Amazon strategy

Amazon Strategy - Change as an Opportunity

It is well known that man is a creature of habit. Changes are usually associated with negative aspects, as they bring with them uncertainty about the future. It is therefore hardly surprising that many people are skeptical about change.

Aug 12, 2020

3 min read

In most cases, these are perceived as a risk or even a danger. Guiding principles such as "never change a running system" or "if it ain't broken, don't fix it" have crept into the decision-making processes of companies. And not infrequently, these are then used as the decisive justification against something new - against the implementation of an Amazon corporate strategy. 

Experience has shown that when fundamental decisions are made, the question of why a company, a strategy or a process should change, when it is apparently "running", comes up again and again. Although it is already perfectly clear to many to no longer regard Amazon as a competitor and rather to use the online giant's reach for the company, some employees keep asking the same question when implementing the Amazon corporate strategy. Why? But it's time to rethink and take a different perspective: Why not?

Change a running system

So why not try something new? The phrase "never change a running system" has its origins in sports. It is derived from the saying "never change a winning team". This is also a misconception in sports, because in competition with other teams, the task of a good team leader is not only to lead his team. Rather, it is to promote and develop the team in order to get the best out of it. To do this, moves are analyzed tactically and strategically, results are evaluated and the strategy is adjusted based on this. And that, in turn, means change.

Transferred to the business world, it is not uncommon for external drivers to cause a company to change. In addition to increasingly dynamic competition, changes in technology in particular have taken their toll in recent years and presented many companies with new challenges. There's no question about it - digitization has fundamentally changed retail. However, digitization offers a number of opportunities for change-minded companies. For example, Amazon's integrated sales platform, Marketplace, allows companies to take advantage of Amazon's prominent position. With an Amazon corporate strategy, e-commerce activities can be established and expanded. Nowadays, it can be observed that companies that are particularly adaptable to change are able to survive on the market because they are able to harness the potential offered by change. These companies follow the guiding principle of being open to change and not closing themselves off to it. They see change as an opportunity.

The three phases of change

Experience shows that change always meets with resistance. In the context of organizational theory, the psychologist and social scientist Kurt Lewin dealt with the phases of change. Lewin explains the emerging resistance based on the so-called field theory with the fact that in every organization two fundamental force fields interact. On the one hand, these are forces that want to maintain the status quo out of habit or fear, among other reasons. On the other hand, there are force fields that bring about change. These are mostly the management, which recognizes the potential of a change and wants to make it usable for the company. Managers and decision-makers must therefore usually reckon with counterforces when introducing an Amazon corporate strategy. They should therefore not make the fundamental decision dependent on the full support of the team and, above all, they should not shy away from acting innovatively. In total, Lewin identified three phases of change, which he summarized in his famous 3-phase model.

  • Unfreezing: The so-called thawing phase describes the initial situation of the organization. The previous strategy is questioned and the awareness of the driving force fields is penetrated by the necessity of change. In the first step, it is all the more important to pick up those affected and involve them in the change process, especially if there is great resistance. If a change is to be introduced successfully, the balance must be shifted in favor of the driving force fields in the first phase. The existing equilibrium or the achieved current state of the organization must therefore "thaw out". A shift in favor of the change drivers must be enabled. The goal of this phase is to convince all those affected of the benefits of the change. 
  • Moving/Change: In the second phase, the actual change process takes place. The goal of this phase is to implement the changes in the organization and to find a new balance.
  • Refreezing: Once the desired changes have been implemented in the organization, they in turn require stabilization. For permanent integration into the organization, the implemented changes must be "frozen" again and consolidated.

Implementing change successfully

Every change - including the implementation of an Amazon corporate strategy - requires good change management. This plans, supervises and organizes interdepartmental and far-reaching change processes from the initial state to the target state. In order to support people in accepting change and implementing it more effectively, the management consultancy Strasser & Strasser developed the effective methodology of the Eight Levers of Change®:

  • Goals and positive expectation of the future: Set clear goals and talk about expectations - always being optimistic.
  • Conviction: Accepting change and leaving the victim role. As long as people speak from conviction, powerful and credible messages can work.
  • Involvement: Identify key partners and actively engage them in solutions.
  • Role models: Be aware of your own role models and be one yourself.
  • Adaptation: Shape the environment where possible and adapt where necessary. Align knowledge with the new requirements.
  • Rewarding success: Create a sense of achievement and celebrate with others.
  • Consistency in the face of failure: Deal constructively with one's own failures and with the failures of others. Openly address mistakes and demand consequences.
  • Project management: Develop a common thread for implementation.

Conclusion

Just as a corporate strategy does not develop overnight, it should not be suddenly and unexpectedly discarded. In any case, repositioning requires a solid foundation, and far-reaching changes should be strategically planned and managed. However, managers and decision-makers should not make change dependent on how much headwind they will encounter. It is much more important to convince all those affected and to implement the planned project together with their involvement.

While in the past so-called change agents used to support and supervise change processes in a company on a more regular basis, in times of continuously increasing market dynamics the skills of a change agent are expected more than ever from executives. From our own experience, it has been shown and proven that external consultants in particular can assess the situation with the necessary distance and provide professional recommendations for action. In particular, the development of a new sales channel involves many unknowns and often lacks not only the necessary resources but also the required expertise. With years of experience and the certain know-how we support strategically as well as operationally worldwide companies in the implementation of an individual Amazon strategy.

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