Want to innovate? Divide employees into “direct” and “indirect”


In the book “Think like Amazon. 50 and 1/2 business ideas “ talks about the principles that guided Jeff Bezos in the development of the largest eCommerce company. The book is authored by John Rossman, a business consultant and former top executive at Amazon.

Here’s an excerpt on the difference between Amazon “direct” and “indirect” employees and how to apply it in your company.

Want to innovate? Divide employees into “direct” and “indirect”

At Amazon, we joked that Jeff Bezos is like the Wizard of Oz pulling the levers behind the curtain to rule his empire. And like the Great Oz, if Bezos could, he would be left alone behind this curtain, freely controlling the entire mechanism without interference or disruptions.

But alas, companies the size of Amazon don’t work that way. Amazon is one of the largest employers in the United States, and the dream of a fully automated company is no different from Dorothy’s adventures – it’s just a dream. The reality is the need to evolve, automate and innovate.

Development and innovation are challenging tasks. Yet most executives overlook a critical tool at their disposal: headcount planning and distribution.

Idea… Identify and take into account the skills and people who run the business in relation to the skills and people who help grow the business and innovate, usually with the help of technology and partners. Consider how to allocate personnel responsible for “development and implementation of innovations” and calculate the corresponding costs.

Direct and indirect staff at Amazon

At Amazon, corporate employees are mainly divided into two types: direct and indirect.

  • Direct employees Are people with the skills that help grow a business or create new opportunities. Their skills include technical and software development skills, process architecture and corporate development skills, as well as those of product managers and specialists who negotiate contracts.
  • Indirect collaborators – these are all other employees: from the sphere of management, operations, customer service. They are primarily responsible for processes that have not been automated, improved, or outsourced for execution by other organizations.

Ideas on how to develop processes or innovate are outlined in the chapter on operational planning. The best ideas are passed on to direct employees, such as engineers, architects, and product managers. Indirect employees are subsequently promoted or eliminated to justify assignment and demonstrate commitment to the project.

So what happens when a company makes strategic decisions each year to reallocate skills to create processes and technologies to grow the business? Over time, businesses are becoming more regulated, digital and capable of growth.

Robots in fulfillment centers

In 2017, The New York Times noted that no company embodies all the desires and hopes of automation better than Amazon. As it grows by leaps and bounds, the company employs thousands of Americans every month. Yet Jeff Bezos has long realized that Amazon’s nearly 700 fulfillment centers around the world are disastrously hampering development.

In 2012, Amazon bought Kiva Systems for $ 775 million and renamed it Amazon Robotics. Two years later, robots developed by Kiva became part of Amazon’s warehouse workforce. By 2017, Amazon had over 100,000 robots worldwide, and the company didn’t stop there.

In addition to the ambitious “Deliver in Two Days” promise, robots also make it easier for humans to do the boring jobs and leave exciting tasks to their flesh and blood colleagues.

Have Kiva robots replace human beings? According to Amazon, no. The company told the New York Times that since the inception of the Kiva robots, it has employed 80,000 warehouse employees in the United States, with a total warehouse staff of more than 125,000.

Head over to Amazon Robotics and you’ll be greeted with the slogan “We’re rethinking now,” followed by invitations to study robotics and enter a competition to create more innovation in the robotics category.

Why Amazon is called the “shark”

Competitors have compared Amazon to a shark over the years. This is a good metaphor in the sense that sharks never stop moving. Amazon’s unprecedented drive to grow, Bezos and his team see thorny problems for years to come. You should never rest on your laurels and not think about tomorrow. If every day is Day 1, there is no end in sight.

How to apply to yourself

For your organization, choose carefully the processes in which you invest. Make sure they are the true deterrent or critical factor.

Hopefully you have a lot of ideas, but you can only afford a few. After all, you don’t want to plan a one-bedroom home and end up building a Winchester mystery home.

Cover photo: Unsplash.


Source: RB.RU by rb.ru.

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