176. Distributor Puts Amazon’s 14 Principles to Work

Principles for Innovating

Google: Amazon’s 14 Leadership Principles”. Here’s how a distributor put them to work.

Principle #1 (P#1); “Customer Obsession”

(CEO speaking): We subscribe to a customer/SKU, net-profit analytics service. We were initially shocked by the net-profit winners and losers. But, if we were going to reinvent service-value in a Frugal (P#10) way, we should start obsessing about our most net-profitable customers and customer niches.

To be “Learning and Curious” (P#5) and to “Dive Deep (P#12)”, I – unannounced to anyone – role modeled a Bias for Action (P#9). I visited the five most-net-profitable customers in our #1 most-net-profitable segment of customers. To “Invent and Simplify” (P#3), I boiled “Service Excellence” down to 8 metrics for all to know and pursue.

I got pushback about how to make it happen. But, I invoked “Ownership (P#2)” of the new service vision. I would be the Project Champion. And, I knew that I was right (Are Right, A lot: P#4). Our best customers promised more business, if we could deliver.

Everyone believed best-service would win more business. But, weren’t all customers equally good and deserving of their best service efforts? And, how were they going to make more money (not just the owners)? I educated everyone (simplification again: P#3) about the inter-connections of: People, Service, Profits (and Pay). We were going to:

  1. Invent ways to consolidate small orders into bigger ones
  2. Create the slack to take more big orders from big customers (due to Service Excellence)
  3. Grow Gross Profit dollars per average order and per employee
  4. Explode profits per employee
  5. And, then everyone would get extra compensation from the premium profit pool.

Principles for the Journey         

I told everyone that we were “Thinking Big (P#8)”. We were “Insisting on Highest Standards” (P#7). And, everyone would have to up their game. If some didn’t want to, we would – going forward – “Hire and/or Develop the Best (P#6)”. As a result, both Great Results (P#14) and Trust (P#11) (in me) and the metrics were the ultimate by-products.

Results?

In 12 months, our sales doubled along with Gross Profit Dollars per order and employee. Profits increased 10-fold off a small base. Gainsharing per employee was 25% of base pay. And, the company now has a new, can-do, innovation culture and capability.

(CLICK HERE for the full journey report, download -“Core Renewal Roadmap”)

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