The word innovation has recently become an identity that many companies are proud of. However, claims of innovation often raise questions. What innovation is actually being carried out by the company, why innovate, so that if it has innovated, why is the service still unable to satisfy customers.
Innovation is a double-edged sword. If done correctly, the company will get a big profit, if wrong, it can even become a weapon for you. Instead of making a profit, the company can lose and lose customers.
Even so, in this era of disruption, innovation is the key to staying in business. Innovation helps a company or brand become relevant to its consumers. Innovations can also help companies or brands adapt to various conditions and events that occur in the industrial landscape.
Amid global and local companies that boast innovation as their main strength, there is Amazon Web Services. This company never claims that innovation is everything. But in fact, Amazon Web Services has proven to be a company with a strong culture of innovation , so that it can break business standards, especially in the digital field. Innovation is also what makes Amazon Web Services a pioneer in various retail services in the world.
“Amazon’s vision is becoming the earth’s most customer centric company. At the same time, we can maintain a very good business performance, “said Gunawan Susanto, Country General Manager of AWS Indonesia, at the Jakarta CMO Club event on Wednesday
Sananta Dutt, Head of Technology / CTO of South East Asia Amazon Web Services said, Amazon may not claim its innovation, but since its inception in 1994 innovation is the DNA of this company. This is stated in the 1997 Letter to Shareholders which says that Amazon has the fundamentals to measure the potential success of its company. First, focus on what the desire of consumers, creating long-term value compared with the profit of the company, and dare to make a bet in creating new innovations.
High obsession with consumer desires makes Amazon so bold to innovate. This company even has a mentality that is instilled in all of its employees, namely as a Day 1 Company . This principle builds a work culture as if every day is the first day the company operates. This principle believes that many things have not been discovered and many new things will happen in the future. Companies must be agile and courageous to create new things.
Drawing on how it works, Day 1 Company is a principle that many startups use . Amazon as a company that has been established for 27 years bravely acts like a new company with no experience.
Why is Amazon doing this? Sananta explained that consumer desire is something that is constantly changing. They always have new expectations for services to be a solution to their life problems.
“We are turning operations back to what consumers want which then drives the company to create innovation. Consumers have the potential to provide new ideas for innovation. To do this, Amazon implements a culture of innovation as the key to continuing to satisfy consumers, “said Sananta.
There are three things that Amazon is concerned with in its culture of innovation. The first is that companies must be brave enough to experiment. ” The more experiment do, the more innovation invented ,” said Sananta.
In experimenting, Amazon did not think how much profit it would get from the experiments being carried out. The company prioritizes the speed at which the experiment reaches the consumer. The sooner the experiment either in the form of a product or service reaches the consumer, the greater the profit that can be obtained. Through the courage to experiment, Amazon innovates together with its consumers.
Returning to the principles of Day 1 Company , Amazon is not afraid to fail. With the speed of innovation at its disposal, Amazon can quickly turn a failed experiment into another experiment. However, this company rarely had experimental failures. This is influenced by the second principle , namely using actionable metrics in the experimental process.
“90% of the features developed by Amazon Web Services come from us listening to what consumers need. 10% comes from how close we are to our customers. So, we can read what they want, don’t want, can’t do and try to measure it to translate that need in the form of solution technology, “said Sananta.
The third is to speed up decision making . You do this by reducing the team according to the relevance of their work. The layered determination process can slow innovation down. Amazon named this step Two-Pizza Teams . The explanation is that the work function is divided into small and autonomous working groups, is responsible for one service, has a definite schedule, there is no delegation of work, and is trusted to determine the innovations made.
“Amazon didn’t form this company overnight, but the existing work culture is shaped by our long experience. It is evident that this experience has led Amazon to become a young company that grows with its customers. The key is to have an obsession with consumers, dare to experiment, continue to learn, believe in the ability of employees, and think big, no think small , ”concluded Sananta.