By the time you read this post I am sure your eyes will be bleeding from the scads of ink devoted to Amazon’s purchase of Whole Foods last week.
Superlatives like “game-changer”, “genius”, “Bezos Brilliance” have been used by the legions of analysts, armchair and otherwise, on this channel and that praise is certainly justified.
Few, if any, other organizations have that magic mixture of chutzpah, leadership, strategic focus, vision – and lets not forget capital – to make an acquisition of this scale. If it wasn’t enough for many retail players to watch Amazon bulldoze into their backyard, many competitors saw their stock prices fall astronomically too. The Street was quick and merciless in adding another layer of anxiety.
The knives were definitely out for the incumbents
Social media has been just as quick in their ridicule.
The laggards, the asleep-at-the-switch leaders, the old school thinkers, the risk-adverse dinosaurs who must have seen this inevitable move coming were scorned mercilessly. After all the money and (submerged) stock paid to the C-suite and boards of Kroger, Sears, CVS, Costco, what possible excuse could they have to not have anticipated this?
Yes, this acquisition was probably inevitable. Many pundits met the news with a nonchalant shrug and “of course they did” and “Who else but Amazon could” but suggesting that all the incumbents were too busy sipping mint juleps at the country club to take action shows a more dangerous level of “disruptor sycophancy” than legitimate analysis.
Before I continue, perhaps it is important for me to paraphrase the Bard;
“I come to bury Cesar, not to praise him”
This isn’t intended as a vigorous defence of the incumbents.
Its incredibly valid to take shots at them for the decisions they have made – or not made – as Amazon inexorably and relentlessly has grown and spread into categories as diverse as cloud computing, voice, mobile, retail, grocery, automation and, oh yes, selling a few book along the way.
But here’s the rub…
You can’t just cut & paste organizations
This isn’t a cop-out but there genuinely is only one organization that has the unique set of circumstances and attitudes that gave rise to Amazon. Bezos’ attitude to “zero profit” for example, has been previously lambasted and questioned by institutional investors but there’s no doubt that mantra has played a significant role in being able to acquire Whole Foods. In a previous post on Culture and Leadership I made the comparison between Sears and Amazon – a pretty binary comparison – but it still stands.
Both organizations have different legacies of leadership and historical decisions. One has a founder walking the halls and there’s no denying the huge impact that has. The other has a corporate raider at the helm and that guides the decisions he’s made. The fortunes of both companies are an outcome of those differences.
Quite simply no two organizations share identical leadership, governance, culture, partner network, relationship with unions, points of distribution etc. So hammering all companies who cannot operate with the dexterity and deftness of Amazon is incredibly naive.
Mixed messages and mixed signals
Let’s be honest, we’re an (increasingly) fickle bunch.
We’re as quick to roll out pithy statements like “Fail Fast” and “The Best Way To Predict The Future Is Invent It” as we are to hammer stocks and fire CEO’s when they miss analyst predictions by as little as one cent.
You can’t expect ongoing, consistent (and hockey stick style) increases in your stock portfolio while asking leaders to try new business models, explore new technologies and create entirely new categories. Just like we cannot go shopping at Sam’s Club every weekend while simultaneously decrying WalMart’s role in the death of Mainstreet American retail.
We either have to accept – and reward – CEO’s for trying new ventures and failing at them or we have to stop berating them for merely making tiny “safe bets” refinements and modifications.
We can’t have it both ways.
It is infinitely easier to get it wrong than get it right
Armchair analysts are always quick to point out how “obvious” a strategy is with little recollection of how often organizations – and analysts like themselves – have gotten it wrong.
I’m old enough to remember when MySpace and Second Life were technologies that were going to fundamentally change society. And to remember the business media idolatry of Jeff Skilling, Marrisa Mayer, Jeff Immelt and, until recently, Travis Kalanick for their fantastic winning strategies and leadership.
And let’s remember Bezos himself hasn’t exactly been right each and every time. Amazon Fire anyone?
I remember watching this incredible scene from “Hidden Figures” and thinking of the parallels to running a business today.
Trying to return a man safely to earth in a time before supercomputers and server farms must have been as harrowing and perplexing as trying to lead a multi-national today and grappling with the impact of hyper-connected customers, AI and borderless commerce.
The potential to get it wrong – and the consequences of getting it wrong – should never be dismissively waved aside.
I didn’t start this post as a defence of the status-quo and as a hall-pass for incumbent CEO’s to fiddle while Rome burns.
I don’t believe that “Too Big To Fail” should be a moniker they get to wear with pride.
But neither do I believe that our fawning adulation for “Disruptors” and “Unicorns” is healthy either. Some of our most recently anointed Unicorns aren’t exactly living up to their hype.
Business is hard. For incumbents. And for upstarts.
Getting it right is f**king hard. Harder than most of us realize.
Certainly way f**king harder than Hollywood makes it seem.
What say you Dear Reader? Am I giving incumbents too much latitude? Which incumbents do you consider agile enough to survive the new business realities? Is it even possible for incumbents to survive the pace of change in business today?
Finally, I did want to acknowledge a whip-smart colleague of mine – Sarah Thompson at Cossette in Toronto – who challenged my thinking and my references in writing this post. Thank you Sarah for kicking my cranium.
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