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How hard should you squeeze?

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Is Amazon a brutal place to work? Do you have a reason to care?

To answer the first question you’ll have to do some googling, after which you’ll have to decide which sources you find more and less credible.

I don’t know if its warehouse workers pee in bottles to keep their productivity statistics in line with what is required or not. I also don’t know how accurate recent reports about its independent delivery contractors’ allegedly unsafe driving practices and working conditions are.

What I’m pretty sure of: An organization as big as Amazon is neither entirely innocent nor thoroughly guilty of allegations like these. If Jeff Bezos set out to make Amazon the worst place in the world to work he’d have almost as hard a time achieving this nefarious goal as he’d have if he wants Amazon to be the best.

Not that he’s off the hook. Not at all. Executives are, as has been pointed out in this space more than once, responsible for the business culture they preside over because how they behave in different circumstances has more impact than any other factor.

Which leads to the conclusion I’m least certain of, which is also the one I’m most confident of, and is the most important to you:

To the extent Amazon’s reported awfulness is real, it’s an unintended, or perhaps not-cared-about consequence of something quite positive that, as with so many other positive somethings, becomes quite negative when pushed beyond its limits.

Amazon is very likely the most efficient retailer in history — efficient in terms of:

  • Cycle time: How long customers wait for their merchandise after placing their orders.
  • Quality: The percentage of delivered merchandise that matches what customers ordered.
  • Marginal cost: The average incremental cost of one more purchased and delivered item.

If you’re Amazon or anyone else, you don’t become this good at what you do in one big implementation (and I’m going to resist the temptation to segue into a waterfall-vs-agile karaoke number).

You become this good in large part by establishing a culture of continuous improvement.

A culture of continuous improvement is a Good Thing (to coin a phrase). It means never being satisfied with how good you already are, and never assuming there’s no way to become better.

It’s a good thing right up until the organization crashes into the point of diminishing returns.

I first wrote about this phenomenon fifteen years ago (“Do you deliver?KJR, 6/24/2004). What I said at the time was, Squeeze a wet sponge and water will come out. Squeeze it again, harder, and you’ll get more water. Try to dry a sponge this way and you’ll get pretty frustrated. No matter how hard you squeeze, it will still end up damp. You can’t get all the water out, but you can damage the sponge.

Squeeze a flabby organization and cost will come out. Squeeze it again and you’ll find more efficiencies. No matter how hard and how often you squeeze, you’ll always see more waste. But like the sponge, when you squeeze an organization too hard you damage it.

So … never assuming you can’t get better is good. But inferring that doing more of what made you better will make you even better … that’s a false and dangerous inference.

A very long time ago, Byte magazine reported on a newly announced file compression package. Its developers claimed it was loss-less. They also claimed you could run a compressed file through it as many times as you liked, and each time you did it would come out smaller than the last time.

Think of continuous improvement programs as process compression algorithms and you’ll see the point: Trying to squeeze additional inefficiencies out of a process by squeezing harder is like trying to compress an already-compressed file by applying the same compression algorithm to it that you’ve already applied.

Dispensing with the dueling metaphors, what’s a beleaguered manager to do?

In a word, think.

In a few more words: To make a process better, take the time to:

Decide what “better” means — which of the six dimensions of process optimization you’re going to improve.

Evaluate proposed ways to improve the dimension in question.

Determine the tradeoffs. Unless the process in question is pretty awful, improving one dimension will probably lead to making at least one of the other dimensions worse. And even if it doesn’t, it might very well do some other organizational damage that, if not anticipated, would become an avoidable unintended consequence.

Then you’re in a position to mitigate the tradeoffs, because … do you really want to be the one forcing employees to pee in a bottle?

Comments (8)

  • This reminded me of a story from a military memoir. A hotshot young officer wanted an opportunity to show his stuff. So he was given charge of the battalion’s best company.

    The battalion commander reasoned that any competent officer could make improvements on his worst-performing company.

    Reply
  • For me, Amazon has jumped the shark and taken process improvement too far. They continue to improve delivery times (in theory) but have pushed the true cost away from their corporation. Using subcontractors for deliveries they have managed to move employee benefits and liabilities from accidents away from Amazon. A cost cutting move for sure for Amazon, but something the rest of society pays for. This may well be part of their mission – but my suggestion is to never optimize in a way that violates your mission or what makes you special in the marketplace. Constant cost optimization invites new competitors and/or harms your brand.

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  • You absolutely don’t want to be the employer forcing workers to pee into bottles.
    That’s why you hire contracting companies and let them be the evil employer while you’re just the “efficient” retailer setting up ‘standard’ contractual goals.

    That’s how the ethics of the situation works.

    Reply
  • Ordered a book from Amazon on a Friday (“standard” delivery) – Sunday morning (Mother’s Day) a 20-something woman drove up in a battered old car and delivered it – I didn’t need it on a Sunday morning and I felt bad she was working – …. do you really want to be the one making your customers feel bad/guilty about your employees working on Mother’s Day?

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  • One of the downsides of our desire to measure and optimize “everything” is that we lose track of the objective. I refer to this as the “MBA syndrome.” I’m pretty sure there are a bunch of MBAs in a closet at Home Depot who are continually calculating “profitability per cubic inch” for each and every product, with the consequence that some inexpensive but bulky items have vanished. The unseen consequence is that to buy those products I now go elsewhere, where I can also buy all the things I would have bought at Home Depot. In healthcare we have organizations requiring physicians to see one patient every [6, 8, 10] minutes. The result is that for an appointment past approximately 10 a.m. you can count on waiting an inordinately long amount of time before being seen. In other words, your time is less valuable and less respected than the time of the doctor.

    Bob, as you point out, improving one dimension probably (almost always???) leads to making [something else] worse. Typically, the “something else” is outside the scope of your metrics, so you don’t realize the revenge of the unintended consequences until it’s too late. This seems to be characteristic of almost all mature systems, e.g., schools, government, large enterprises, trade policy, the environment…

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  • Amazon is becoming a victim of its size. I am a Prime customer, which means that I get offered two day delivery on pretty much everything. In the last month, I’ve placed probably 15 orders. Of those, 10 got here in two days, 3 took three to four days, and of the other two, one is still pending (some time between one day and two weeks away) and the other got cancelled by them after three “We need to change your delivery date” emails.

    Additionally, I’m getting more and more “Sorry we couldn’t deliver your package today, the business where we were to deliver was closed” emails at 10PM. I live in a private house and there is always someone here. They just ran out of time, which happens, but why lie?

    And then there’s the dynamic predatory pricing where I order, say, a bag of dog food for the first time and it’s $31. Five weeks later, I go to order it again, and it’s $35. another five weeks later, it’s $39. No reason for the price to go up, but it does. Happens all the time once you order the same item more than once. And on that note, people should be aware that the identical item in different ‘departments’ can have different prices.

    And then there is the counterfeit merchandise. There is a TON of counterfeit merchandise on Amazon (Samsung batteries and SD cards seem to be a particular favorite), and even when they are alerted about it (I’ve probably done so a dozen times), the products are never pulled.

    I have to say frankly that everything they do seems to be geared toward squeezing that sponge so hard (to use your analogy) that dust starts to come out of it. I am particularly sensitive to their ongoing drive to use subcontractors and make everyone contract labor so they have to pay no benefits and assume no responsibility for things done in their name and at their behest.

    If it wasn’t so damn convenient to use them for a lot of stuff, I would go elsewhere. I suspect many feel the same way. But sooner or later they’re going to do something that REALLY annoys me, and that will be that.

    PS And any movie anyone would actually want to watch on Prime costs money. It’s mostly old mediocre stuff that’s ‘free’.

    Reply
  • Hi Bob,

    You said, “Marginal cost: The average incremental cost of one more purchased and delivered item.” Did you change the title of the dimension of process optimization? I thought the dimension was Incremental Cost?

    Reply

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