Cultivating An Innovative Culture

http://www.businessweek.com/bwdaily/dnflash/aug2004/nf20040819_7348_db_81.htm

Q: Recently, you've been emphasizing the importance of invention at Amazon, and you're hiring more engineers and computer scientists than ever. Why now?
A: If you look at our corporate culture, we've always had a customer obsession, and we've always been pioneering. We've always been focused on customers rather than competitors. There are very successful companies that pursue close-following strategies, and that can be a great strategy because you get to save all the money of not going down blind alleys. Innovation is part and parcel with going down blind alleys. You can't have one without the other.

But every once in a while, you go down an alley and it opens up into this huge, broad avenue. And that's so satisfying and, from a shareholder's point of view, so successful, that it makes all the blind alleys worthwhile.

Q: So you draw a distinction between a competitive culture and a pioneering culture?
A: I believe that the pioneering cultures tend to be more heads-down focused on customers. If you're watching your competitors, you're unlikely to invent a bunch of stuff on your own. There's nothing wrong with being a close follower. I don't think it's as satisfying. I actually think that in a fast-moving industry, it's also not as successful for shareholders.

Q: How do you try to ensure that Amazon continually innovates even as it grows into a large corporation?
A: I think if you want to have an innovative organization, you need to do at least a couple of things. One is it's a lot about selection of people. Some people love a rapid rate of change. They love going down alleys, many of which turn out to be dead ends. They like inventing. And other people like a more stable environment where you know more what tomorrow's going to be like. Those people, of course, flee Amazon.com in hordes.

It's just the way we started. Corporate cultures tend to be very stable over time. If you have a very competitive-focused culture, then people who like that kind of culture are attracted to that organization and they thrive there.