Strategic Discipline Blog

Is it possible to balance high performance in the workplace with a culture that provides personal liberty, freedom and work-life balance?

If you’ve not read it yet I highly recommend reading the August 16^th NY Times story on Amazon’s apparent flaws in its culture. 

The story provides many examples of extraordinary performance and employees exhilarated by their job, achieving production and goals they hadn’t imagined being capable of, whether they continued to work at Amazon or went elsewhere.  Yet on the other end of the scale is this quote from a former Amazon employee, “The joke in the office was that when it came to work/life balance, work came first, life came second, and trying to find the balance came last.”

Amazon is not afraid to admit its high performance environment with a recent recruiting ad message, “You either fit here or you don’t. You love it or you don’t. There is no middle ground.”

Depending on your perspective on People you will either leave the article feeling excited about the possibilities of gaining greater employee performance through the use of extensive data, competitive technology to measure and report each employee’s productivity, or disturbed by how it violates your emotional concern for humanity in the workplace. 

It’s difficult to separate Jeff Bezos from these perceptions especially when you consider his recent comment last year at a conference run by Business Insider, a web publication in which he is an investor, “My main job today: I work hard at helping to maintain the culture.”

It’s hard to argue with Amazon’s amazing success.  The articles provides the following to document Amazon’s rise as business icon:  Thanks in part to its ability to extract the most from employees, Amazon is stronger than ever. Its swelling campus is transforming a swath of this city, a 10-million-square-foot bet that tens of thousands of new workers will be able to sell everything to everyone everywhere. Last month, it eclipsed Walmart as the most valuable retailer in the country, with Today I’m going to go a little deep.  Enter some areas you may or may not be aware of, or even care about while discussing the issues that last week came up with Amazon and its culture.

Whether Amazon’s leadership and growth continues will be determined as Jim Collins noted in How the Mighty Fall and my recent blog Is Failing an Inside or Outside Job? – The Case for Culture by what goes on in the inside of that organization rather than any outside forces. 

Quantum Physics teaches that our thoughts are electrical, and feelings are magnetic.  The concept explains why your business requires emotional elements like Core Purpose and Values to marry with Strategic elements like a Strategy Statement, One Phrase Strategy, annual and quarterly plans.  Is that balance missing at Amazon?

I did a search on Google for Amazon’s Core Purpose.  Amazon Jobs only provided this: It's our goal to be Earth's most customer-centric company, where customers can find and discover anything at Amazon.com.  By our Gazelles definition this is not a Core Purpose.  Amazon may have one, I just wasn’t able to find it.

The New York Times articles refers to several of Amazon’s leadership principles or guidelines.  You can see the full list at Amazon: Our Leadership Principles.  To Amazon’s credit, they use these “Core Values” in their daily language and rituals, hiring, cited at meetings and quoted in their food-truck lines at lunchtime.  Indeed some Amazonians teach them to their children. 

Based on this it would be difficult to dispute Amazon puts its Core Values in Action.

Two articles you may wish to read that offer editorial on the original story, CEO’s are often the last to know, and Verne’s response in the Huffington Post, Why Jeff Bezos Needs an Army of Robots... Now!

Again depending upon your perspective you may applaud Amazon’s culture or be appalled by it. 

Competitive Environment

One of the aspects Verne Harnish particularly scorns is their system for providing anonymous feedback and their rank and yank employee review system.  With Amazon’s Anytime Feedback Tool, bosses know who sends comments, although identities are not typically shared with the subjects of the remarks. Because team members are ranked, and those at the bottom eliminated every year, it is in everyone’s interest to outperform everyone else.  Is this not a hostile and overly competitive environment to foster?

The story offers this tool or something close, may soon be found in many more offices. Workday, a human resources software company, makes a similar product called Collaborative Anytime Feedback that promises to turn the annual performance review into a daily event.  While we applaud this effort as noted in Another Look at Employee Performance Appraisals, a quote attributed to the methods for reviewing performance, “Amazon is where overachievers go to feel bad about themselves,” suggest criticism is more prevalent than recognition.    Workday should be noted is backed by Jeff Bezos. It’s one of his many investments.

The story provides the following on reviewing process which as Verne mentions in his article has been proven to be ineffective. Each year, the internal competition culminates at an extended semi-open tournament called an Organization Level Review, where managers debate subordinates’ rankings, assigning and reassigning names to boxes in a matrix projected on the wall. In recent years, other large companies, including Microsoft, General Electric and Accenture Consulting, have dropped the practice — often called stack ranking, or “rank and yank” — in part because it can force managers to get rid of valuable talent just to meet quotas.

Many Amazon employees put in excessive work weeks, logging as many as 85 hours a week.  Often they work holidays and are expected to work even on vacations.  The article notes that for women and particularly anyone who gets sick it can be oppressive.  Attrition rate is high according to a 2013 survey by PayScale, putting the median employee tenure at one year.  This ranks as one of the briefest in Fortune 500 companies.  Only 15% of Amazon employees have been at the company more than five years.  Their work environment has been called, “Purposeful Darwinism.”

It should be noted that unlike Google and Facebook, Amazon, offers no pretense that catering to employees is a priority. Google and Facebook motivate employees with gyms, meals and benefits, like cash handouts for new parents, “designed to take care of the whole you,” as Google puts it. Another contrast shows many tech companies race to top one another’s family leave policies — Netflix just began offering up to a year of paid parental leave. Amazon offers no paid paternity leave.

There’s a great deal to absorb here in the New York Times article. There’s no question that Amazon’s produces an amazing track record for growth.  Even the idea that thoughts are electric and emotions magnetic would lead one to understand that the culture at Amazon appeals to someone who is interested in growth, reaching beyond their potential, and a high work ethic.  The question is whether this cultural environment is sustainable. 

What questions does the article raise about your culture?

If a reporter interviewed your staff what would they discover?  Would you be pleased or appalled?

Positioning Systems uses several resources to provide feedback on employee performance and engagement.  We’ll review these tools, Gallup’s Q12 and the 360 Review next blog.