Amazon and Its Management Approach

January 6, 2015

I find that analyses of high-tech company management gyrations quite entertaining. Once a company is successful, does it not follow that other projects will be successful? Aren’t managers of high-tech wonders able to manage other businesses owned by their employer? I hear a Greek khoroos intoning, “True, true, true.”

Within the conventions of Greek drama as understood by one of my somewhat addled high school teachers, “Stuff then happens.”

Following Fire Phone Flop, Big Changes at Amazon’s Lab126” captures one of these moments in the Amazon melodrama, “As Profitability Remains Elusive.” (Will this become a CNBC reality show?)

The article explains that the Fire Phone was a failure. Okay, got that. The management fix is to shuffle some senior managers. The issue of having a 3,000 person research outfit is ignored, which is a Silicon Valley tradition—Hop over the underlying question, “Who was managing this operation from Amazon’s headquarters?”

Therefore, management change commences.

The most interesting part of the write up was this quote:

As Bezos has told employees there in the past, his goal is to make it so Lab126 can take a hardware product from ideation to market in just months, a cycle as ruthlessly efficient as the company’s retail operations.

The assumption that if one thing works (selling like Wal-Mart) then making hardware will work too. Barnes & Noble has demonstrated its acumen with what I call “the Nook cook.” Failures are like bad burritos. Reheating a bad burrito does not improve the burrito. Now Amazon is emulating Barnes & Noble and adding the zesty seasoning of assuming that success in one business automatically triggers success in another, unrelated business. Pizza Hut has a pretzel pizza. Amazon has a Nook Fire.

What’s next? Maybe Amazon should buy Yahoo and stir it into the mix.

Stephen E Arnold, January 6, 2014


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