Can Culture Cripple a Giant?

I have followed Amazon for the past few years as an interested observer and a loyal customer. It is has been an interesting journey on both fronts. On October 23 Amazon released its financial results. The results were disappointing. Amazon reported a loss of ninety-five [95] cents per share and this was over the forecast of a seventy-four cent loss. I think there is more to this story than just the numbers.

KIng Kong

I believe the financial performance will impact the organisation culturally. Amazon is known for having a rough and tumble culture. I have seen it described as very tough, demanding of time and energy, adversarial, focused on efficiency and very political. I understand there may need to be some tempering of the perception since many of the people describing Amazon culture are ex-employees for a variety of reasons.

If the culture at Amazon reflects what I have heard described, there are some interesting and painful outcomes in Amazon’s future. These outcomes have everything to do with people and culture. If there are issues with loyalty to the company due to things like politics, burn-out and lack of engagement this will rise to the top particularly in the top tiers of management. Why will the top tiers be impacted?

The remuneration for Amazon executives includes shares. Amazon recruits top talent that is constantly in demand by other companies both competitive to Amazon and not.   The remuneration packages include a heavy weighting of shares. If the shares fall in value this directly impacts the bank accounts of the senior managers. If they are already shaky due to a lousy culture and work environment there will little or no resistance to them seeking opportunities with other companies.

The loss of talent can potentially turn into a ‘doom loop.’ Once a talent drain begins it can be difficult to stop. Organisational culture is not something that can be changed overnight, even in a company with the resources of Amazon.

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