Three Strikes (AKA Stop Blaming Amazon For Your Problems)

I read Steve Olenski’s piece this week in Forbes, (do yourself a favor and read it if you haven’t already), where he highlights the results of this year’s GMRA retail executive survey. The insight that bubbled to the top was that execs were nearly twice as likely to be worried about the impact to their business of ‘organizational inertia’ than they were of Amazon.

Upon reading that, my first response was surprise; the second, a strange sense of familiarity. While Amazon is implicated every time there’s a story around retail sales declines, store closures, and the increasingly human-less (and somewhat terrifying) future of commerce, let's get this straight. They’re dominant because today’s retail ecosystem requires speed, opportunistic scale, investment in technology, and iterative data-based decision-making, something they have prioritized with every single market they've entered or business pivot they've undertaken. And what's more, Amazon didn't wait for permission to do any of these things. Traditional retail...not so much.

Inertia stands in stark contrast to this; it's a quicksand of fear and indecision. And without an honest, all-encompassing conversation around what ails an organization (this includes investments in people and decision-making processes), this doesn't end well. So let's talk about this thing called inertia. Where does it come from? And how can it be shocked out of the organizational system before it morphs into something far more sinister?

The First Offense: Complacency

According to our faithful friend Merriam-Webster, complacency is 'self-satisfaction especially when accompanied by unawareness of actual dangers or deficiencies.' When we think about what this means relative to the current retail environment, it's clear that there has been far too much comparison with peers, peers who are also out of touch with the technological and societal shifts underway. Compounding that problem is a market that still uses one-dimensional and outmoded metrics like same-store sales to gauge the overall health of the business. What about measuring customer lifetime value or investments in getting the right products to consumers faster? Looking for validation in all the wrong places leads you down the road of the good-enough for now, rather than built to last.

The Second Offense: Cumulative Error

As businesses grow, systems have to be put into place to ensure that decisions are vetted through the lens of strategic goals and constraints. Without a doubt, lacking these checks and balances, things can go haywire quickly. But what happens when there are so many steps in the decision-making process that good ideas end up a game of telephone? Big companies should be the places where big ideas thrive and get the right resources to bring them to fruition. But in reality, big retail has largely become beholden to and bogged down by their antiquated systems, rather than the other way around. Perhaps it's a trite metaphor, but big retail is the herd, and players like Amazon and the digitally-native are the pack. Biology tells us very clearly who survives that hunt.

The Third Offense: Correctness

How is it that some organizations make innovation look so easy? Look, no one starts out by saying, 'we want to be mediocre and never challenge the status quo,' but plenty end up in that very spot. And you'd be hard pressed to find a company that hasn't at least attempted to bring new ideas into the fold, but few get it right. Innovation is more than a talking point, it's about operationalizing the process. You have to empower leaders at every point in the organization to push back even when ideas are weird and make everyone uncomfortable, and on the other side of the coin, you have to give employees the tools to build ideas that can ultimately be executed upon. Moreover, innovation underpinned by deep customer insights and investment in technology ensures its best chances of survival and success.

So stop blaming Amazon for retail's woes; this is about our collective willingness to make the big change.