Ben Chu in The Independent
“The Everything Store” sounds like a pretty brutal place to work. An in-depth report by the New York Times on Amazon last year exposed a culture of borderline harassment from line managers, stupidly long hours, vicious evaluation sessions, a high staff turnover rate and a cult-like atmosphere personally imposed by the internet firm’s founder Jeff Bezos.
“Purposeful Darwinism” was one word used to describe the Amazon culture by a human resources director. Amazon contested the bleak picture painted by the report. And yet Amazon’s boss Jeff Bezos sounds like he’s rather pleased with it.
“People self-select” he wrote in his letter to shareholders last week, in an indirect reference to the New York Times report. “Over the last two decades we’ve collected a group of like-minded people. Folks who find our approach energising and meaningful.” In other words, the unsuited get selected out of existence at Amazon.
There’s something about the idea of Darwinian natural selection as a description of the business world that people who lead companies (particularly those in the fast-changing world of consumer-facing technology) find compelling. And one can see why. They are often faced with an array of strong competitors; consumers can switch their spending easily and quickly; a company has to be better, perhaps more adaptable, than the rest of the pack if it wants to make a profit. Bosses must feel as if they are in a constant battle for survival.
Yet, as a metaphor for business activity, this is rather misleading. In Charles Darwin’s great hypothesis it was random phenotypical traits resulting from genetic mutations that gave certain creatures an advantage in the struggle for survival in their particular natural habitat. So, for example, if a finch happens to be born with a certain shaped beak well suited to cracking open nuts common on a particular island that bird will survive, reproduce and pass down its genes. And over the generations the island may, ultimately, become populated by a species of finch with that particularly useful shaped beak.
It wasn’t that original finch’s brains, or anything it had control over, that gave it an edge, or meant it got “selected” to pass on its physical traits to future generations. The idea that it is the smartest, or the most energetic, or those with the best culture, that thrive and survive owes more to the pseudo-science of “social Darwinism”, as outlined by 19th century sociologists such as Herbert Spencer, than anything from Darwin’s The Origin of Species.
Free markets are Darwninan in a truer sense, in that selection is often much more about luck than judgement. Andy Grove of Intel wrote in his book, Only the Paranoid Survive, that: “Most companies don't die because they are wrong; most die because they don’t commit themselves. They fritter away their valuable resources while attempting to make a decision. The greatest danger is in standing still.”
Grove, who died last month, was a truly exceptional businessman, but on this point he was wide of the mark. Most companies, over the long run, die because technology moves on and patterns of consumption shift – and there’s nothing their managements can really do about it. It’s story not so much about the quality of leaders or their innovative corporate cultures, but the inexorable disruptive power of markets.
Nothing a manufacturer of horse-drawn carriages had done upon the invention of the car would have saved the businesses (in its original form) from oblivion. Look at the composition of a stock market index of the world’s largest companies. It has changed almost beyond recognition over the decades.
Some firms are undoubtedly better run than others. Some are more innovative than others. But even the most successful are merely small boats bobbing on the surface of a great and treacherous ocean.
One day they will all be capsized. And others will take their place as new markets open. It will happen to Intel. It will happen to Amazon, too. And when it does, it’s unlikely to be a result of a lax corporate culture or employees who weren’t prepared to work weekends.
To be fair to Bezos, he readily admits in his letter that “luck plays an outsized role in every endeavour and I can assure you that we’ve had a bountiful supply”. He also stresses that Amazon’s culture is not the way all firms should be. It’s simply the one he believes will deliver the best results for Amazon.
Perhaps he’s right. He can certainly point to his company’s stunning rates of growth from zero in 1994 to today’s $275bn behemoth as evidence to support his methods. But he may well be wrong.
Perhaps different methods would actually produce better results. There’s evidence that workplaces in which people have a decent work-life balance are more productive and innovative. We can never really know.
The good news for those looking for a job in the technology sector is that the defining feature of competitive markets is diversity; meaning there are always lots of different firms and potential employers. It may feel like “The Everything Store” has become the everywhere store, but Amazon’s global workforce is still only 230,000. Compare that to the 1.5 million people who work for McDonald’s worldwide.
Thankfully, no one has to work at Amazon, or any place where the law of the jungle reigns.
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