Keeping Up with the Pace of Innovation with the Cloud
By Richard Taylor, Head of Digital Innovation, Asia Pacific Japan, AWS
When I was a young boy growing up on Jersey in the British Channel Islands, I’d turn on the grainy TV to warm up so I could watch sports with my father and brother. FORMULA 1 racing was the most exciting sport for us, even though the cars often sped by faster than the camera operator and the technology could keep up.
Now, racing is covered in a far richer and more engaging way, especially since F1 launched F1 Insights powered by AWS in 2018, bringing data analytics as a live feed to my screens. Watching on my phone in Singapore, I love the real-time Car Performance Scores, which include thousands of data points streamed every second from every car on the track, giving me a much better understanding of where my favorite car ranks in the field – and what’s driving its performance.
It’s exactly this type of real-time information that businesses need to understand their performance, so they can make decisions rapidly and keep up with market changes. During the pandemic, we have learned that speed matters, whether you’re a digital native or a more traditional organization. As all businesses faced social distancing measures, those who survived the pandemic adopted new ways to do business, and they adapted fast using the cloud.
Some moved faster than others. Some enterprises with legacy systems seem resigned to moving slowly. Even today, I often hear comments like, “It’s just the nature of our size and heritage.”
We must debunk that myth. Speed is not preordained by heritage. Speed is a choice that any organization can make if it is prepared to harness the cloud. As a recent McKinsey article put it: “For CEOs, cloud adoption is not just an engine for revenue growth and efficiency. (The cloud’s) speed, scale, innovation, and productivity benefits are essential to the pursuit of broader digital business opportunities, now and well into the future.”
Many organizations can look for ways to change their culture and embrace speed, creating an environment that values urgency. In a culture designed for speed, people are actively encouraged to experiment and are rewarded for it. Although, flipping a switch won’t suddenly deliver speed – companies have to build muscle while they learn how to innovate at pace, all the time.
Amazon has been around for nearly 27 years, and to this day we maintain what we call a “Day 1” culture – approaching everything we do with the entrepreneurial spirit of being on the first day of your organisation. We do this by giving our teams autonomy, on the understanding that they operate within the guardrails of our culture.
We believe the more we can equip people to make high judgment decisions at all levels, the better off we, and our customers, are. We encourage employees to make high-velocity, high-quality decisions by setting the vision and context for teams. Since Amazon was founded in 1994, we’ve consistently operated based on three big ideas that every employee knows. The first is to obsess over customers. This is cemented in our mission statement to be “earth’s most customer-centric company.” The second is that if we focus on the customer it will force us to innovate – to look at new ways of solving problems on behalf of our customers. The third is to be stubborn in sustaining our long-term vision, while being flexible in how we get there.
As Jeff Bezos explains, “In a traditional corporate hierarchy, a junior executive comes up with a new idea that they want to try. They have to convince their boss, their boss’s boss, their boss’s boss’s boss and so on – any ‘no’ in that chain can kill the whole idea.” Systems and processes that identify, validate, and approve new ideas from within the business are invaluable in democratizing companywide idea exploration and driving experimentation in business as usual. For example, at Amazon, we make it easy for those closest to our customers to raise ideas for speedy review. Imagine a time-wasting process or one that results in a poor customer experience. People complain about it regularly, but they know that it can be so hard to implement change, that it’s not worth the effort. The problem is put in the “too hard” basket and no one says anything. Now, imagine actually rewarding teams for suggesting a fix. Imagine if the process was fast and painless and resulted in change. How many great ideas would happen every week?
Thinking Big and Acting Small
Thinking big is the hallmark of innovation. But, as we look to move quickly and embrace greater experimentation, we should also look to de-risk the process. This means recognizing that the most powerful innovations often come through simplification. One small, seemingly insignificant cost or time saving can drive enormous benefits for both companies and their customers when applied at scale. Thinking big also means starting big ideas with very small, reversible experiments. At Amazon, we look for “two-way doors.” If an experiment fails (as they often do), we can back out of the decision rather than being committed to moving ahead through a “one-way door,” which can be expensive and difficult to undo. This way, you learn quickly with very low stakes.
A great example of innovative thinking in the face of legacy technology is the fast-growing startup Pomelo Fashion. The Southeast Asian clothing retailer saw the potential of machine learning (ML) and decided to move away from a years-old algorithm that didn’t present its products cleverly enough. Using Amazon Personalize, the brand created customer experiences to improve the discoverability of new items for real-time personalized shopping recommendations. Using this technology, Pomelo Fashion generated 60% of product clicks across Pomelo’s online store through its new personalized recommendations as of November 2020, leading to a 15% increase in revenue from category pages.
Companies don’t have to bet their business on innovation, but they shouldn’t let legacy thinking hold them back. By actively empowering teams, clearing the path to “Yes,” and using small experiments, companies can build capability to promote high-velocity decisions – helping them operate at the speed of F1.
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