Amazon: Overcome Key Organizational Hurdles Group 5: Patricia Martinez, Shavena Smith, Bryan Arias 10am Class

Chapter Overview Tipping Point Leadership The Pivotal Lever: Disproportionate Influence Factors Break through the Cognitive Hurdle Jump the Resource Hurdle Jump the Motivational Hurdle Knock Over the Political Hurdle Challenging Conventional Wisdom

Overcome Key Motivational Hurdles They face 4 hurdles Cognitive: waking employees up to the need for a strategy shift What factors or acts exercise a disproportionately positive influence on breaking the status quo? Limited Resources: the greater the shift in strategy, the greater it is assumed are the resources needed to execute it How can you get the maximum bang out of each buck of resources? Motivation: how do you motivate key players to move fast and tenaciously to carry out a break from status quo? What motivates key players to aggressively move forward with change? Politics: in most organizations, you get shot down before you even stand up How do you knock down political roadblocks that often trip up even the best strategies?

Tipping Point Leadership in Action How does an organization defy conventional wisdom to achieve breakthrough results while lifting employee morale? Ex: Amazon implementing Amazon Prime to give its customers a better experience compared to other retailers while working with employees to ensure that they are functioning as if it were their first day of work.

Disproportionate Influence Factors In every organization, there are people, acts, and activities that exercise a disproportionate influence on performance Overcoming a massive challenge is about conserving resources and cutting time by focusing on identifying and then leveraging the factors of disproportionate influence in an organization By single mindedly focusing on points of disproportionate influence, tipping point leaders can topple 4 hurdles that limit execution of Blue Ocean Strategy

Amazon’s Disproportionate Influence Factors Focusing on influencers is a smart way to influence change Since Amazon’s mission statement is to have the lowest prices, best available selection, and utmost convenience- Amazon breaks the status quo by being customer centric instead of profit oriented. To combat limited resources, Amazon takes on a small business approach Amazon motivates their employees by not becoming complacent Amazon has combated one of its potential roadblocks of international shipping by creating more advanced distribution centers

To achieve a strategic shift at low cost, focus on the extremes – the people, acts, and activities that exert a disproportionate influence on performance.

The Four Organizational Hurdles

Breaking through the Cognitive Hurdle In corporate transformations, among the hardest battles is to make people aware for a shift and agree on the causes. Positive stimuli reinforce behavior, whereas negative stimuli change attitudes and behavior. How can one break through? Examples: “Seeing is believing.” Child tasting icing vs child touching hot stove Meeting with disgruntled customers

Meeting with Disgruntled Customers In every company it is important to prevent customer dissatisfaction and reduce the amount of complaints For Amazon’s C.E.O., Jeff Bezos, he doesn’t tolerate failure in his company Having the managers meet with their most disgruntled customers Example: https://www.youtube.com/watch?v=x0kOv4HBJa4

Jumping the Resources Hurdle (Limited Resources) Does the company have money to spend on necessary changes? How do you get an organization to execute a strategic shift with fewer resources? Leaders concentrate on multiplying the value of resources they have. Hot Sports, Cold Spots, and Horse Trading

Hot Spots, Cold Spots, and Horse Trading Hotpots: Activities that have low resource input but high potential performance gains Coldspots: Activities that have high resource input but low performance input Horse Trading: Involves trading your unit’s excess resources in one area for another unit’s excess resources to fill remaining resource gaps

Jumping the Motivational Hurdle (Unmotivated Staff) How can Amazon motivate the mass of employees fast and at low costs? By providing benefits and incentives to its employees Increasing wages to $15 Providing free higher education programs for certain employees Training and educating all workers, particular those who are not full-time

The Three Factors of Disproportionate Influence Kingpins- The key influencers in the organization Fishbowl Management- Where actions and inaction are made as transparent to others as are fish in a bowl of water Atomization- The framing of strategic challenge

Knock Over the Political Hurdle Organizational politics is an inescapable reality of corporate and public life To overcome these political forces, tipping point leaders focus on three disproportionate influence factors: Leveraging Angels Silencing Devils Getting a Consigliere on their top management team Example: Amazon’s Future in New York

Three Disproportionate Influence Factors Angels - those who have the most to gain from the strategic shift Devils - those who have the most to lose from the strategic shift Consigliere - is a politically adept but highly respected insider who knows in advance all the land mines, including who will fight you and who will support you Example: Marty Singer

Challenging Conventional Wisdom Conventional theory of organizational change rests on transforming the mass Requires steep resources & long time frames Tipping point leadership takes a reverse course Transforming the extremes: the people, acts, and activities that exercise a disproportionate influence on performance