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Amazon-Gate: The New Normal And Lessons For Leaders


A few weeks ago, the New York Times both gave us an MRI-like view into what work practice and culture looks like at one of America’s new tech titans and amped up a conversation on the future of the white collar worker. The thrills and challenges of working at Inc. are well-known in Silicon Valley, where great talent moves quickly from company to company and a new generation of employees with heightened expectations of their work experience isn’t shy about sharing their views. For the rest of us this was news, and the story swept through the nation, even the world.

As the Amazon — or Ama-Gate — story went viral, people jumped at the chance to judge and defend one of America’s new great companies and its founder and CEO, and management teams took in a glimpse of their future. In our increasingly hyper-connected, hyper-transparent world, these types of exposés are rapidly becoming the new normal. When a tweet can tell us what just happened, a hack can expose private thoughts and conversations, and a social website can propel broad and lively debate over matters that would have once been discussed only in hushed tones by the water cooler, everything that happens within companies will increasingly be as visible to consumers as the quality of a product or service.

The Times story also prompted white collar workers across the country to consider their own futures. In a world where big data and artificial intelligence increasingly shape how work gets done and who does it, the demands for employees to find new ways to deliver value are growing exponentially. Just as globalization and automation ravaged employment opportunities for their blue collar colleagues 30 years ago, machines are showing their capability to do more and more of the administrative and management work that defines white collar contribution. Employees will need to work harder, shift approaches, and emphasize different capacities if they want a chance at keeping their careers on track.

As our colleague Dov Seidman explains, we’ve moved from an industrial economy to a knowledge economy to a human economy. (See "From the Knowledge Economy to the Human Economy") In a human economy, how companies and employees do what they do matters more than what they do. In a world where product specs and business models can be rapidly copied or re-engineered, brand equity will increasingly be defined not only by how much customers lust for a product or experience but who created those products and experiences and how an organization brought together the capacities and capabilities to do so. In a human economy, economic value shifts to those organizations that most effectively enable humans to bring what most makes them human to work: their passion, creativity, honesty and humility. As machines take on more, humans will need to improve their game and look beyond the simple processing power of their brains to build their careers.

With these thoughts in mind, Ama-Gate suggests a few specific lessons for how companies and employees can and will win in the human economy.

First, companies need to over-invest in ensuring they have a clear behavioral model, conveyed and cemented through carefully considered language. By behavioral model, we mean a code of conduct defining expectations for how people should show up at work every day. In a human economy and a VUCA world (volatile, uncertain, complex and ambiguous), values trump structure and process, and agility is critical. Flatter organizational structures and effective information technology are a start. Equally important, though, and certainly harder to scale, is having a broad base of employees confident to take risks, enabled to challenge the status quo and wise enough to exercise good judgement. To get these mindsets and behaviors, companies need to develop a corporate culture that attracts people with the capacity to thrive in a work environment characterized by greater freedom and a higher standard for what professional leadership looks like.

According to the Times piece, Jeff Bezos recognized this early on. Determined to prevent his company from falling into the trappings of “bureaucracy, profligate spending [and a] lack of rigor,” he defined and embedded a set of behaviors that became core to Amazon’s daily operations: “used in hiring, cited at meetings and quoted in food-truck lines at lunchtime.” These principles are held so dear at Amazon that, according to the Times, “some Amazonians say they teach them to their children.” They serve as the secret sauce to Amazon’s growth, attracting and enabling a unique set of talent to reinvent markets and create value.

But companies need to make sure that they get the mechanisms and systems for reinforcing these behaviors just right. Here, Amazon seems to have gotten something wrong. While one of the 14 core behaviors that Amazon emphasizes is “earn trust,” for example, it also implemented an Orwellian governance mechanism that encouraged people to send secret feedback to their colleagues’ bosses. This may be one way to better understand employee performance. But instead of fostering an environment of trust, such a system can create an environment pitting employees against one another. At Amazon, according to the Times, this system bred a practice known as “the paste,” with managers copying and pasting anonymous feedback into performance reviews rather than using the input to teach employees and help them grow. In a human economy, where behavior matters most, bad structures can have outsized consequences.

Perhaps the most important teaching from Ama-Gate, though, is that scaling the best of human behavior is hard. Amazon has quadrupled its headcount since 2008, growing to well over 100,000 employees. Sustaining the culture that made you great through that kind of growth is a challenge for even the most effective of companies. Organizations look different at 1,000 employees than they do at 100,000 employees. What stands out most in the Times piece are the anecdotes describing a lack of compassion by individual supervisors when dedicated employees face personal hardships.

It’s become dogma in Silicon Valley to say, “It’s a team, not a family,” implying that great organizations can’t carry the weight of those who fail to contribute every day to make them better. While no organization can be great if it doesn’t hold people accountable, there’s a difference between demanding excellence and being devoid of compassion. For Amazon, this challenge is likely exacerbated by the industry in which it operates and its unique demographics.

The tech world is often shamed for its lack of diversity, and many of the heart-wrenching stories in the Times piece expose an environment inconsiderate to differences. To scale humanity, to get compassion right in the workplace, and to win in a human economy, organizations are going to need great leadership. This means that being a great coder, or even a great manager, will no longer be enough.

The Amazon piece clearly struck a chord with the larger public, in part because it offered a rare glimpse inside a corporate icon. More importantly, though, it’s initiated a broader conversation around what Amazon stands for and what it means to be a leader there. We feel confident this is a conversation that will not end soon at Amazon, in the tech industry or in the world at large, as we all seek to better understand what it takes to win in the human economy.

—By Michael Eichenwald and Nick Petschek

This article originally appeared on Law360, September 16, 2015

Topics: Culture, Corporate Culture