and advisory roles with new businesses, I support their summary of the common pitfalls that many business leaders experience in facing the problem solving challenges in the marketplace today:

1. Settle for weak problem statements, without root cause. Rushing into analysis with a vague problem statement is a clear formula for long hours and frustrated customers. You need clarity around the decision-making criteria and constraints, the time frame required, and an indication of action that will occur when the problem is solved, or not solved.


2. Asserting the answer based on bias, ego, or passion. Asserting any solution without proper validation in this complex world is a recipe for disaster. No matter what your conviction or experience (“I’ve seen this before”), the stakes are too high to try to force an answer. In this age of instant and total communication, you can’t fool customers.


3. Failure to break the problem into component parts. Only by first finding all the cleaving points that allow you to dissect the problem, will you likely find the most serious crux of the issue. Elizabeth Holmes never focused on how many false positive blood tests were sending people to the hospital, or she might not have minimized the problem.


4. Neglecting divergent views and team culture norms. Groupthink amongst a team of managers with similar backgrounds and traditional hierarchy makes it hard for anyone to see the real alternatives clearly. Every leader needs to make sure and listen to people with a diversity of experiences, who are open-minded, and have no ulterior motives.


5. Rely on an incomplete or outdated analytic tool set. Some issues can be resolved with “back of the envelope” calculations, while complex modern issues may demand more time and sophisticated new tools. For example, sometimes no amount of regression analysis is a substitute for a well-designed real world experiment with “big data” analysis.


6. Failure to link conclusions to a compelling action plan. Analytically oriented teams often say, “We’re done” when a solution is found, but don’t follow-through with a plan to communicate complex concepts to diverse audiences, and sell their action plan to stakeholders. Effective solutions capture the total audience with compelling actions.


7. Assuming each problem can be solved once and for all. Rarely is a problem solved totally the first time. Complex problems have a messiness about them that takes you back and forth between hypotheses, analysis, and conclusions, each time deepening your understanding. Expect your problem solving to be iterative and a learning process.

Every leader needs to adopt a systematic approach to problem solving and continually hone their skills. The authors present a seven-step approach that works for them, and has been proven across multiple business arenas. I recommend that you do your homework to find a system that works for you and avoids the pitfalls outlined here. The longevity of your business today totally depends on it.

Marty Zwilling

*** First published on Inc.com on 04/21/2019 ***

5 Ways To Kickstart Your Business Coaching Reputation

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I’ve always been a bit confused about the difference in a business context between a coach and a mentor. According to many pundits, a mentor shows you the right way based on experience, while a coach brings out the best in you, then let’s you find your own way. Based on my own experience on both sides of the fence, we can all benefit from either, and need the best of both.

As examples, even famous billionaire business leaders, including Mark Zuckerberg and Bill Gates, have admitted to having mentors (Steve Jobs and Warren Buffett). Many more, as detailed in a new book, “Trillion Dollar Coach,” by Google executives Eric Schmidt, Alan Eagle, and Jonathan Rosenberg, tout the value of self-proclaimed coach Bill Campbell in Silicon Valley.

Based on their eighty interviews with people that Bill Campbell worked with before he passed away a couple of years ago, these authors offer five specific lessons and action steps which I believe can help every entrepreneur and aspiring business leader, even if you don’t have time or access to a world-class coach every time you sorely need one:

1. Value people and make people feel valued. Bill urged leaders to get to know their people as people – with lives beyond work. Trying to develop that personal connection might not come easily for some of us, but in time it becomes natural. Plus, in my first manager role, I was even cautioned to avoid personal relationships with team members.
   
   Later in my career, I learned from a real coach that getting to know people outside of work was a great way to find what really motivated them – allowing me to better match their assignments to their interests, increasing productivity as well as satisfaction.
   
   
2. Give people the room to debate differences. Rather than settling for a consensus, the lesson from Bill is to strive for the best idea – starting with ensuring all ideas get heard, especially ones counter to your own thinking. Sit back and let people talk through options, intervening only to reinforce first principles and, if needed, to break a decision-making tie.
   
   One way to do this is to ensure that everyone in staff and team meetings has to voice a position on key issues, without interruption, followed by group debates without judgment. The leader assumes the role of moderator and supporter, rather than edicting a decision.
   
   
3. Build an envelope of mutual trust. Always establish your trust by being open, asking questions, listening to the answers, and giving candid feedback. A coach will honor people’s trust with loyalty and discretion, and demonstrate trust in people’s ability to succeed. Always set the bar high and push people to exceed their self-expectations.
   
   Of course, coaching only works with people that are coachable. The traits that make a person coachable include honesty and humility, the willingness to persevere and work hard, and a constant openness to learning. Build your team first with only these people.


4. Reinforce a “team-first” mindset. First and foremost, Bill proclaimed to be a coach of teams, not individuals. Peer relationships are critical, at all levels, and often overlooked. Seek opportunities to pair people on projects or decisions. With well-paired teams and peers, you get a great multiplier effect that is the key to staying ahead of the crowd.

When faced with a problem or opportunity, the first step is to ensure the right team is in place and working on it. Then you lead the team to identify the biggest element of the problem, the “elephant in the room,” bring it to the front, and get to the bottom of it.


5. Build community, inside and outside of work. The lesson here is to tap into the power of love. Love in this context simply means caring about the people around you, fiercely and genuinely. Invest in creating real, emotional bonds between people. All teams and the company are much stronger when people and their leaders are connected.
   
   Community building is similar to team building, but with a wider constituency. Examples would include sponsoring or orchestrating community events, sports, or travel. Bill was the example for all who knew him in helping people and sharing for the common good.

My conclusion is that Bill Campbell was both a coach and a mentor, and he understood which was required for each person he worked with. Every entrepreneur and every manager should strive to develop that same insight, and I assure you, it will make you the leader you need to be.

Marty Zwilling

*** First published on Inc.com on 04/19/2019 ***

8 Key Disciplines Are Essential To Scale Any Business

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As a mentor to many small business owners, I always caution them that you can never relax completely, just because your initial solution or product set appears to be getting traction, and the market buzz is positive. Unfortunately, your next stage of scaling the business is fraught with potential oversights that can lead to the downfall of even the best-laid business plans.

For example, one of the first home grocery delivery companies, Webvan, was so enamored with early traction in Silicon Valley, it raised and spent nearly a billion dollars and went public, before filing for bankruptcy three years later. After a big rollout, Pets.com loved initial traffic, so they spent $80 million dollars expanding before the bubble burst and they too were forced to close.

Don’t get me wrong, it’s always great to see that first surge of customers, but that’s just the beginning of your work. With the real data from that surge, you need to take a hard look at business model realities, cost of customer acquisition, inventory costs, and other key metrics. Here is my summary of the key focus activities of that challenge for every business owner:

1. Manage cash flow daily and plot a plan to profitability. That initial customer surge may loosen the purse strings of investors, so it’s easy to forget how quickly cash can be burned and how fast the spigot can be turned off. Even huge valuation increases will evaporate overnight when profitability is nowhere in sight, and you run out of money.
   
   
2. Control costs and adjust prices to maintain your margin. As transaction volume increases, delivery costs go up, returns increase, and quality problems can cost you plenty. Suddenly you face new overhead, with hiring, office space, benefits, and new advertising campaigns. Tight margins may get you in business, but no margin will kill you.
   
   
3. Follow-up on receivables and watch the terms of big orders. Too many startups I know have celebrated the success of big orders to Walmart or Home Depot, only to find they suffer from the long payment schedules and up-front inventory costs. Other customers routinely pay late, or only after they receive one or more prompts from you.
   
   
4. Document processes and metrics for economies of scale. As your business grows, you need employees who can execute quickly and consistently, with minimal training. That means written processes and measurements to maximize quality and productivity. Key metrics for scaling, such as customer loyalty, are very important after initial rollout.
   
   
5. Convert to working “on the business” vs “in the business.” Working on the business includes expansion strategy and planning, hiring, training, and managing employees. You can’t afford to close every sale, or handle every customer complaint. It’s time to build relationships with advisors, be visible in industry forums, and be a community leader.
   
   
6. Seek out strategic partners to expedite business growth. Organic growth takes time, and can only take you so far. Look for potential partners who are at about your size and growth level to complement your business strengths, and bring new customers sets, create production efficiencies, and share corporate responsibilities, or vice versa.
   
   
7. Ramp up your communication efforts and vehicles. If you want scaling to be a success, communication to all constituents must be done consistently and often. Calling everyone together for a weekly town-hall meeting won’t work as your business expands in size and around the world. It’s time to really focus on social media, videos, and email.
   
   
8. Start working on the next generation of your own product. It’s never too early to start figuring out how to obsolete your own product, before someone else does, and customers stop coming. It’s amazing how fast copycat competitors can spring up, as you attempt to scale, and how fast customers will switch to new innovations and lower prices.
   

Completing the initial product and generating that first surge of business are necessary, but not sufficient to build and sustain a long-lasting business. With that first wave of customers comes a whole set of additional demands on your time and energy. Change, hard work, and learning should be nothing new to you, so don’t let these new demands of scaling be your downfall.

Marty Zwilling

*** First published on Inc.com on 04/15/2019 ***