The Amazon Way

The issue for leaders is whether the benefits of productivity generated by treating employees 'the Amazon way' are sustainable. Understanding, of course, that longevity, in an algorithmically-driven high-speed trading economy, may no longer be considered by many a financially justifiable goal. JL

Joe Nocera comments in the New York Times:

For a data-driven executive, this kind of culture is appealing, because it maximizes the amount of work a company can wring from fungible human beings. The question Amazon’s culture raises is whether it is an outlier — or whether it represents the future of the workplace.

The best thing about Jeff Bezos, the founder, chairman, president and chief executive of Amazon, is that he doesn’t give a hoot what anybody else thinks. The worst thing about Jeff Bezos is that he doesn’t give a hoot what anybody else thinks.

Practically from the moment Amazon went public in 1997, Wall Street has pleaded with Bezos to generate more profits. He has ignored those pleas, and has plowed potential profits back into the company. Bezos believes that if Amazon puts the needs of its customers first — and no company is more maniacally focused on customers — the stock will take care of itself. That’s exactly what has happened. That is the good side of Bezos’s indifference to the opinion of others.

The bad side is the way he and his company treat employees. In 2011, the Allentown, Pa., Morning Call published an eye-opening series documenting how Amazon treated the workers at its warehouses. The newspaper reported that workers “were pushed harder and harder to work faster and faster until they were terminated, they quit or they got injured.”

The most shocking revelation was that the warehouses lacked air-conditioning, and that during heat waves, the company “arranged to have paramedics parked in ambulances outside” to revive workers who were overcome by the heat. “I never felt treated like a piece of crap in any other warehouse but this one,” said one worker. (After the exposé, Amazon installed air-conditioning in its warehouses.)

Last weekend, a lengthy front-page story in The New York Times examined how Amazon treats its Seattle-based white-collar employees. Although they have air-conditioning — and make good money, including stock options — the white-collar workers also appear to be pushed harder and harder to work faster and faster.

In the cutthroat culture described by The Times’s Jodi Kantor and David Streitfeld, a certain percentage of workers are culled every year. It’s an enormously adversarial place. Employees who face difficult life moments, such as dealing with a serious illness, are offered not empathy and time off but rebukes that they are not focused enough on work. A normal workweek is 80 to 85 hours, in an unrelenting pressure-cooker atmosphere.

Until last weekend, Bezos was unapologetic about the Darwinian work culture he created. “It’s not easy to work here,” he wrote in an early letter to shareholders.

According to “The Everything Store,” a fine history of Amazon by Brad Stone of Bloomberg Businessweek, Bezos liked to say that he didn’t want the company to become “a country club” where people went “to retire.” His point of reference was Seattle’s other tech behemoth, Microsoft, which devolved from a ruthless predator to a sluggish bureaucracy. That is exactly what Bezos doesn’t want to happen to Amazon. He wants it to always have the feel of a start-up, where the work pace is frantic and the pressure intense.

And you know something? Give him his due: It has worked remarkably well.

It’s worth remembering that Amazon is a first-generation Internet company; its peers, including Yahoo and AOL, are a shell of their former selves, even as Amazon has become ever-more important and powerful. Some of Bezos’s tenets — such as the importance of openly disagreeing, rather than smoothing things over — seem admirable. Everybody at Amazon is highly competent; the company doesn’t tolerate deadwood.Even when Bezos sent around an email last weekend about the Times story, he didn’t exactly apologize. He said that he didn’t recognize the Amazon The Times wrote about, and that some of the incidents were so callous they should have been reported to the human resources department. But he didn’t say they weren’t true. That’s because they are true.

The real issue Amazon’s work culture raises — for blue- and white-collar employees alike — is: How disposable are people?

A previous generation of Americans could count on a social compact; if you stuck loyally by a company, it would stick by you, providing you with a good job and a decent retirement. Long ago, loyalty fell by the wayside, and longtime employees learned that their loyalty meant nothing when companies “downsized.”

Amazon — and, to be sure, any number of other companies as well — has taken this idea to its logical extreme: Bring people in, shape them in the Amazon style of confrontation and workaholism, and cast them aside when they have outlived their usefulness.

For a data-driven executive like Bezos, this kind of culture is appealing, because it maximizes the amount of work a company can wring from fundamentally fungible human beings. The question Amazon’s culture raises is whether it is an outlier — or whether it represents the future of the workplace.

Of course, Bezos didn’t have to build Amazon the way he did. He could have created a culture that valued employees and treated them well. But that would have required him to care about what somebody else thought. Fat chance.