Automation + Empowerment

In edition #46 of the Weekly, we shared a few thoughts on sourcing, hiring, and retaining talent, but this week we wanted to highlight a Harvard Business Review piece that explores how Amazon used automation to better utilize and empower the talent in their organization. 

Automation and technological change carry both positive and negative impacts for certain jobs in more 'at risk' lines of work (e.g. service, retail, etc.), but at the end of the day, if organizations aren't leveraging the tools available to them, someone else in the industry will. Amazon has done a superb job at freeing up employees from repetitive tasks and allowing them to spend more time attacking problems of greater value and new initiatives within the company. There will always be an abundance of ideas for how to improve an organization, but often never enough capacity to chase them all.  

It's important to approach automation from an employee empowerment perspective rather than headcount elimination standpoint. Companies that leverage technology to allow their employees to do more with less will win in the long run. Amazon's success can be reduced to relentlessly pushing the boundaries of what can be automated and empowering its employees to do more with less.

"The animating idea behind Hands off the Wheel originated at Amazon’s South Lake Union office towers, where the company began automating work in the mid-2010s under an initiative some called Project Yoda. At the time, employees in Amazon’s retail management division spent their days making deals and working out product promotions as well as determining what items to stock in its warehouses, in what quantities, and for what price. But with two decades’ worth of retail data at its disposal, Amazon’s leadership decided to use “the force” (machine learning) to handle the formulaic processes involved in keeping warehouses stocked. “When you have actions that can be predicted over and over again, you don’t need people doing them,” Neil Ackerman, an ex-Amazon general manager, told me."

Assuming growth is a priority for your organization, automation offers the means to empower talented employees to work on new initiatives and higher value work. Eliminating the jobs related to the automated work may make sense financially in the short-term, but over the long-run, eliminating human capital means shrinking capacity for growth iniatitives:

"Had Amazon eliminated those jobs, it would have made its flagship business more profitable but most likely would have caused itself to miss its next new businesses. Instead of automating to milk a single asset, it set out to build new ones. Consider Amazon Go, the company’s checkout-free convenience store. Go was founded, in part, by Dilip Kumar, an executive once in charge of the company’s pricing and promotions operations. While Kumar spent two years acting as a technical adviser to CEO Jeff Bezos, Amazon’s machine learning engineers began automating work in his old division, so he took a new lead role in a project aimed at eliminating the most annoying part of shopping in real life: checking out. Kumar helped dream up Go, which is now a pillar of Amazon’s broader strategy."

Thinking long-term about automation requires both the implementation of technological solutions as well as planning the strategic direction for your workforce post-automation. 

"If Amazon is any indication, businesses that reassign employees after automating their work will thrive. Those that don’t risk falling behind. In shaky economic times, the need for cost-cutting could make it tempting to replace people with machines, but I’ll offer a word of warning: Think twice before doing that. It’s a message I wish I had shared with the banker."

Multichannel retail and Covid-19 research report (GlobalData)

+ "One of the reasons why retailers have been so innovative in developing multichannel services is because the retail industry is highly competitive with many companies actively competing for a slice of market share. Indeed, retail is one of the least concentrated industries in the United States, with the top 5 retailers only accounting for 19.9% of all revenue. Against this backdrop, no retailer can afford to be complacent because the price of contentment with the status quo ultimately leads to consumer abandonment and the loss of market share. History tells this tale many times over, with even iconic names such as Sears – once the largest retailer in the world – falling into difficulty because of a failure to compete effectively."

The new ‘blank check’ barons are coming for Wall Street (Bloomberg)

+ "This year, no fewer than 91 SPACs have raised more than $35 billion, approaching half the total raised by SPACs on U.S. exchanges in all previous years."

The billionaire who wanted to die broke, is now officially broke (Forbes)

+ "Charles “Chuck” Feeney, 89, who cofounded airport retailer Duty Free Shoppers with Robert Miller in 1960, amassed billions while living a life of monklike frugality. As a philanthropist, he pioneered the idea of Giving While Living—spending most of your fortune on big, hands-on charity bets instead of funding a foundation upon death. Since you can't take it with you—why not give it all away, have control of where it goes and see the results with your own eyes?"

Welcome to your bland new world of consumerism (Bloomberg)

+ "All startups seek to disrupt and disintermediate a smug status quo, or originate and dominate an entirely new niche. But what makes a brand a bland is duality: claiming simultaneously to be unique in product, groundbreaking in purpose, and singular in delivery, while slavishly obeying an identikit formula of business model, look and feel, and tone of voice. Despite hiding in plain sight (and plain recycled packaging), this “slight of bland” has won the wallets of a generation that considers itself above marketing, and created some of the buzziest companies of the age."

Why Americans really go to the gym (The Atlantic)

+ "In the past 70 years, physical activity in America has transformed from a necessity of daily life into an often-expensive leisure activity, retrofitted into the foundation of people’s identities. As a concept, fitness was a response to the flourishing, sidewalk-free postwar American suburbs and what the fitness pioneer Bonnie Prudden dubbed “the tyranny of the wheel”: Americans went from strollers to school buses to cars, stripping out much of the on-foot transportation that had long characterized life in cities or on farms. “In the ’50s and ’60s, the body became a problem, and exercise developed—it had to develop—because people realized that we were all going to die of heart attacks,” Shelly McKenzie, the author of Getting Physical: The Rise of Fitness Culture in America, told me."

How much bigger can digital fitness get? (The Hustle)

+ "There are 62m gym memberships in the US and 183m globally, according to a 2019 report. But many people shifted to online workouts during the pandemic, and  gyms have been slow to reopen. Many notable gym brands have filed for bankruptcy in recent months, according to PETITION: Gold’s Gym, 24-Hour Fitness, SNFW Fitness (Steve Nash’s), Town Sports International (New York Sports Club). They posit that high-end Equinox could be next."

How Amazon automated work and put its people to better use (Harvard Business Review)

+ "For the past decade, Amazon has been pushing to automate office work under a program now known as Hands off the Wheel. The purpose was not to eliminate jobs but to automate tasks so that the company could reassign people to build new products — to do more with the people on staff, rather than doing the same with fewer people. The strategy appears to have paid off: At a time when it’s possible to start new businesses faster and cheaper than ever before, Hands off the Wheel has kept Amazon operating nimbly, propelled it ahead of its competitors, and shown that automating in order to fire can mean missing big opportunities. As companies look at how to integrate increasingly powerful AI capabilities into their businesses, they’d do well to consider this example."

Who invented the lightbulb? (Neurologica)

+ "The question of who should get credit for inventing the lightbulb is deceptively complex, and reveals several aspects of the history of science and technology worth revealing. Most people would probably answer the question – Thomas Edison. However, this is more than just overly simplistic. It is arguably wrong."

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