What the news media can learn from Amazon
The news media is no longer protected high-margin industry it once was. Where before a few players dominated each channel, we are faced with the reality where we have to innovate or die.
For organisations that are not used to inventing and delivering new products and services, we can take inspiration from the serial winners at the game of innovation. And there are few better exponents than Amazon. Students of innovation have recorded more than 25 significant innovations by the company in its first twenty years and collecting 2200 patents in 2020, alone. Clearly, their frameworks and cultural practices offer many lessons for those aspiring to remain relevant in today’s world.
In their just-released book “Working backwards. Insights, stories and secrets form inside Amazon” Colin Bryar and Bill Carr, two former generals in the Amazon empire, recount the principles that helped make it the $386bn annual revenue behemoth that it is today. For innovative culture to exist among the entire organisation, the vision, mission and values need to be crystal clear — something CEO Jeff Bezos goes to great lengths to cover in shareholder letters, published leadership principles and his own actions. Innovation is a function of leadership and the news industry’s inability to innovate is not merely a market failure but a failure of leadership.
The first leadership principle (Amazon has 14 in total) is an obsession with their customers. You cannot invent successfully unless you are fulfilling a need of people you rely on for survival or in the case of media organisation the needs of the audience. And as the title of the book suggests, innovation and success come from starting with this focus and working backwards from there.
In the past, newsrooms would assume they knew best and printed, spoke and delivered based on those assumptions with few efforts made to really understand what audiences need and value. Journalism was a one-way broadcast. In the digital realm, we have the opportunity to set our goals and priorities that overlap with the needs of our audiences and then use data to measure our progress against those goals.
We have feedback mechanisms in properly calibrated analytics, surveys and engagement metrics and yet many organisations have struggled to migrate to this place of being driven audience-centricity. We didn’t obsess over our readers in a way that would lead the media industry into digital transformation.
There is a widely-held notion that Amazon was never concerned with profit, especially in its formative years but Bryar and Carr explain it differently. Profit was indeed important but rather took second place to long-term thinking where Bezos believed shareholder interest would align with customer satisfaction — trumping short-term gains. In the news space, when editorial standards are compromised for advertiser interests this may achieve short-term gain but erode long-term trust and quality. Cutting newsroom staff with little product left to show is another profit-seeking missile the industry has often been hit with.
Frugality is another leadership principle that has allowed Amazon to stick with projects longer than others may have pursued. Amazon Prime, Kindle and AWS all took more than 3 years to deliver profits for the firm during which time they could easily be killed off. A favourite of the media industry is the launch of the big, expensive product two years overdue and 500% over budget. Only to be killed months later.
Failure and innovation are two sides of the same coin, as Carr recounts his time leading the failed Amazon Unbox project. Instead of firing him, Bezos knew his failed efforts would yield lessons for the rest of the organisation and he’d be even more motivated to succeed. Added to that, Amazonians strive to reduce the costs of experiments, so they can do more of them that could yield many bigger wins. All of these are practices that do not come naturally for most organisations and rarely do news organisations start experiments with “what is the job this product needs to do for my audience?”
It is not that the media didn’t try to innovate in the last few decades, but rather that the motives for innovation weren’t driven by audience needs. In Amazonian terms, there was no obsession with the customer. More likely there was an obsession with profit or comeptitors.
Innovation itself is a form of leadership. And a single article or content piece can itself serve as being innovative. But in order to achieve that needle-moving effect, we have to understand our audiences so well, that we can fulfil their needs in new and fresh ways. Only then can we create value in their eyes that will keep them coming back and engaging with us. No one understands this better than Bezos who recognises that it isn’t his job to have all the ideas but rather to build a culture of innovation fuelled by customer obsession.
