Thursday, May 2, 2013

Jeff Bezos Gets Customer Experience - But What About Employee Experience?

Image courtesy of Cramo Communications
Two weeks ago, I wrote a post about Jeff Bezos' latest shareholder letter and his commitment to, or obsession with, his customers. One of the responses I got to that post was from Micah Solomon, who suggested that it would be equally valuable to review how Amazon treats its employees.

In response to Micah's note, one of the things I looked at was the situation at Amazon's Lehigh Valley warehouse, where employees were subjected to unbearable working conditions in the heat of the summer. Conditions were so bad that people were taken away in ambulances to receive medical attention for dehydration, heat exhaustion, and more. The Morning Call, a Lehigh Valley newspaper, has kept tabs on Amazon employees in the area and how they are treated; they have a section of their site devoted to stories about Amazon.

While those events occurred in 2011, as recently as February of this year, there was an issue with the way employees were being treated in Germany. A similar story comes from a British warehouse.

The issues reported in Lehigh Valley, Britain, and Germany occurred with warehouse (fulfillment center) employees. A factor to consider in these scenarios is that vendor partners were involved, whether it was to provide the talent or the security. This begs the question, does Amazon not appropriately vet its partners? Is Amazon responsible for the experience these partners provide? Yes.
  • Amazon has a responsibility to contract with reputable partners who treat their employees well - and who provide services that meet Amazon's standards.
  • If Amazon doesn't hold their partners to their own standards, then they are as culpable as the partner.
In an e-commerce world, is employee experience as important to customer experience as it is in a physical, brick-and-mortar retail world? On its own, yes, the employee experience is always important. But thinking of the impact on customer experience, in a world where human interaction is really limited to a rare customer service call (I've never called Amazon, though I've been a customer for a long time), service that is often circumvented by proactive systems and great policies... what then? Note this:
  • Employee experience is always important! 
  • Employee experience, frontline or behind the scenes, always drives customer experience. 
  • Employee experience unleashes passion and innovation that creates that wonderful customer experience. 
  • For those employees that can't see it, make the connection to help them understand their impact on the customer experience, of course!
But I digress...

I reviewed Amazon's shareholder letters from 1997 through 2012. Mr. Bezos doesn't devote much time to the employee experience in these letters, but he does talk about hiring and hiring the right people. I appreciate that and have no qualms about that, but just like customer acquisition is expensive, so is employee acquisition; hence, heavy focus should be place on retention.

Here's a smattering of what he's said about employees over the years in his shareholder letters:

1997: The past year's success is the product of a talented, smart, hard-working group, and I take great pride in being a part of this team. Setting the bar high in our approach to hiring has been, and will continue to be, the single most important element of Amazon.com's success.

It's not easy to work here (when I interview people I tell them, “You can work long, hard, or smart, but at Amazon.com you can't choose two out of three”), but we are working to build something important, something that matters to our customers, something that we can all tell our grandchildren about. Such things aren't meant to be easy. We are incredibly fortunate to have this group of dedicated employees whose sacrifices and passion build Amazon.com. 


1998: It would be impossible to produce results in an environment as dynamic as the Internet without extraordinary people. Working to create a little bit of history isn’t supposed to be easy, and, well, we’re finding that things are as they’re supposed to be! We now have a team of 2,100 smart, hard-working, passionate folks who put customers first. Setting the bar high in our approach to hiring has been, and will continue to be, the single most important element of Amazon.com’s success.

During our hiring meetings, we ask people to consider three questions before making a decision
(I've abbreviated):
  • Will you admire this person?
  • Will this person raise the average level of effectiveness of the group they’re
    entering?
  • Along what dimension might this person be a superstar?
 ... We intend to invest in teams, processes, communication and people development practices. ...

Can you believe it? In 15 years of letters, that's it. Technically, he repeats this message when he adds the 1997 letter to each year's letter, but that's not the same thing. He does briefly acknowledge and thank the employees for their hard work in a few letters, but it's nothing more than half a sentence or a word acknowledging the employees in the same breath as processes and systems. Keep in mind, he does a fabulous job of verbalizing his obsession with customers and the customer experience. I don't want to take away from that. You can just feel it when you read the letters. But...  employees are important, too.

He talks about hiring, which is really important, but what about the things Amazon is doing for its employees after their Day One? What's the culture? According to Jeff Bezos: "Our culture is friendly and intense, but if push comes to shove, we’ll settle for intense." Define intense.

What do employees say about working at Amazon? For that, go to Glassdoor and Indeed for employee reviews. Glassdoor ratings are average, but I think if we cut those reviews by role and/or by country, they will vary greatly. My unscientific review proved to fit that hypothesis. Indeed offers forums for people to ask questions about working conditions, etc., and this particular string about Amazon's culture shows that Fulfillment Center employees have no kind words about working conditions; even a developer has some harsh words, but closes with:

"Some of this might sound harsh but the fact is that most of us love what we do - we're always creating new and awesome things, get to see our work in the wild and feed off of each others enthusiasm and energy. The technical side of Amazon is not for everyone but if you're passionate and good at what you do, have had some measure of success and are a alpha-type personality, you'll do fine. In fact, there is quite a bit of attention put on hiring to make sure you fit all these criteria because, like I said, Amazon is definitely not for everyone."

Not for everyone.

Hiring the right people is key to delivering the right customer experience, but it's also important to achieving employee engagement and to having a great employee experience.

What does Amazon say about the employee experience? What do they tell recruits? Despite the fact that Jeff Bezos makes little mention over the years about the employee experience, Amazon does devote a few pages to what it's like working at Amazon, including their values, which they call Leadership Principles, and a page about Working at Amazon. This is a recruiting video about working at Amazon:


Is a relentless pursuit of customer experience excellence OK at any and all costs? Or is this what it means/takes to be "customer obsessed?" What do you think of their latest employee patent that "facilitates improvement in the results of human performance of tasks" but is apparently also about not paying people for unsatisfactory work?

I'd love to hear from Amazon employees. What's your take on the employee experience at Amazon?

To promote cooperation and team work, remember, people tend to resist that which is forced upon them. People tend to support that which they helped create. -Vince Pfaff

14 comments:

  1. You're right and this is a very thoughtful post. It makes we wonder about how Zappos operates as part of the Amazon mothership.

    But by the same token, we need to take all merchants to task about where their merchandise is sourced and how those employees are treated. There are sweatshops in Bangladesh that make clothes for WalMart, Sears, etc. Are we prepared to look at everyone and are we prepared to vote with our wallets?

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    1. Parissa,

      Thanks for your comment. Good point about Zappos. Something tells me they have kept their culture and kept it separate from Amazon; it's what they're known for.

      Good point, too, about sweatshops. In today's social world where word about this type of treatment can spread faster than wildfires, we could certainly all quickly vote with not only our wallets but also with our tweets, blogs, etc. Companies can't hide this from their customers any longer.

      Annette :-)

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    2. Zappos actually maintains a great deal of autonomy within the Amazon super structure. I can't remember exactly, but I believe this was part of their acquisition deal.

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    3. I think you're right. I recall hearing that was the case when the deal was done. Everyone's big concern was that Amazon would kill the Zappos culture, but the reassurance was that Zappos would operate separately.

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    4. Thanks, Parissa, for sharing this article with me today: There Is No Place To Hide http://www.mediapost.com/publications/article/199655/tk.html#axzz2SXSJs1YT. It's a pervasive issue.

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  2. There is a difference between the factory or warehouse workers and customer-facing ones. Employee satisfaction is definitely important for the delivery of better customer experiences for customer-facing roles. But many companies treat the factory or warehouse workers as machines, with little interest in employee satisfaction or working conditions because it's not visible to the customers (unless of course the wrong product is shipped or the product is broken but, QA processes limit these cases).

    Amazon isn't the only company doing this. While Apple Store "Genius" employees are engaged, I don't think I can say the same for those sad factory workers in Shenzhen, China assembling Apple products. It's not to say the conditions there are worse than at any other factory (they are probably even better) but few customers know or care.

    The point is that while it doesn't affect directly the interaction with customers, workers' conditions affects the company image, which is ultimately part of the customer experience. Worker's conditions are part of some people's value system on which they base a choice to buy from a company or not. Unfortunately few companies make this transparent. But there's a differentiation opportunity for companies who care about all employees to make that part of the value proposition. And for those who don't, the word eventually get out and they become accountable anyway.

    Sadly, the truth is that many people will prefer overlooking worker conditions in order to get a product cheaper. Everyone knows big-brand-name running shoes are made in sweatshops. But most people wear them proudly. It's all about customer demand. And if things are to change, there is a lot of work to do in customer sensitization. Until then, companies that care about the conditions under which their products are made (like those providing "fair trade" coffee) will get sensitized customers' business and respect, although probably with less margin.

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    1. David,

      Thanks for adding to the conversation. Great point about worker conditions impacting the company image, which ultimately impacts the customer experience and purchase decisions (for some).

      To your point about how frequently this happens, here's an article that came out over the weekend in The Huffington Post called 10 Popular Retailers With Dark Labor Histories http://www.huffingtonpost.com/2013/05/04/retailers-sweatshops_n_3196850.html?ncid=edlinkusaolp00000009#slide=2401656

      Annette :-)

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  3. Annette, an interesting thought.

    My personal (maybe unsubstantiated) belief is that the customer experience and the customer experience go hand in hand.

    Clearly that is not always the case at Amazon

    Does that mean that my belief is flawed?

    James

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    1. My belief is also that the employee experience and the customer experience go hand in hand. I don't think the belief is flawed. What I do think, to David's point above, is that the difference lies in frontline vs. warehouse workers. But, also to David's point, these working conditions for warehouse employees can damage a brand image and hurt the overall experience. I think this is one we need to reconcile...

      Annette :-)

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  4. Hello Annette, first time stopping by and will definitely not be the last. Although I agree with your comments, I think the culprit is not Amazon but the consumer. Have we forgotten about Wal-Mart? When will we finally understand that "low prices" come at a high cost (in this case, to employees?). You want to save a few dollars, yes, shop at Amazon (and who doesn't!). Want to make sure your dollars are spent not on P&Ls and shareholder value, but on employee satisfaction? Shop local.

    Sadly but true, the day consumers get fed up with this notion that savings are "magical", that is the day when all these companies will understand where exactly WE want them to allocate their dollars.

    Will see you soon!

    ~Paul

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    1. Hi Paul.

      Thank you so much for stopping by. I so appreciate it! And thanks for your thoughts on this topic. My goal is to start a conversation, and it looks like we've got a good one going here.

      I agree... I think we are appalled by these working conditions but perhaps not enough to boycott these companies. Is it because it doesn't impact us directly? We get to save money, but hey, it's someone else's crappy working conditions, not mine. That's a problem.

      Part of the problem is that we don't hear about these issues until they are outed, and then it's too late because companies are scrambling to fix them and fix the PR mess. And we take that as a false sense of, "Hey, they are making things right."

      This is an interesting and important topic and one that definitely needs to remain at the forefront of our employee experience discussions.

      Annette :-)

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  5. I worked at Amazon in corporate. While employee experience is given some credence, insofar as salaries are concerned, the work atmosphere that they promote can be described on occasion as toxic. A great example of why this occurs is looking at the way the company is structured, and the rapid fire mechanism by which they hire management. Amazon is one of the few firms that I've seen where almost half of their corporate workers were MBA'd (myself included) and this promotes an atmosphere of intense competitiveness and backstabbing. Because of the structure, people tend to work in silos, and although the company encourages cross collaboration, in practice this is less than effective since various groups claim "ownership" of tools and processes, and to be granted these with any less than a leprechaun and a pot of gold is laughable.

    Amazon works because everyone that works there is an archer: they all fire off a volley and the idea with the greatest sticking power is the idea that they go with. They then build an airplane to fly to china and bolt the wings on midflight. It's an amazing process on the inside to watch, but there is a lot of pressure on employees to constantly succeed. One of Amazon's leadership principals is in fact "Be Right, A Lot." The problem is, not everyone can be, and this makes a lot of people very uncomfortable and stressed out.

    Overall, I still think its a great place to learn a lot. They pay well, you are constantly surrounded by smart people. But do your time, get out, and go to a company where you can feel good about going in every day.

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    1. Thank you for providing some insights into the employee experience and culture at Amazon. This certainly adds great value to this story and really makes me ask the question again: customer obsession at all costs? or at what cost?

      Annette :-)

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