change management case study of amazon

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Amazon: The Ultimate Change Management Case Study

Amazon’s innovations have helped it become extremely successful, making it an excellent change management case study.

Since it was formed, Amazon has innovated across countless areas and industries, including:

• Warehouse automation
• The web server industry
• Streaming video and on-demand media
• Electronic books

Considering that Amazon started as an online bookstore, these accomplishments are quite impressive.

Examining Amazon as a change management highlights a few important business lessons:

• Innovation fuels success, especially in today’s digital economy
• Speed is the ultimate weapon
• Those who resist organizational change can easily get left behind

Below, we’ll examine some of Amazon’s changes … and hopefully discover a few reasons why it has become so successful.

Below are 10 ways Amazon has changed its business, transforming itself far beyond a mere online bookseller.

In no particular order…

1. Amazon Web Services

When Amazon Web Services (AWS) started out, most developers didn’t take it seriously.

A decade later, it was the go-to cloud server company in the world.

In fact, Bezos has even said that AWS was the biggest part of the company.

Since it has more capacity than its nearest 14 competitors combined, this shouldn’t come as a surprise.

2. Whole Foods

After acquiring Whole Foods , Amazon began making changes to the grocery store chain.

A few of these include:

• Adding Amazon products to the shelves
• Integrating Whole Foods and Amazon Prime
• Internal restructuring

Other programs include food delivery from Whole Foods, rewards for customers using Amazon credit cards, and discounts for Prime members.

3. Delivery

Amazon has drastically innovated product delivery.

For instance, customers with Prime memberships can enjoy free two-day delivery.

In certain cities , Prime members can also get free same-day or one-day delivery.

And with its drone delivery program on the horizon, customers may be able to receive orders in 30 minutes or less .

4. Warehouse Automation

Amazon warehouses have undergone major technological transformations.

Currently, Amazon warehouses uses robots to collect and transport many of its products.

In coming years, though, even more of the company’s 200,000+ warehouse workers could be replaced by robots .

In 2016 alone, it increased robot workers by 50% .

5. TV and Prime Video

Another innovation of the former bookseller is its foray into TV, movies, and video.

Amazon began by selling videos and DVDs. Now it streams, rents, and sells digital copies of videos.

On top of that, the company has joined YouTube, Netflix, and other tech giants by producing its own movies and TV shows.

6. Amazon in Other Countries

Change managers would also be interested in how Amazon adapts itself to other countries’ economies.

In India, for instance, Amazon has been forced to adopt unique measures.

These include:

• Using mom-n-pop stores as delivery locations
• Hiring bicycle or motorcycle couriers for last-mile deliveries
• Creating mobile tea carts that serve tea and teach business owners about e-commerce

These types of innovations are necessary to succeed in other countries.

Failure to adapt to these changes often proves disastrous, which is a major reason why Google China failed .

7. Amazon Go

Amazon isn’t just an online retailer … it has now opened up physical grocery stores.

However, as with all of its business ventures, it aims to disrupt, transform, and dominate retail grocery stores.

In this case, Amazon wants to create grocery stores with zero clerks .

Amazon Go is a venture that promises no checkout lines, no hassle, and ultra-convenience.

8. Kindle and E-Books

Everyone knows that Kindle has been one of Amazon’s biggest innovations.

This product has single-handedly revolutionized the book publishing industry.

For better or for worse, Kindle has changed the way books are read, sold, and distributed.

Some estimates have placed Kindle e-book revenue at over half a billion dollars per year.

9. Affiliate Marketing

Early on in Amazon’s career, it opened its doors to online sales associates.

Members of Amazon Associates can earn revenue by sending web visitors to the sales giant.

According to Amazon, there are over 900,000 global members – all working to promote the company’s products and online presence.

10. Blue Origin

Technically speaking, Blue Origin is a different company from Amazon.

However, it’s worth noting that Amazon and Jeff Bezos can hardly be separated.

Without the famous founder’s extreme drive and vision, Amazon wouldn’t be what it is today.

And without his willingness to innovate, he never would have founded Blue Origin.

Like Elon Musk’s SpaceX, Blue Origin literally aims for the stars.

Its mission and goal – “millions of people living and working in space.”

Conclusion: Amazon Proves that Change Drives Success

It’s safe to say that Amazon’s defining trait has been its willingness to change.

What started as an online bookstore has become a multi-industry behemoth.

It has crushed companies that don’t innovate … it has revolutionized several industries … and it shows no signs of slowing.

The biggest lesson from this change management case study? Innovation and strategic change drive success.

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How Amazon is built to try and learn

The pace of change requires companies to continually learn and adapt. Beth Galetti, senior vice president of human resources at Amazon, describes how this reality has led Amazon to cultivate a culture of continuous learning and put in place the infrastructure to support it.

A culture of empowerment and continuous feedback

Our customers’ needs evolve and grow, so continuous learning is an imperative for all Amazonians. We capture this intent in our leadership principle, “Learn and Be Curious.” That principle is very important because we are frequently doing things that have never been done before. For this reason, there is often no playbook to teach nor experts to follow, so we empower people to try new things and learn along the way.

That philosophy of empowerment is reflected in the fact that we expect every employee to be an owner. If they see any issue that affects customer experience or have an idea about how to improve it, they’re expected to jump in, whether or not it’s in their area of expertise. We have a few awards to recognize this kind of behavior. One is called the “Just Do It” award. Jeff Bezos, Amazon’s founder and CEO, presents the employee or team responsible for the improvement with a Nike shoe during one of our corporate all-hands meetings. This simple but meaningful recognition reinforces the culture of empowering employees to take care of problems.

We also want learning to be continuous, so we have a culture of real-time feedback. Feedback is shared directly with the intention of making everyone involved better at delivering the best for our customers. To help with this, we built Connections, a mechanism that asks every employee a question each day when they log in to their computer or workstation. The answers provide aggregated feedback to their manager, highlighting areas to improve and surfacing relevant learning assets (such as online training) that the manager can access immediately. Questions are posed on a wide range of topics, from work environment to the manager’s effectiveness, team dynamics, and, most importantly, any barriers that are getting in the way of employees inventing on behalf of customers.

We also have an annual review process called “Forte,” where we focus on an employee’s “superpowers.” Superpowers are specific and distinctive descriptions of an employee’s unique, exceptional strengths. Forte is a simple, lightweight process in which every employee receives direct feedback from their manager, peers, and team members about their superpowers, as well as some growth ideas for the future.

Developing a learning infrastructure

Learning starts with helping people learn our culture as soon as they start here. We have a program called “Escape Velocity,” a three-day onboarding immersion experience designed specifically for externally hired vice presidents and directors. As the name implies, Escape Velocity is designed to help leaders leave the gravitational pull of their previous organization and enter a new orbit with Amazon. The program focuses on setting expectations and explaining our unique culture.

Current senior leaders teach new leaders the required mind-sets and skills to be successful, such as shifting from a “competitor and investor focus” to “customer obsession,” from a reliance on PowerPoint to well-thought-out narratives, and from a short-term emphasis on cost cutting or quarterly results to doing the right thing for the long-term. Instructors also present case studies and lead discussions on the importance of rigorous truth seeking and the nature of decision making at Amazon.

For ongoing learning, we have an internal wiki site that contains a wealth of information about Amazon, and we’ve built an internal video site called “Broadcast,” where people can post videos so that others can learn everything from specific coding practices to how to write a persuasive “working backward” document. We make it easy for anyone to publish and have developed a strong search engine to make the content easy to find. Since we know which videos perform best, we actively curate the content to make the most effective ones easily accessible. We have a manager learning hub, for example, where we put core learning courses and top videos. We also have classes for face-to-face training, but we rely on people to be self-reliant and scrappy by reaching out to get information.

Our Career Choice program is another example of ongoing learning. Career Choice classes are held in our fulfillment centers, and for those who enroll, Amazon prepays up to 95 percent of tuition and fees toward a vocational certificate or associate degree in fields ranging from IT and computer science to healthcare and transportation. The idea is to put people on a path toward well-paying, in-demand professions in their communities. We recognize that for some people, Amazon is a lifelong career, and for others, it’s a stepping stone.

Fast Times: How digital winners set direction, learn, and adapt

Creating experiences for learning.

We estimate that more than 90 percent of the learning that happens at Amazon comes from being challenged and having new experiences in their jobs.

Accordingly, we give our employees plenty of room to expand their roles. Due to our high rate of growth (31 percent year-over-year net sales revenue growth in 2017 alone), most Amazonians find that the scope of their job can grow just as fast. It often happens that an individual will have an idea approved, test it, develop it, and scale it. And soon they’re running a new program with a team. I know plenty of people who started here as lawyers or engineers but through this entrepreneurial process are now product owners or leaders of large businesses. It is not uncommon for an Amazonian to be promoted one or two levels in just a few years as they develop skills of running a project.

We typically have thousands of open positions available at any time and encourage Amazonians to try new experiences so they can learn new skills and gain expertise in other businesses. We make it easy for people to transfer to different teams as part of a deliberate program to give people new opportunities.

We have metrics to track if this experience-driven learning approach is working. We look at promotions and transfers, as well as the time between promotions. The biggest thing we look at is how the pace of development and product releases is increasing; that’s what really tells us if we’re growing and learning.

Thoughtful speed to get ideas to market

Nearly every new idea follows a “working backward” process. That means when an employee wants to present an idea, they start from the customer’s perspective and work backward from there. They write a narrative that provides answers to questions that are specifically related to the customer, such as, “How would the customer access the new product?”; “What would it cost?”; and “What are the benefits to the customer?” Then we discuss the idea and challenge it. There are a set of questions we typically ask, but we’re careful not to be too prescriptive, since we’re often asking people to do something that has never been done before. These narratives, called “PR/FAQs,” frequently take weeks to develop, with the inventor(s) carefully refining their thinking through multiple iterations and soliciting feedback from colleagues to help make the idea stronger and better for the customer.

To decide which ideas get the green light for moving forward, decision makers are pulled together for a meeting to review and discuss the concept. The meeting starts a bit like a study hall. The PR/FAQ is read quietly in the meeting, by all attendees, and the discussion only begins once everyone has read the full document. Once the discussion begins, the environment is intentionally designed to remove politics. The most senior person in the room frequently speaks last, so as not to sway the room before all diverse perspectives are considered and to improve the chances of finding the “path to yes” for the customer.

Once an idea is approved, it’s all hands-on deck to move the new product or service forward quickly. Typically, we will start with a pilot program, which provides meaningful feedback for the team to iterate for the next version. If the idea performs well, we make sure to allocate resources quickly so it can scale. For example, the PR/FAQ for Prime Now—our one-hour delivery service—went from concept to launch in only 111 days. There was a lot of iteration that took place during those 111 days, but once we hit on a formula that worked, we launched Prime Now in New York City, and over the following months we expanded it to customers worldwide.

Hiring the best “builders”

One of the ways we work to ensure we’re hiring the best candidates is through our Bar Raiser program. We want every hire we make to be better than half of the people currently working here at that level. We carefully select tenured Amazonians to be Bar Raisers, those who have conducted more than 25 interviews and “are right, a lot” in their assessment of candidates. They serve as a neutral third party on the interview panel, meaning that they’re not in the hiring manager’s chain of command. For an offer to be extended, the Bar Raiser must agree to hire the candidate.

Since we’re a company of builders, we look for people who know how to invent, think big, and deliver results. We hire based on our culture and passion for innovation, not solely based on whether a candidate has previously done the job. We want people with a beginner’s mind-set, eager to learn new things.

My own experience at Amazon is a perfect example of this. My professional background is in technology, engineering, operations, and transportation, so I applied for a role in Amazon’s transportation organization. After a full day of interviews, the recruiter called me back to ask if I’d be interested in a role in HR. I was slightly baffled, since I had no experience in HR and thought they had confused me with another candidate. The recruiter explained that I was at my most passionate and engaged when I talked about my experiences developing people, leading large organizations, and growing teams. Since Amazon is hiring tens of thousands of people each year, and needs to develop those individuals and grow their skills, they thought my unique background combining engineering, technology, and leadership development would be a great fit. It was an unusual opportunity, and I can’t imagine many other companies willing to take such a risk.

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Home » Change Management » Amazon: The Ultimate Change Management Case Study

Amazon: The Ultimate Change Management Case Study

Amazon’s innovations have helped it become extremely successful, making it an excellent change management case study.

Since it was formed, Amazon has innovated across countless areas and industries, including:

• Warehouse automation
• The web server industry
• Streaming video and on-demand media
• Electronic books

Considering that Amazon started as an online bookstore, these accomplishments are quite impressive.

Examining Amazon as a change management highlights a few important business lessons:

• Innovation fuels success, especially in today’s digital economy
• Speed is the ultimate weapon
• Those who resist organizational change can easily get left behind

Below, we’ll examine some of Amazon’s changes … and hopefully discover a few reasons why it has become so successful.

Let’s get started.

Below are 10 ways Amazon has changed its business, transforming itself far beyond a mere online bookseller.

In no particular order…

1. Amazon Web Services

When Amazon Web Services (AWS) started out, most developers didn’t take it seriously.

A decade later, it was the go-to cloud server company in the world.

In fact, Bezos has even said that AWS was the biggest part of the company.

Since it has more capacity than its nearest 14 competitors combined, this shouldn’t come as a surprise.

2. Whole Foods

After acquiring Whole Foods , Amazon began making changes to the grocery store chain.

A few of these include:

• Adding Amazon products to the shelves
• Integrating Whole Foods and Amazon Prime
• Internal restructuring

Other programs include food delivery from Whole Foods, rewards for customers using Amazon credit cards, and discounts for Prime members.

3. Delivery

Amazon has drastically innovated product delivery.

For instance, customers with Prime memberships can enjoy free two-day delivery.

In certain cities , Prime members can also get free same-day or one-day delivery.

And with its drone delivery program on the horizon, customers may be able to receive orders in 30 minutes or less .

4. Warehouse Automation

Amazon warehouses have undergone major technological transformations.

Currently, Amazon warehouses uses robots to collect and transport many of its products.

In coming years, though, even more of the company’s 200,000+ warehouse workers could be replaced by robots .

In 2016 alone, it increased robot workers by 50% .

5. TV and Prime Video

Another innovation of the former bookseller is its foray into TV, movies, and video.

Amazon began by selling videos and DVDs. Now it streams, rents, and sells digital copies of videos.

On top of that, the company has joined YouTube, Netflix, and other tech giants by producing its own movies and TV shows.

6. Amazon in Other Countries

Change managers would also be interested in how Amazon adapts itself to other countries’ economies.

In India, for instance, Amazon has been forced to adopt unique measures.

These include:

• Using mom-n-pop stores as delivery locations
• Hiring bicycle or motorcycle couriers for last-mile deliveries
• Creating mobile tea carts that serve tea and teach business owners about e-commerce

These types of innovations are necessary to succeed in other countries.

Failure to adapt to these changes often proves disastrous, which is a major reason why Google China failed .

7. Amazon Go

Amazon isn’t just an online retailer … it has now opened up physical grocery stores.

However, as with all of its business ventures, it aims to disrupt, transform, and dominate retail grocery stores.

In this case, Amazon wants to create grocery stores with zero clerks .

Amazon Go is a venture that promises no checkout lines, no hassle, and ultra-convenience.

8. Kindle and E-Books

Everyone knows that Kindle has been one of Amazon’s biggest innovations.

This product has single-handedly revolutionized the book publishing industry.

For better or for worse, Kindle has changed the way books are read, sold, and distributed.

Some estimates have placed Kindle e-book revenue at over half a billion dollars per year.

9. Affiliate Marketing

Early on in Amazon’s career, it opened its doors to online sales associates.

Members of Amazon Associates can earn revenue by sending web visitors to the sales giant.

According to Amazon, there are over 900,000 global members – all working to promote the company’s products and online presence.

10. Blue Origin

Technically speaking, Blue Origin is a different company from Amazon.

However, it’s worth noting that Amazon and Jeff Bezos can hardly be separated.

Without the famous founder’s extreme drive and vision, Amazon wouldn’t be what it is today.

And without his willingness to innovate, he never would have founded Blue Origin.

Like Elon Musk’s SpaceX, Blue Origin literally aims for the stars.

Its mission and goal – “millions of people living and working in space.”

Conclusion: Amazon Proves that Change Drives Success

It’s safe to say that Amazon’s defining trait has been its willingness to change.

What started as an online bookstore has become a multi-industry behemoth.

It has crushed companies that don’t innovate … it has revolutionized several industries … and it shows no signs of slowing.

The biggest lesson from this change management case study?

Innovation and change drive success .

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• Jan 9, 2019

Amazon’s Marketing and Change Management

Updated: Aug 30, 2022

Started back in 1994, during the period of internet infancy, Amazon was an online platform that offers a wide range of books and literature products worldwide. Amazon’ success as one of the pioneers in the e-commerce industry could be attributed to extraordinarily successful management as well as an unorthodox marketing strategy. This article will discuss how Amazon was managed as well as the inspiring marketing strategy adopted by Amazon that has brought them to become one of the leading e-commerce company worldwide.

Change Management

Leadership:  As leader that drove Amazon to its success, Jeff Bezos is one of the key figurehead in the history of his own company. Often referred as an unconventional leader, Bezos’ leadership is one of the facets that distinct set Amazon aside from other companies. Known by his almost obsessive customer centric management or leadership style, Bezos placed his customers at the top of Amazon’s priority. He tried his best to understand his customers’ preferences and dislikes and build his business strategies on that ground.

Bezos is known to ensure that there are no delays in every aspect of customer experience (from website through product delivery). Bezos leadership style reflects his customer centric values with the intense 500 measures of performance related goals and high expectations of employee’s performance. Despite being a reportedly  happy person, he is also a leader that put emphasis on almost every single aspects of how the company was run; from the size of each team and their productivity (take a look on the two-pizzas-or-less policy ), office furniture and waste management. The reportedly  intense and high work demands might have led to a high turnover rate at Amazon; however, Bezos high expectations and demands for their employees have also pushed Amazon to be efficient and also receptive to constant changes and innovation that is not uncommon in today’s market.

Open System Management.  Throughout its journey, Amazon has evolved from an online platform that only provided books into a giant chain of diverse products such as web development platform, book review platform, audio books services, and a platform that offers customers with a wildly wide range of products (from groceries to the recently released gadgets). Amazon’s innovation and exploration of new ideas has yet to stop or slow down. Over 20 years, half a million (employees in US alone), 75 countries and US$ 100 billions later, Amazon continues to explore new ideas, such as getting your products delivered by a man-less drones !

Bezos encourages data driven innovation and rigorous testing of an idea prior to deployment. With customer satisfaction as its ultimate goal, Amazon employees are encouraged to continues to integrate and create new ways of servicing customers better and faster. Adapting Open System Management , feedback from customers and other departments is taken seriously in the process of project development and after. Products and their features are adapted to meet the market demands and beyond, not the aspirations of the developers and innovators alone.

Here are some key points we can take from Amazons’ success in change management and innovation:

1. Acknowledge the importance of innovation, because “what’s dangerous is not  to evolve.” - Jeff Bezos

2. Focus on what your customers and market are asking

3. Shoot for the moon  and be patient of the process, as a great idea may now require “many iterations” and “some number of years to get it right,” - Jeff Bezos  (as quoted by Business 2 Community )

4. When the targets and aspirations are high and employees are not as motivated to strive for the common goal, the management at times might need to nudge  (or maybe shove) evolutionary ideas onto the organization.

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Lessons from Amazon’s Early Growth Strategy

If you’re interested in strategies for scaling start-ups, this episode is for you.

• Apple Podcasts

So much has been written about Amazon’s outsized growth. But Harvard Business School professor Sunil Gupta says it’s the company’s unusual approach to strategy that has captured his scholarly attention. Gupta has spent years studying Amazon’s strategy and its founder and former CEO Jeff Bezos.

In this episode, Gupta shares how Amazon upended traditional corporate strategy by diversifying into multiple products serving many end users, instead of having a narrow focus.

He argues that some of Amazon’s simplest business strategies — like their obsession with customers and insistence on long-term thinking — are approaches that companies, big and small, can emulate.

Key episode topics include: strategy, innovation, leadership, scaling, Jeff Bezos, long-term thinking, customer focus.

HBR On Strategy curates the best case studies and conversations with the world’s top business and management experts, to help you unlock new ways of doing business. New episodes every week.

• Listen to the full HBR IdeaCast episode: How Jeff Bezos Built One of the World’s Most Valuable Companies (2020)
• Find more episodes of HBR IdeaCast
• Discover 100 years of Harvard Business Review articles, case studies, podcasts, and more at HBR.org .

HANNAH BATES: Welcome to HBR On Strategy , case studies and conversations with the world’s top business and management experts, hand-selected to help you unlock new ways of doing business.

So much has been written about Amazon’s outsized growth. But Harvard Business School professor Sunil Gupta says it’s the company’s unusual approach to strategy that has captured his scholarly attention.

Gupta has spent years studying Amazon’s strategy and its founder and former CEO, Jeff Bezos.

In this episode, Gupta shares how Amazon upended traditional corporate strategy by diversifying into multiple products serving many end users instead of focusing more narrowly.

And he argues that some of their simplest business strategies – like their obsession with the customer and insistence on long-term thinking – are approaches that companies, big and small, should emulate.

If you’re interested in innovation strategy, this episode is for you. It originally aired on HBR IdeaCast in November 2020. Here it is.

ALISON BEARD:  Welcome to the HBR IdeaCast from Harvard Business Review.  I’m Alison Beard.

If you had to name the most successful business leader alive today, who would you say?  I can’t hear you from my basement podcasting room, but I would bet that for many of you, the answer is Jeff Bezos, CEO of Amazon.  This is a man who over the past 25 years turned his online bookstore startup into a diversified company currently valued at $1.6 trillion.

Amazon is a digital retailing juggernaut, it’s also a web services provider, media producer, and manufacturer of personal technology devices like Kindle and Echo.  Oh, and Bezos also owns the Washington Post and Blue Origin, a space exploration company.  Forbes tells us he is the richest person in the world.

How did he accomplish so much?  How did he change the business landscape?  What mistakes has he made along the way?  A new collection of Bezos’s own writing, which full disclosure, my colleagues at Harvard Business Review Press have published, offer some insights.  Here’s a clip from one speech that’s included.  The book is called Invent and Wander.

And our guest today, who has spent years studying both Amazon and Bezos, is here to talk with me about some of the key themes in it, including the broad drivers of both the company and the CEO’s success.  Sunil Gupta is a professor of business administration at Harvard Business School and cochair of its executive program, and cochair of its executive program on driving digital strategy, which is also the title of his book.  Sunil, thanks so much for being on the show.

SUNIL GUPTA:  Thank you for having me, Alison.

ALISON BEARD:  So Invent and Wander.  I get that Bezos is inventive.  You know, he created a new way for us to buy things – everything.  How is he also a wonderer?

SUNIL GUPTA:  So he’s full of experiments.  His company and his whole style is known for experimentation, and he says that in so many words that if you want big winners, then you have to be willing to have many failures.  And the argument is, one big winner will take care of a thousand failed experiments.  So I think that’s the wandering part.  But also his experiments are not aimless.  There is a certain thought and process behind what experiments to do and why they will connect to the old, old picture of what Amazon is today.

ALISON BEARD:  And your expertise is in digital strategy.  How does he break the traditional rules of strategy?

SUNIL GUPTA:  So for the longest time the way, at least I was taught in my MBA program and the way we teach to our MBA students and executives, is strategy is about focus.  But if you look at Amazon, Amazon certainly doesn’t look like it’s focusing on anything, so obviously Jeff Bezos missed that class, otherwise it’s a very, very different thing.

And then you’d say, why is it that so called lack of focus strategy seems to be working for Amazon?  And I think the fundamental underlying principle that he’s guiding his whole discussion of strategy is, he’s changed the rules of strategy.  So the old rules of strategy were, the way you gained competitive advantage is by being better or cheaper.  So if I am selling you a car, my car is better of cheaper.  But the inherent assumption in that strategy statement is, I’m selling one product to one customer.  And what Amazon is basically arguing is, the digital economy is all about connection.  We have got to connect products and connect customers.  Let me explain why that is so powerful.

So connecting products, here the idea is, I can sell you, this is a classic razor and blade strategy.  I can sell you a razor cheap in order to make money on the blade.  So I can sell you Kindle cheap in order to make money on the ebooks.  Now, at some level you might say, hey, razor and blade have been around forever.  What’s so unique today?  I think unique today is razor could be in one industry and blades could be in completely different industrys.

So for example, if you look at Amazon’s portfolio of businesses, you sort of say, not only Amazon is an e-commerce player, but also is making movies and TV shows, its own studio.  Well, why does it make sense for an e-commerce player, an online retailer to compete with Hollywood.  Well, Walmart doesn’t make movies.  Macy’s doesn’t make movies?  So why does it make sense for Amazon to make movies?

And I think once you dig into it, the answer becomes clear that the purpose of the movies is to keep and gain the Prime customers. Two day free shipping is fine, but if  you ask me to pay $99 or $119 for two day free shipping, I might start doing the math in my head, and say, OK, how many packages do I expect to get next year?  And is the Prime membership worth it or not?

But once you throw in, in addition to the two-day free shipping, you throw in some TV shows and movies that are uniquely found only on Amazon, I can’t do this math.  And why is Prime customers important to Amazon?  Because Prime customers are more loyal.  They buy three or four times more than the non-Prime customers, and they’re also less price sensitive.

And in fact, Jeff Bezos has said publicly that every time we win a Golden Globe Award for one of our shows, we sell more shoes.  So this is, and he said it in your book, Invent and Wander, also, that we might be the only company in the world which has figured out how winning Golden Globe Awards can actually translate into selling more products on the online commerce.

So this is a great example of the razor being in a very different industry and blade being in another industry.  Take another example.  Amazon has a lending business where they give loans to small and medium enterprises. If Amazon decides to compete with banks tomorrow, Amazon can decide to offer loans to the small merchants at such a low price that banks would never be able to compete.  And why would Amazon be able to do that?  Because Amazon can say, hey, I’m not going to make money on loans, as much money on loans, but I’ll make more money when these businesses, small businesses grow and do more transactions on my marketplace platform.  And I get more commissions.  So again, loan can become my razor in order to help the merchants grow and make money on the transaction and the commission that I get from that.  The moment I make somebody else’s, in this case the banks, core business my razor, they will make a very hard time competing.  So I think that’s the key change, the fundamental rules of strategy and competition in that direction.

The second part of connection is connecting customers, and this is the classic network effect.  So marketplace is a great example of network effects.  The more buyers I have, the more sellers I have.  The more sellers I have, the sellers I have, the more buyers I get, because the buyers can find all the items.  And that becomes flywheel effect, and it becomes a situation where it’s very hard for a new player to complete with Amazon.

ALISON BEARD:  In this diversification that Amazon has done, how have they managed to be good at all of those things?  Because they’re not focused.  You know, they’re not concentrated on an area of specific expertise.  So how have they succeeded when other companies might have failed because they lacked that expertise, or they were spreading themselves too thin?

SUNIL GUPTA:  So I think it depends on how you define focus.  Most of us, when we define focus, we sort of define focus by traditional industry boundaries, that I’m an online retailer, therefore going into some other business is lack of focus.  The way Amazon thinks about is focus on capabilities.

So if you look at it from that point of view, I would argue that Amazon had three fundamental core capabilities.  Number one, it’s highly customer focused, not only in its culture, but also in its capability in terms of how it can actually handle data and leverage data to get customer insight.  The second core capability of Amazon is logistics.  So it’s now a world class logistics player.  It uses really frontier technology, whether it’s key word, robotics, computer vision, in its warehouse to make it much more efficient.

And the third part of Amazon’s skill or the capability is its technology.  And a good example of that is Amazon Web Services, or AWS.  And I think if you look at these three core capabilities, customer focus and the data insight that it gets from that, the logistics capability, and the technology, everything that Amazon is doing is some way or the other connected to it.  In that sense, Amazon, and there’s no lack of focus, in my judgment on Amazon.

Now, if he starts doing, starts making cream cheese tomorrow or starts making airplane engines, then I would say, yes, it’s got a lack of focus.  But one of the other things that Jeff Bezos has said again and again is this notion of work backwards and scale forward.  And what that means is, because you’re customer obsessed, you sort of find ways to satisfy customers, and if that means developing new skills that we don’t have because we are working backwards from what the customer needs are, then we’ll build those skills.

So a good example of that is, when Amazon started building Kindle, Amazon was never in the hardware business.  It didn’t know how to build hardware.  But Bezos realized that as the industry moved, people are beginning to read more and more online, rather, or at least on their devices, rather than the physical paper copy of a book.  So as a result, he says, how do we make it easier for consumers to read it on an electronic version?  And they’re spending three years learning about this capability of hardware manufacturing.  And by the way, Kindle came out long before iPad came out.  And of course, that capability now has helped them launch Echo and many other devices.

ALISON BEARD:  Right.  So it’s the focus on the customer, plus a willingness to go outside your comfort zone, the wander part.

SUNIL GUPTA:  Exactly.

ALISON BEARD:  Yeah.  How would you describe Bezos’s leadership style?

SUNIL GUPTA:  So I think there are at least three parts to it.  One is, he said right from day one that he wants to be a long-term focus.  The second thing is being customer obsessed.  And many times he has said that he can imagine, in the meetings he wants people to imagine an empty chair.  That is basically for the customer. And he says, we are not competitor focused.  We are not product focused.  We are not technology focused.  We are customer focused.  And the third is, willingness to experiment.  And fail, and build that culture in the company that it’s OK to fail.

ALISON BEARD:  What about personally, though?  Is he a hard charger?  Is he an active listener?  What’s it like to be in a room with him?

SUNIL GUPTA:  Oh, he’s certainly a hard charger.  I mean, he’s also the kind of guy, when he hires people, he says, you can work long, hard, or smart.  But at Amazon, you can choose two out of three.  And I think this is similar to many other leaders.  If you look at Steve Jobs, he was also a very hard charging guy.  And I think some people find it exhilarating to work with these kind of leaders.  Some find it very tough.

ALISON BEARD:  Do you think that he communicates differently from other successful CEOs?

SUNIL GUPTA:  So the communication style that he has built in the company is the very famous now, there’s no PowerPoints.  So it’s a very thoughtful discussion.  You write six-page memos, which everybody, when their meeting starts, everybody sits down and actually reads the memo.

In fact, this was a very interesting experience that I had.  One of my students, who was in the executive program, works at Amazon in Germany.  And he is, he was at that point in time thinking of moving to another company and becoming a CEO of that company.  So he said, can I talk to you about this change of career path that I’m thinking about?  I said, sure.  So we set up a time, and five minutes before our call, he sends me an email with a six-page memo.  And I said, well, shouldn’t he have sent this to me before, so I could at least look at it?  He says, no, that’s the Amazon style.  We’ll sit in silence and read it together.  And so I read it together, because then you’re completely focused on it.  And then we can have a conversation.  But this discipline of writing a six-page memo, it’s a very, very unique experience, because you actually have to think through all your arguments.

ALISON BEARD:  You also mentioned the long term focus, and that really stood out for me, too, this idea that he is not at all thinking of next year.  He’s thinking five years out, and sometimes even further.  But as a public company, how has Amazon been able to stick to that?  And is it replicable at other companies?

SUNIL GUPTA:  I think it is replicable.  It requires conviction, and it requires a way to articulate the vision to Wall Street that they can rally behind.  And it’s completely replicable.  There are other examples of companies who have followed a similar strategy.  I mean, Netflix is a good example.  Netflix hadn’t made money for a long period of time.  But they sold the vision of what the future will look like, and Wall Street bought that vision.

Mastercard is exactly the same thing.  Ajay Banga is giving three year guidance to Wall Street saying, this is my three-year plan, because things can change quarter to quarter.  I’m still responsible to tell you what we are doing this quarter, but my strategy will not be guided by what happens today.  It will be guided by the three-year plan that we have.

ALISON BEARD:  There are so many companies now that go public without turning any profit, whereas Amazon now is printing money, and thus able to reinvest and have this grand vision.  So at what point was Bezos able to say, right, we’re going to do it my way?

SUNIL GUPTA:  I think he said it right from day one, except that people probably didn’t believe it.  And in fact, one of the great examples of that was, when he was convinced about AWS, the Amazon Web Services, that was back in the early 2000s, when a majority of the Wall Street was not sure what Jeff Bezos was trying to do, because they say, hey, you are an online retailer.  You have no business being in web services.  That’s the business of IBM.  And that’s a B2B business.  You’re in a B2C business.  Why are you going in there?

And Bezos said, well, we have plenty of practice of being misunderstood.  And we will continue with our passion and vision, because we see the path.  And now he’s proven it again and again why his vision is correct, and I think that could give us more faith and conviction to the Wall Street investors.

SUNIL GUPTA:  Oh, absolutely.  And he’s one of the persons who has his opinion, and you always surround yourself with people better than you.

ALISON BEARD:  How has he managed to attract that talent when it is so fiercely competitive between Google, Facebook, all of these U.S. technology leaders?

SUNIL GUPTA:  So a couple of things I would say.  First of all, it’s always good fun to join a winning team.  And all of us want to join a winning team, so this certainly is on a trajectory which is phenomenal.  It’s like a rocket ship that is taking off and has been taking off for the last 25 years.  So I think that’s certainly attractive to many people, and certainly many hard charging people who want to be on a winning team.

And a second thing is, Amazon’s culture of experimentation and innovation.  That is energizing to a lot of people.  It’s not a bureaucracy where you get bogged down by the processes.  So the two type of decisions that we talked about, he gives you enough leeway to try different things, and is willing to invest hundreds of millions of dollars into things that may or may not succeed in the future.  And I think that’s very liberating to people who are willing to take on the ownership and build something.

ALISON BEARD:  But don’t all of the tech companies offer that?

SUNIL GUPTA:  They do, but if you think about many other tech companies, they’re much more narrow in focus.  So Facebook is primarily in social media.  Google is primarily in search advertising.  Yes, you have GoogleX, but that’s still a small part of what Google does.  Whereas if you ask yourself what business is Amazon in, there are much broader expansive areas that Amazon has gone into.  So I think the limits, I mean, Amazon does not have that many limits or boundaries as compared to many other businesses in Silicon Valley.

ALISON BEARD:  So let’s talk a little bit about Bezos’s acquisition strategy.  I think the most prominent is probably Whole Foods, but there are many others.  How does he think about the companies that he wants to bring in as opposed to grow organically?

SUNIL GUPTA:  So some acquisitions are areas where he thinks that he can actually benefit and accelerate the vision that he already has.  So for example, the acquisition of Kiva was to improve the efficiency and effectiveness of the systems that he already put in place in his warehouse.  And logistics and warehouse is a key component or key part of Amazon’s business, and he saw that Kiva already was ahead of the curve in technology that he probably wanted to have that in his own company.  So that was obvious acquisition, because that fits in the existing business.

Whole Foods is kind of a slightly different story, in my judgment, because I some ways, you can argue, why is Amazon, an online player, buying an offline retail store, Whole Foods?  And in fact, they bought it at 27% premium.  So that doesn’t make sense for an online retailer commerce to go to offline channels.  And I think, in fact, part of the reason in my judgment is, it’s not just Whole Foods, but it’s about the food business, per se.  And why is Amazon so interested in food?  In fact, Amazon has been trying this food business, online food delivery for a long period of time without much success.  And Whole Foods was one, another way to try and get access to that particular business.  And why is that so important to Amazon, even though you could argue, food is a low margin business?

And I would say, part of the reason is, food is something, grocery is something that you buy every week, perhaps twice a week.  And if I, as Amazon, can convince you to buy grocery online from Amazon, then I’m creating a habit for you to come onto Amazon every week, perhaps twice a week.  And once you are on Amazon, you will end up buying other products on Amazon.  Whereas if you are buying electronics, you may not come to Amazon every day.

So this is a habit creation activity, and again, it may not be a very high margin activity to sell you food.  But I’ve created a habit, just like Prime.  I’ve created a loyal customer where you think of nothing else but Amazon for your daily needs, and therefore you end up buying other things.

ALISON BEARD:  And Amazon isn’t without controversy.  You know, and we should talk about that, too.  First, there are questions about its treatment of warehouse employees, particularly during COVID.  And Bezos, as you said, has always been relentlessly focused on the customer.  But is Amazon employee centric, too?

SUNIL GUPTA:  So I think there is definitely some areas of concern, and you rightly said there is a significant concern about the, during the COVID, workers were complaining about safety, the right kind of equipment.  But even before COVID, there were a lot of concerns about whether the workers are being pushed too hard.  They barely have any breaks.  And they’re constantly on the go, because speed and efficiency become that much more important to make sure customers always get what they are promised.  And in fact, more than promised.

Clearly Amazon either hasn’t done a good job, or hasn’t at least done the public relations part of it that they have done a good job.  Now, if you ask Jeff Bezos, he will claim that, no, actually, they have done things.  For example, they offer something called carrier choice, where they give 95% tuition to the employees to learn new skills, whether they’re relevant to Amazon or not.  Pretty much like what Starbucks does for its baristas, for college education and other things.  But I think more than just giving money or tuition, it requires a bit of empathy and sense that you care for your employees, and perhaps that needs, that’s something that Amazon needs to work on.

ALISON BEARD:  And another challenge is the criticism that it has decimated mom and pop shops.  Even when someone sells through Amazon, the company will then see that it’s a popular category and create it itself and start selling it itself.  There’s environmental concerns about the fact that packages are being driven from warehouses to front doors all over America.  And boxes and packaging.  So how has Bezos, how has the company dealt with all of that criticism?

SUNIL GUPTA:  They haven’t.  And I think those are absolutely valid concerns on both counts, that the small sellers who grow to become reasonably big are always under the radar, and there are certainly anecdotal evidence there, small sellers have complained that Amazon had decided to sell exactly the same item that they were so successful in selling, and becoming too big is actually not good on Amazon, because Amazon can get into your business and wipe you away.  So that’s certainly a big concern, and I think that’s something that needs to be sorted out, and Amazon needs to clarify what its position on that area is, because it benefits from these small sellers on his platform.

And your second question about environmental issues is also absolutely on the money, because not only emission issues, but there’s so many boxes that pile in, certainly in my basement, from Amazon.  You sort of say, and it’s actually ironical that Millennials who are in love with Amazon are extremely environmentally friendly.  But at the same time, they would not hesitate to order something from Amazon and pile up all these boxes.  So I think Amazon needs to figure out a way to think about both those issues.

ALISON BEARD:  And at what point will it have to?  I mean, it seems to be rolling happily along.

SUNIL GUPTA:  Well, I think those issues are becoming bigger and bigger, and it’s certainly in the eye of the regulators, also, for some of these practices.  And not only because it’s too big, and there might be monopoly concerns, but these issues will become larger, and any time you become a large company, you become the center of attraction for broader issues than just providing shareholder value.

ALISON BEARD:  Yeah.  So those are weaknesses possibly for the company.  What are some of Bezos’s personal weaknesses that you’ve seen in studying him and the company?

SUNIL GUPTA:  So I think one thing that stands out to me, and at least in the public forums, I have not seen any empathy.  And it’s, I mean, we talk about that the leaders have, should have three qualities.  They should be competent.  They should have a good character.  And they should have compassion.  So he’s certainly very competent.  I mean, he’s brilliant in many aspects, right, from the computer vision and AI and machine learning, to the nuances of data analytics, to the Hollywood production, etc.  He also seems to have good character, at least I have not heard any personal scandals, apart from his other issues in his personal life, perhaps.

Those characteristics of competence and character make people respect you.  What makes people love you is when you show compassion, and at least I haven’t seen compassion or empathy that comes out of him.  I mean, he certainly comes across as a very hard charging, driven person, which probably is good for business.  But the question of empathy is perhaps something lacking right now.

ALISON BEARD:  Yeah.  The other issue is his just enormous wealth.  He did invent this colossally valuable company, but should anyone really be that rich?

SUNIL GUPTA:  Well, I guess that’s, you can say that’s the good or the bad thing about capitalism.  But I think, and again, my personal view is there’s nothing wrong in becoming rich, if you have been successful and done it with hard work and ingenuity.  But how you use your wealth is something that perhaps will define Jeff Bezos going forward.  I think Bill Gates is a great example how he actually has used his wealth and his influence and his expertise and his brilliance into some certain thing that actually is great for humanity.

Now, whether Jeff Bezos does that down the road, I don’t know, whether his space exploration provides that sort of outlet which is both his passion as well as good for humanity, I don’t know.  But at some point in time, I think it’s the responsibility of these leaders to sort of say, my goal is not simply to make money and make my shareholders rich, but also help humanity and help society.

ALISON BEARD:  If you’re talking to someone who’s running a startup, or even a manager of a team at a traditional company, what is the key lesson that you would say, this is what you can learn from Jeff Bezos?  This is what you can put to work in your own profession?

SUNIL GUPTA:  So I would say two things that at least I would take away if I were doing a startup.  One is customer obsession.  Now, every company says that, but honestly, not every company does it, because if you go to the management meetings, if you go to the quarterly meetings, you suddenly go focus on financials and competition and product.  But there’s rarely any conversation on customers.  And I think, as I mentioned earlier, that Jeff Bezos always tells his employee to think of the imaginary chair in which a customer is sitting, because that’s the person that we need to focus on.  Howard Shultz does the same thing at Starbucks, and that’s why Starbucks is so customer focused.

So I think that’s the first part.  And the argument that Bezos gives is, customers are never satisfied.  And that pushes us to innovate and move forward, so we need to innovate even before the rest of the world even sees that, because customers are the first ones to see what is missing in the offering that you have.

And the second I would say that I would take away from Jeff Bezos is the conviction and passion with what you do.  And many times that goes against the conventional wisdom.  And the Amazon Web Services is a great example of that.  The whole world, including the Wall Street Journal and the Wall Street analysts were saying, this is none of Amazon’s business to do web services.  But he was convinced that this is the right thing to do, and he went and did that.

And part of that conviction may come from experiments.  Part of that conviction comes from connecting the dots that he could see that many other people didn’t see.  I mean, that’s why he went, left his job, and went to Seattle to do the online bookstore, because he could see the macro trends as to what the Internet is likely to do.  So, I think that’s the vision that he had.  And once you have the conviction, then you follow your passion.

ALISON BEARD: Sunil, thanks so much for coming on the show.

SUNIL GUPTA:  Thank you for having me. Alison.

HANNAH BATES: That was Harvard Business School professor Sunil Gupta, in conversation with Alison Beard on the HBR IdeaCast .

We’ll be back next Wednesday with another hand-picked conversation about business strategy from Harvard Business Review. If you found this episode helpful, share it with your friends and colleagues, and follow our show on Apple Podcasts, Spotify, or wherever you get your podcasts. While you’re there, be sure to leave us a review.

And when you’re ready for more podcasts, articles, case studies, books, and videos with the world’s top business and management experts, find it all at HBR.org.

This episode was produced by Mary Dooe, Anne Saini, and me, Hannah Bates. Ian Fox is our editor. And special thanks to Maureen Hoch, Nicole Smith, Erica Truxler, Ramsey Khabbaz, Anne Bartholomew, and you – our listener. See you next week.

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Amazon: How they manage successful change projects

Feb 26, 2019 | Innovation

Amazon are one of the most relentless innovators in the retail marketplace. By their nature, they are a disruptor and thus thrive on making changes to the industry. However, they’re not satisfied by just making 1 change and then settling into a standard day to day operation. Instead, they plan change after change and make them happen on a continual basis. But do you know what it is that sets Amazon apart? What is it that they do differently to drive new change into their business? In this blog post, we’ll explore what the real impact of Amazon’s innovation is. Plus some of the tangible things they do to make that happen.

What’s the impact of Amazon’s relentless drive for change?

With Amazon’s ongoing drive for change, we now hear about the “Amazon Effect”. Whilst many consumers assume this could be about putting smaller retailers out of business, it turns out the reality is different.

Instead, the “Amazon Effect” is calling for all retailers to up their game. It is driving retail businesses to focus on the customer rather than sitting in the status quo. Poor and mediocre retailers decline but the best retailers thrive. Perhaps you could consider this a form of evolution, similar to Darwin’s theory of survival of the fittest.

The “Amazon Effect” is explored much more in a brilliant book, Amazon: How the World’s Most Relentless Retailer will Continue to Revolutionize Commerce. Written by Natalie Berg and Miya Knights, you can pick up a copy in all good bookstores or of course on Amazon .

How does Amazon make this continual change happen?

The recipe for how to create a change culture is of course a complex formula. However, I wanted to share 2 particular points of difference which put Amazon in a different playing field.

Focusing on customer benefit

I interviewed the authors of the “Amazon” book recently. I asked Natalie Berg how Amazon continue to drive changes:

“They don’t do PowerPoint slides. Instead, if you have an idea for a new product, you put together a press release as if the product was launching today.”

This is a very different spin on the usual way of starting projects. They’re not focused on the business benefits but instead on visualising on the end point. Then Berg continues:

“In that press release, you have to convey all the benefits to the customer and then you work backwards and develop the actual product.”

This is an excellent example of how they have a very clear focus on the customer. In turn, they are inspired and motivated to continually improve for customers.

Hiring diligently

I remember that an old manager of mine went for a role at Amazon and I was amazed by the diligence of their recruitment process. There were 10+ interviews to go through and even as a referee, I had a detailed 30-40 minute interview! This is far more than I’ve ever experienced or come across.

What this tells us is that they hire dedicated and determined people. Also and perhaps obviously, the quality will be high too as there are so many barriers and opportunities to say “no” to a candidate too.

So, how will you focus on driving high quality people?

The bottom line: focusing on the customer

Amazon are continuing to drive changes in retail. As they expand into new markets, we’ll probably see their pace of change accelerate if anything. In turn, they’ll ask other retailers to step up to the challenge of being a brilliant, customer focused retailer. So if you’re willing to take up that challenge, you need to ensure that you continually focus of customers and have a high quality, driven team.

So, what are the points of difference that will help you to complete and stay nimble?

Find out more, listen to the Retail Transformation Show podcast

Oliver Banks spoke to Natalie Berg and Miya Knights on the Retail Transformation Show podcast.

Listen to episode 16 – How Amazon are transforming retail . Here’s a little sneak peak at that episode.

Then, listen to the 2nd part in episode 17 – Beyond the age of Amazon . And here’s a teaser trailer for that one.

About the Author, Oliver Banks

Oliver Banks is an expert at delivering retail change projects and programmes. He’s tried a number of different techniques over his 15 years of working on different types and sizes of projects. He blends classic project management techniques from PRINCE2, PMBOK and Lean Six Sigma with a dose of pragmatism and business reality to ensure retail projects are led, managed and delivered successfully.

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How Amazon Is a Roadmap for Digital Transformation Success

No matter what type of organization you are, it is safe to say that you probably wouldn’t hurt by adopting some of Amazon’s best practices. Many of us interact with Amazon and, depending on what part of the world you are in, Alibaba daily. These are two massive eCommerce providers that have not only revolutionized how we go about shopping on a regular basis, but they have also cemented themselves as an integral part of society. They somehow manage to do this all while maintaining an unparalleled customer experience.

With the world becoming increasingly data-driven every day, we can anticipate the success of these two giants to increase. So, what are some of the lessons we can learn from Amazon ? Which best practices can we apply from these leading eCommerce companies to act as a roadmap for a successful digital transformation , regardless of our industry?

Table of Contents

Ecommerce technologies can provide a template or a blueprint for how we interact with our customers.

Regardless of what product or service we provide to our customers, it is the customer experience that establishes loyalty and trust. Amazon and Alibaba’s fundamental business goal and focus is the distribution of physical products. Yet, that is not what they're best known for. They are best known for the customer experience they create for their consumers.

They simplify the buying process. They make it so easy to find information about a product. They make the ordering process very intuitive. They make shipping, delivery, and even returns incredibly transparent and easy.

All organizations, no matter the industry, need to keep their customer experience top of mind. Taking it a step further to create well-tailored, unique experiences will only drive growth in a company’s reputation and bottom line. Even if you're an organization that doesn't provide retail products or services to customers directly, leveraging the discipline shown by Amazon to put the customer experience above all else should be the foundation of every company’s business decisions.

Integrated data and processes are provided to benefit customers.

We’ve established that Amazon’s focus on the customer experience should be replicated by any organization looking to develop an ongoing relationship with customers. So, how can this experience be made even stronger once it’s refined and established?

Amazon has done just that by creating a one-stop-shop that leverages customer data to provide a shopping experience tailored to each unique customer’s interests. They have also created a diverse shopping experience. An individual can shop for a vintage record player, a vinyl from their favorite band, all while ordering their monthly supply of vitamins in a single order.

Amazon has made the need to stop at multiple stores to buy a list of various items a thing of the past, all in favor of the customer. This not only provides a quick and easy way for customers to make purchases, but it also provides better efficiency and transparency on the back-end operation for Amazon.

Artificial intelligence and machine learning to optimize our customer experience.

If you've spent any amount of time on Amazon or other eCommerce websites, you've likely encountered recommendations that suggest products based on your past behavior, your demographic, where you live, or your income level. These are highly personalized recommendations made to you as a customer, and Amazon is able to do this by utilizing artificial intelligence .

With predictive modeling, the data collected on both your identity and past purchase behavior are used to determine what you may buy in the future. With that information, they have an algorithm that will get a product of interest in front of you.

As for non-eCommerce providers, or if you're in an industry outside of retail, you can also leverage that best practice to determine the best use of your customer data. This will help you anticipate a prospective customer’s needs before they even know what those are, driving sales for your bottom line.

Seek to reduce inefficiencies and costs always.

Amazon is known for its excellent customer experience, intuitive website, and same-day delivery we've grown accustomed to as customers. They have been able to create these pillars in their organization through their supply chain efficiency that they have been able to implement.

As a former client of Third Stage Consulting, we've had a firsthand look into how they automate their warehouses and the robotics they use to continuously fuel their obsession with efficiency, scale, and driving down costs wherever possible. Tactics like opening different distribution centers throughout the world and partnering with suppliers to drop ship to customers are leveraged to focus on efficiency, size, and scale.

When looking at your organization, even if you're not an eCommerce provider, retailer, or direct-to-consumer provider, there are lessons here that can be used to drive out inefficiencies and surplus costs from your company to free up resources better used towards focusing on the customer.

Digital Transformation Case Study.

Third Stage Consulting recently worked with a company that's one of the largest steel manufacturers and distributors in the world. This is likely as far from an eCommerce/technology provider like Amazon as you could possibly be. It's an old-school industry that is entirely structured around business-to-business selling.

Despite being a more mature company in a vastly different industry, they still face the need to leverage technologies to provide a better customer experience. By growing through the process of numerous acquisitions, this client was now in possession of many corporate entities that still functioned as independent companies.

Each company within their organization’s umbrella also came with different technologies, sales reps, and websites. Each company’s purpose was to purchase steel products from different divisions within the enterprise. As you can imagine, they needed to make a change and create a more consolidated experience.

This client decided to embark on a digital transformation to integrate each acquired company’s technology and provide a more consistent and seamless customer experience as part of a commercial excellence initiative.

Step one was to provide more of a consumer-grade type of experience for their customers. They wanted to enable the ease of taking queries to one website, the ease of speaking to one sales rep, and therefore, conveniently getting the full breadth of services and products that this provider offered to their customers from one source.

Step two was to implement the right, full scope ERP system , and business intelligence technology to get better visibility into all their different branches of the organization operating in different parts of the world. Silos had formed across the independently operated parts of the business, hindering efficiency and the ability to share customer data. The newly implemented business intelligence tools gave them visibility into all the different nooks and crannies of the organization.

With that came the ability to drill down in real-time and examine order volumes, customer satisfaction reviews, order defects, and many other crucial business metrics. Having that transparent, integrated data was another essential part of this organization's digital transformation that aided in the ability to optimize the newly refined customer experience by establishing collaboration at an enterprise level.

Begin Your Digital Transformation Journey

If you are seeking more information about best practices related to your digital transformation journey, we encourage you to download our 2021 digital transformation report . If you’d like to discuss your digital transformation in more detail, I am always happy to be an informal sounding board. Don’t hesitate to reach out directly , no matter the status of your project.

Be sure to download the newly released 2023 Digital Transformation Report to garner additional industry insight and project best practices.

Also download our Supply Chain Management Playbook here.

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All change at amazon this will be a different management transition to others we've seen in the tech sector.

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Few management transitions in the tech sector have been as well prepared as Amazon’s . We are talking about somebody who can arguably be described as the most successful CEO of all time, who over the course of 27 years has not only built several business empires, but did so based on a strategic plan he outlined in the mid-1990s.

But unlike the departure of other founding CEOs, Jeff Bezos seems not to have any plans to leave the management of Amazon, and will remain as executive chair of the board of directors , a far-from-symbolic position.

It’s not uncommon for the founder of a company to stand down from operational management after decades at the helm, and we have already seen it in cases such as Microsoft or Google: success on this kind of scale means that there comes a time when the company you created has changed to such a degree that the task of managing it requires a superhuman level of dedication and public presence; furthermore, interest in the attention to detail required to do the job properly decreases significantly over time. In such cases, many founders, who at heart remain entrepreneurs rather than managers, prefer to devote themselves to work that allows them, on the one hand, to enjoy their success, and on the other, to create new projects, generally with much more ambitious goals, not necessarily financial, but by contributing to the greater good.

This was very much the case when Bill Gates left Microsoft: he maintained a good relationship with the company, but completely disassociated himself from all operational decisions and instead left everything in the hands of Steve Ballmer , to the point of not intervening when it became clear that he had chosen the wrong person, who was causing enormous damage to the company . Gates simply left and devoted his attention to his philanthropic foundation , where he has shown an unquestionable vocation to solving some of humanity’s most pressing problems.

Google is similar: first Sergey Brin, and then Larry Page, left the company, leaving all operational aspects of both Google and Alphabet in the hands of Sundar Pichai, and simply devoted themselves to enjoying their money and to personal projects of various kinds, to matters that they are much more passionate about than running a huge company on a day-to-day basis.

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In contrast, everything indicates that the post-Bezos Amazon will be different, and that the founder will continue to exercise leadership from his position as the chairman of the board of directors. Operational decisions will be in the hands of Andy Jassy , who over the more-than two decades he has been working with Bezos has more than proved his brilliance , and who will continue to report on a timely basis and consult on all his decisions at regular board meetings.

In the meantime, Bezos will have more free time, which he will probably devote to improving the quality of his personal life, as well as to a number of other projects. This is a move that has been rumored for some time , which is not surprising, and which effectively leaves Jassy in charge of the third-most valuable company in the world. He will also have to manage the unionization of his workforce, demands to address the climate emergency, or the battles derived from likely antitrust legislation. In any event, it’s a safe bet he will pursue very similar policies to those Bezos would have implemented had he remained in post.

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Explore the Levels of Change Management

9 Successful Change Management Examples For Inspiration

Updated: June 11, 2024

Published: January 3, 2024

Welcome to our guide on change management examples, pivotal for steering through today's dynamic business terrain. Immerse yourself in the transformative power of change management, a tool for resilience, growth, innovation, and employee morale enhancement.

This guide equips you with strategies to promote an innovative, adaptable work environment and boost employee morale for lasting organizational success.

Uncover diverse types of change management with Prosci's established methodology and explore real-world examples that illustrate these principles in action.

What is Change Management?

Change management is a strategy for guiding an organization and its people through change. It goes beyond top-down orders, involving employees at all levels. This people-focused approach encourages everyone to participate actively, helping them adapt and use changes in their everyday work.

Effective change management aligns closely with a company's culture, values, and beliefs.

When change fits well with these cultural aspects, it feels more natural and is easier for employees to adopt. This contributes to smoother transitions and leads to more successful and lasting organizational changes.

Why is Change Management Important?

Change management is pivotal in guiding organizations through transitions, ensuring impactful and long-lasting results.

For example, a $28B electronic components and services company with 18,000 employees realized the importance of enhancing its processes. They knew to adopt more streamlined, efficient approaches, known as Lean initiatives .

However, they encountered challenges because they needed a more structured method for effectively managing the human aspects of these changes.

The company formed a specialized group focused on change to address their challenges and initiate key projects. These projects aligned with their culture of innovation and precision, which helped ensure that the changes were well-received and effectively implemented within the organization.

Matching change management to an organization's unique style and structure contributes to more effective transformations and strengthens the business for future challenges.

What Are the Main Types of Change Management?

Discover Prosci's change management models: from individual application and organizational strategies to enterprise-wide integration and effective portfolio management, all are vital for transformative success.

Individual change management

At Prosci, we understand that change begins with the individual.

The Prosci ADKAR ® Model ( Awareness, Desire, Knowledge, Ability and Reinforcement ) is expertly designed to equip change leaders with tools and strategies to engage your team.

This model is a framework that will guide and support you in confidently navigating and adapting to new changes.

Organizational change management

In organizational change management , we focus on the core elements of your company to fully understand and address each aspect of the change.

Our approach involves creating tailored strategies and detailed plans that benefit you and manage you to manage challenges effectively, which include:

• Clear communication
• Strong leadership support
• Personalized coaching
• Practical training

Our strategies are specifically aimed at meeting the diverse needs within your organization, ensuring a smooth and well-supported transition for everyone involved.

Enterprise change management capability

At the enterprise level, change management becomes an embedded practice, a core competency woven throughout the organization.

When you implement change capabilities:

• Employees know what to ask during change to reach success
• Leaders and managers have the training and skills to guide their teams during change
• Organizations consistently apply change management to initiatives
• Organizations embed change management in roles, structures, processes, projects and leadership competencies

It's a tactical effort to integrate change management into the very DNA of an organization—nurturing a culture that's ready and able to adapt to any change.

Change portfolio management

While distinct from project-level change management, managing a change portfolio is vital for an organization to stay flexible and responsive.

9 Dynamic Change Management Success Stories to Revolutionize Your Business

Prosci case studies reveal how diverse organizations spanning different sectors address and manage change.  These cases illustrate how change management can provide transformative solutions from healthcare to finance:

1. Hospital system

A major healthcare organization implemented an extensive enterprise resource planning (ERP) system and adapted to healthcare reform. This case study highlights overcoming significant challenges through strategic change management:

Industry: Healthcare Revenue: $3.7 billion Employees: 24,000 Facilities: 11 hospitals

Major changes:

• Implemented a new ERP system across all hospitals
• Prepared for healthcare reform

Challenges:

• Managing significant, disruptive changes
• Difficulty in gaining buy-in for change management
• Align with culture: Strategically implemented change management to support staff, reflecting the hospital's core value of caring for people
• Focus on a key initiative: Applied change management in the electronic health record system implementation
• Integrate with existing competencies: Recognized change leadership as crucial at various leadership levels

This example shows that when change management matches a healthcare organization's values, it can lead to successful and smooth transitions.

2. Transportation department

A state government transportation department leveraged change management to effectively manage business process improvements amid funding and population challenges. This highlights the value of comprehensive change management in a public sector setting:

Industry: State Government Transportation Revenue: $1.3 billion Employees: 3,000 Challenges:

• Reduced funding
• Growing population
• Increasing transportation needs

Initiative:

• Major business process improvement

Hurdles encountered:

• Change fatigue
• Need for widespread employee adoption
• Focus on internal growth
• Implemented change management in process improvement

This department's experience teaches us the vital role of change management in successfully navigating government projects with multiple challenges.

3. Pharmaceuticals

A global pharmaceutical company navigated post-merger integration challenges. Using a proactive change management approach, they addressed resistance and streamlined operations in a competitive industry:

Industry: Pharma (Global Biopharmaceutical Company) Revenue: $6 billion Number of employees: 5,000

Recent activities: Experienced significant merger and acquisition activity

• Encountered resistance post-implementation of SAP (Systems, Applications and Products in Data Processing)
• They found themselves operating in a purely reactive mode
• Align with your culture: In this Lean Six Sigma-focused environment, where measurement is paramount, the ADKAR Model's metrics were utilized as the foundational entry point for initiating change management processes.

This company's journey highlights the need for flexible and responsive change management.

4. Home fixtures

A home fixtures manufacturing company’s response to the recession offers valuable insights on effectively managing change. They focused on aligning change management with their disciplined culture, emphasizing operational efficiency:

Industry: Home Fixtures Manufacturing Revenue: $600 million Number of employees: 3,000

Context: Facing the lingering effects of the recession

Necessity: Need to introduce substantial changes for more efficient operations

Challenge: Change management was considered a low priority within the company

• Align with your culture: The company's culture, characterized by discipline in projects and processes, ensured that change management was implemented systematically and disciplined.

This company’s experience during the recession proves that aligning change with company culture is key to overcoming tough times.

5. Web services

A web services software company transformed its culture and workspace.  They integrated change management into their IT strategy to overcome resistance and foster innovation:

Industry : Web Services Software Revenue : $3.3 billion Number of employees : 10,000

Initiatives : Cultural transformation; applying an unassigned seating model

Challenges : Resistance in IT project management

• Focus on a key initiative: Applied change management in workspace transformation
• Go where the energy is:  Establishing a change management practice within its IT department, developing self-service change management tools, and forming thoughtful partnerships
• I ntegrate with existing competencies:  "Leading change" was essential to the organization's newly developed leadership competency model.

This case demonstrates the importance of weaving change management into the fabric of tech companies, especially for cultural shifts.

6. Security systems

A high-tech security company effectively managed a major restructuring.  They created a change network that shifted change management from HR to business processes:

Industry : High-Tech (Security Systems) Revenue : $10 billion Number of employees: 57,000

Major changes : Company separation; division into three segments

Challenge : No unified change management approach

• Formed a network of leaders from transformation projects
• Go where the energy is:  Shifted change management from HR to business processes
• Integrate with existing competencies:  Included principles of change management in the training curriculum for the project management boot camp.
• Treat growing your capability like a change:  Executive roadshow launch to gain support for enterprise-wide change management

This company’s innovative approach to restructuring shows h ow reimagining change management can lead to successful outcomes.

7. Clothing store

A major clothing retailer’s journey to unify its brand model.  They overcame siloed change management through collaborative efforts and a community-driven approach:

Industry : Retail (Clothing Store) Revenue : $16 billion Number of employees : 141,000

Major change initiative : Strategic unification of the brand operating model

Historical challenge : Traditional management of change in siloes

• Build a change network :  This retailer established a community of practice for change management, involving representatives from autonomous units to foster consensus on change initiatives.

The story of this retailer illustrates how collaborative efforts in change management can unify and strengthen a brand in the retail world.

A major Canadian bank initiative to standardize change management across its organization.  They established a Center of Excellence and tailored communities of practice for effective change:

Industry : Financial Services (Canadian Bank) Revenue : $38 billion Number of employees : 78,000

Current state : Absence of enterprise-wide change management standards

Challenge :

• Employees, contractors, and consultants using individual methods for change management
• Reliance on personal knowledge and experience to deploy change management strategies
• Build a change network:  The bank established a Center of Excellence and created federated communities of practice within each business unit, aiming to localize and tailor change management efforts.

This bank’s journey in standardizing change management offers valuable insights for large organizations looking to streamline their processes.

9. Municipality

You can learn from a Canadian municipality’s significant shift to enhance client satisfaction. They integrated change management across all levels to achieve profound organizational change and improved public service:

Industry : Municipal Government (Canadian Municipality) Revenue : $1.9 billion Number of employees : 3,000

New mandate:

• Implementing a new deliberate vision focusing on each individual’s role in driving client satisfaction

Nature of shift : 

• A fundamental change within the public institution

Scope of impact :

•  It affected all levels, from leadership to front-line staff

Solution : 

• Treat growing your capability like a change: Change leaders promoted awareness and cultivated a desire to adopt change management as a standard enterprise-wide practice.

The municipality's strategy shows us how effective change management can significantly improve public services and organizational efficiency.

6 Tactics for Growing Enterprise Change Management Capability

Prosci's exploration with 10 industry leaders uncovered six primary tactics for enterprise change growth , demonstrating a "universal theme, unique application" approach.

This framework goes beyond standard procedures, focusing on developing a deep understanding and skill in managing change. It offers transformative tactics, guiding organizations towards excelling in adapting to change.  Here, we uncover these transformative tactics, guiding organizations toward mastery of change.

1. Align with Your culture

Organizational culture profoundly influences how change management should be deployed.

Recognizing whether your organization leans towards traditional practices or innovative approaches is vital. This understanding isn't just about alignment; it's an opportunity to enhance and sometimes shift your cultural environment.

When effectively combined with an organization's unique culture, change management can greatly enhance key initiatives. This leads to widespread benefits beyond individual projects and promotes overall growth and development within the organization.

Embrace this as a fundamental tool to strengthen and transform your company's cultural fabric.

2. Focus on key initiatives

In the early phase of developing change management capabilities, selecting noticeable projects with executive backing is important.

This helps demonstrate the real-world impact of change management, making it easier for employees and leadership to understand its benefits. This strategy helps build support and maintain the momentum of change management initiatives within your organization.

Focus on capturing and sharing these successes to encourage buy-in further and underscore the importance of change management in achieving organizational goals.

3. Build a change network

Building change capability isn't just about a few advocates but creating a network of change champions across your organization.

This network, essential in spreading the message and benefits of change management, varies in composition but is universally crucial. It could include departmental practitioners, business unit leaders, or a mix of roles working together to enhance awareness, credibility, and a shared purpose.

Our Best Practices in Change Management study shows that 45% of organizations leverage such networks. These groups boost the effectiveness of change management and keep it moving forward.

4. Go where the energy is

To build change capabilities throughout an organization effectively, the focus should be on matching the organization's current readiness rather than just pushing new methods.

Identify and focus on parts of your organization that are ready for change. Align your change initiatives with these sectors. Involve senior leaders and those enthusiastic about change to naturally generate demand for these transformations.

Showcasing successful initiatives encourages a collaborative culture of change, making it an organic part of your organization's growth.

5. Integrate with existing competencies

Change management is a vital skill across various organizational roles.

Integrating it into competency models and job profiles is increasingly common, yet often lacks the necessary training and tools.

When change management skills expand beyond the experts, they become an integral part of the organization's culture—nurturing a solid foundation of effective change leadership.

This approach embeds change management deeper within the company and cultivates leaders who can support and sustain this essential practice.

6. Treat growing your capability like a change

Growing change capability is a transformative journey for your business and your employees. It demands a structured, strategic approach beyond telling your network that change is coming.

Applying the ADKAR Model universally and focusing on your organization's unique needs is pivotal. It's about building awareness, sparking a desire for change across the enterprise, and equipping employees with the knowledge and skills for effective, lasting change. 

Treating capability-building like a change ensures that change management becomes a core part of your organization's fabric, benefitting every team member.

These six tactics are powerful tools for enhancing your organization's ability to adapt and remain resilient in a rapidly changing business environment.

Comprehensive Insights From Change Management Examples

These diverse change management examples provide field-tested savvy and offer a window into how varied organizations successfully manage change.

Case studies , from healthcare reform to innovative corporate restructuring, exemplify how aligning with organizational culture, building strong change networks, and focusing on tactical initiatives can significantly impact change management outcomes.

This guide, enriched with real-world applications, enhances understanding and execution of effective change management, setting a benchmark for future transformations.

To learn more about partnering with Prosci for your next change initiative, discover Prosci's Advisory services and enterprise training options and consider practitioner certification .

Founded in 1994, Prosci is a global leader in change management. We enable organizations around the world to achieve change outcomes and grow change capability through change management solutions based on holistic, research-based, easy-to-use tools, methodologies and services.

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Short Case Study on Change Management

A short case study on change management can be very helpful in learning how to manage change effectively. In today’s business world, change is constantly happening and it can be very difficult to keep up.

Having a solid understanding of change management is essential for any manager or business owner.

A good case study will show you how one company successfully managed a major change and what lessons can be learned from their experience.

By studying short case study on change management, you will gain valuable insights into the importance of planning, communication, and employee involvement when managing change.

You will also learn about the different stages of change and how to overcome resistance to change.

These are all important topics that any manager or business owner should be familiar with. Learning about them through a short case study is an excellent way to gain a better understanding of these concepts.

Here are 05 short case studies on change management that offer you valuable insights on managing change.

1. Adobe- a transformation of HR functions to support strategic change

Many a times external factors lead to changes in organisational structures and culture. This truly happened at Adobe which has 11,000 employees worldwide with 4.5 billion $ yearly revenue.

Acrobat, Flash Player, and Photoshop are among the well-known products of Abode.

Due to new emerging technologies and challenges posed by small competitors Adobe had to stop selling its licensed goods in shrink-wrapped containers in 2011 and switched to offering digital services through the cloud. They gave their customers option of downloading the necessary software for free or subscribing to it every month rather than receiving a CD in a box.

The human resource (HR) function also took on a new role, which meant that employees had to adjust to new working practices. A standard administrative HR function was housed at Adobe’s offices. However, it was less suitable for the cloud-based strategy and performed well when Adobe was selling software items. 

HR changed its role and became more human centric and reduced its office based functions.

The HR personnel did “walk-ins,” to see what assistance they might offer, rather than waiting for calls. With a focus on innovation, change, and personal growth, Adobe employed a sizable percentage of millennials.

Instead of having an annual reviews, staff members can now use the new “check-in” method to assess and define their own growth goals whenever they find it necessary, with quick and continuous feedback. 

Managers might receive constructive criticism from HR through the workshops they conduct. The least number of employees have left since this changed approach of HR.

Why did Adobe’s HR department make this change? Since the company’s goals and culture have changed, HR discovered new ways to operate to support these changes.

2. Intuit – applying 7s framework of change management 

Steve Bennett, a vice president of GE Capital, was appointed CEO of Intuit in 2000. Intuit is a provider of financial software solutions with three products: Quicken, TurboTax, and QuickBooks, which have respective market shares of 73 percent, 81 percent, and 84 percent. 

Despite this market domination, many observers believed Intuit was not making as much money as it could.

Additionally, the business was known for making decisions slowly, which let rivals take advantage of numerous market opportunities. Bennett desired to change everything.

In his first few weeks, he spoke with each of the top 200 executives, visited the majority of Intuit’s offices, and addressed the majority of its 5,000 employees.

He concluded that although employees were enthusiastic about the company’s products, internal processes weren’t given any thought (based on Higgins, 2005).

He followed the famous Mckinsey 7S Model for Change Management to transform the organization. Let’s see what are those changes that he made:

By making acquisitions, he increased the products range for Intuit.

He established a flatter organizational structure and decentralized decision-making, which gave business units more authority and accountability throughout the whole product creation and distribution process.

To accomplish strategic goals, the rewards system was made more aligned to strategic goals.

He emphasized the necessity of a performance-oriented focus and offered a vision for change and also made every effort to sell that vision.

He acknowledged the commitment of staff to Intuit’s products and further strengthened process by emphasizing on quality and efficiency of his team.

Resources were allotted for learning and development, and certain selected managers were recruited from GE in particular skill categories, all to enhance staff capabilities concerning productivity and efficiency.

Superordinate goals:

Bennett’s strategy was “vision-driven” and he communicated that vision to his team regularly to meet the goals.

Bennett’s modifications led to a 40–50% rise in operating profits in 2002 and 2003.

8,000 people worked for Intuit in the United States, Canada, the United Kingdom, India, and other nations in 2014, and the company generated global revenues of nearly $5 billion.

3. Barclays Bank – a change in ways of doing business

The financial services industry suffered heavily during mortgage crisis in 2008. In addition to significant losses, the sector also had to deal with strict and aggressive regulations of their investing activities.

To expand its business, more employees were hired by Barclays Capital under the leadership of its former chief executive, Bob Diamond, who wanted to make it the largest investment bank in the world. 

But Barclays Capital staff was found manipulating the London Inter-Bank Offered Rate (LIBOR) and Barclays was fined £290 million and as a result of this the bank’s chairman, CEO, and COO had to resign.

In an internal review it was found that the mindset of “win at all costs” needed to be changed so a new strategy was necessary due to the reputational damage done by the LIBOR affair and new regulatory restrictions. 

In 2012, Antony Jenkins became new CEO. He made the following changes in 2014, which led to increase of 8% in share price.

Aspirations

The word “Capital” was removed from the firm name, which became just Barclays. To concentrate on the U.S. and UK markets, on Africa, and on a small number of Asian clients, the “world leader” goal was dropped.

Business model

Physical commodities and obscure “derivative” products would no longer be traded by Barclays. It was decided that rather than using its customers’ money, the business would invest its own.

Only thirty percent of the bank’s profits came from investment banking. Instead of concentrating on lending at high risk, the focus was on a smaller range of customers.

In place of an aggressive, short-term growth strategy that rewarded commercial drive and success and fostered a culture of fear of not meeting targets, “customer first,” clarity, and openness took precedence. Investment bankers’ remuneration was also reduced.

Beginning in 2014, branches were shut, and 19,000 jobs were lost over three years, including 7,000 investment banking employees, personnel at high-street firms, and many in New York and London headquarters. £1.7 billion in costs were reduced in 2014.

There was an increase in customers’ online or mobile banking, and increased automation of transactions to lower expenses.  To assist customers in using new computer systems, 30 fully automated branches were established by 2014, replacing the 6,500 cashiers that were lost to this change with “digital eagles” who used iPads.

These changes were made to build an organization that is stronger, more integrated, leaner, and more streamlined, leading to a higher return on equity and better returns for shareholders. This was also done to rebuild the bank’s credibility and win back the trust of its clients.

4. Kodak – a failure to embrace disruptive change

The first digital camera and the first-megapixel camera were both created by Kodak in 1975 and 1986 respectively.

Why then did Kodak declare bankruptcy in 2012? 

When this new technology first came out in 1975, it was expensive and had poor quality of images. Kodak anticipated that it would be at least additional ten years until digital technology started to pose a threat to their long-standing business of camera, film, chemical, and photo-printing paper industries.

Although that prediction came true, Kodak chose to increase the film’s quality through ongoing advances rather than embracing change and working on digital technology.

Kodak continued with old business model and captured market by 90% of the film and 85% of the cameras sold in America in 1976. With $16 billion in annual sales at its peak, Kodak’s profits in 1999 was around $2.5 billion. The brand’s confidence was boosted by this success but there was complete complacency in terms of embracing new technology.

Kodak started experiencing losses in 2011 as revenues dropped to $6.2 billion. 

Fuji, a competitor of Kodak, identified the same threat and decided to transition to digital while making the most money possible from film and creating new commercial ventures, such as cosmetics based on chemicals used in film processing.

Even though both businesses had the same information, they made different judgments, and Kodak was reluctant to respond. And when it started to switch towards digital technology, mobile phones with in-built digital camera had arrived to disrupt digital cameras.

Although Kodak developed the technology, they were unaware of how revolutionary digitalization would prove to be, rendering their long-standing industry obsolete.

You can read here in detail Kodak change management failure case study.

5. Heinz   – a 3G way to make changes

Warren Buffett’s Berkshire Hathaway and the Brazilian private equity business 3G Capital paid $29 billion in 2013 to acquire Heinz, the renowned food manufacturer with $11.6 billion in yearly sales.

The modifications were made right away by the new owners. Eleven of the top twelve executives were replaced, 600 employees were let go, corporate planes were sold, personal offices were eliminated, and executives were required to stay at Holiday Inn hotel rather than the Ritz-Carlton when traveling and substantially longer work hours were anticipated. 

Each employee was given a monthly copy restriction of 200 by micromanagement, and printer usage was recorded. Only 100 business cards were permitted each year for executives.

Numerous Heinz workers spoke of “an insular management style” where only a small inner circle knows what is truly going on.

On the other side, 3G had a youthful team of executives, largely from Brazil, who moved from company to company as instructed across nations and industries. They were loyal to 3G, not Heinz, and were motivated to perform well to earn bonuses or stock options. 

“The 3G way,” a theory that 3G has applied to bring about change in prior acquisitions like Burger King, was the driving reason behind these modifications. Everything was measured, efficiency was paramount, and “nonstrategic costs” were drastically reduced. 

From this vantage point, “lean and mean” prevails, and human capital was not regarded as a crucial element of business success. It was believed that rather than being driven by a feeling of purpose or mission, employees were motivated by the financial gains associated with holding company stock.

Because it had been well-received by the 3G partners, those who might be impacted by a deal frequently saw a “how to” guide published by consultant Bob Fifer as a “must read.”

However, many food industry experts felt that while some of 3G’s prior acquisitions would have been ideal candidates for a program of cost-cutting, Heinz was not the most appropriate choice to “hack and slash.” The company had already undergone several years of improved efficiency and it was already a well-established player in the market.

In summarizing the situation, business journalists Jennifer Reingold and Daniel Roberts predicted that “the experiment now underway will determine whether Heinz will become a newly invigorated embodiment of efficiency—or whether 3G will take the cult of cost-cutting so far that it chokes off Heinz’s ability to innovate and make the products that have made it a market leader for almost a century and a half.” 

Final Words

A short case study on change management can be a helpful tool in learning how to effectively manage change. These case studies will show you how one company successfully managed a major change and what lessons can be learned from their experience. By studying these case studies, you will gain valuable insights into the importance of planning, communication, and employee involvement when managing change. These are all vital elements that must be considered when implementing any type of change within an organization.

About The Author

Tahir Abbas

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25 Case Studies on Change Management Kindle Edition

• Real-World Challenges, Practical Strategies: Each case study presents real-world business challenges and the strategic maneuvers used to navigate them successfully.
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Jeff bezos and amazon.com change management analysis & solution, hbr change management solutions, sales & marketing case study | mark parry, case study description.

Students evaluate the consistency and liability of Amazon.com founder Jeff Bezos's marketing strategy. Bezos founded Amazon.com as an Internet retailer of books, and by 1999, the site also sold CDs, videos, used books, and gifts and operated an auction service.

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What is Change Management Definition & Process? Why transformation efforts fail? What are the Change Management Issues in Jeff Bezos and Amazon.com case study?

According to John P. Kotter – Change Management efforts are the major initiatives an organization undertakes to either boost productivity, increase product quality, improve the organizational culture, or reverse the present downward spiral that the company is going through. Sooner or later every organization requires change management efforts because without reinventing itself organization tends to lose out in the competitive market environment. The competitors catch up with it in products and service delivery, disruptors take away the lucrative and niche market positioning, or management ends up sitting on its own laurels thus missing out on the new trends, opportunities and developments in the industry.

What are the John P. Kotter - 8 Steps of Change Management?

Eight Steps of Kotter's Change Management Execution are -

• 1. Establish a Sense of Urgency
• 2. Form a Powerful Guiding Coalition
• 3. Create a Vision
• 4. Communicate the Vision
• 5. Empower Others to Act on the Vision
• 6. Plan for and Create Short Term Wins
• 7. Consolidate Improvements and Produce More Change
• 8. Institutionalize New Approaches

Are Change Management efforts easy to implement? What are the challenges in implementing change management processes?

According to authorlist Change management efforts are absolutely essential for the surviving and thriving of the organization but they are also extremely difficult to implement. Some of the biggest obstacles in implementing change efforts are –

• Change management is often a lengthy, time consuming, and resource consuming process. Managements try to avoid them because they reflect negatively on the short term financial balance sheet of the organization.
• Change management efforts are made when the organization is in dire need and have fewer resources. This creates silos protection mentality within the organization.
• Change efforts create an environment of uncertainty in the organization that impacts not only the productivity in the organization but also the level of trust in the organization.
• Change efforts are often targeted at making fundamental aspects in the business – operations and culture. Change management disrupts are status quo thus face opposition from both within and outside the organization.
• Change efforts are often made by new leaders because they are chosen by board to do so. These leaders often have less trust among the workforce compare to the people with whom they were already working with over the years.

Jeff Bezos and Amazon.com SWOT Analysis, SWOT Matrix, Weighted SWOT Case Study Solution & Analysis

How you can apply Change Management Principles to Jeff Bezos and Amazon.com case study?

Leaders can implement Change Management efforts in the organization by following the “Eight Steps Method of Change Management” by John P. Kotter.

Step 1 - Establish a sense of urgency

What are areas that require urgent change management efforts in the “ Jeff Bezos and Amazon.com “ case study. Some of the areas that require urgent changes are – organizing sales force to meet competitive realities, building new organizational structure to enter new markets or explore new opportunities. The leader needs to convince the managers that the status quo is far more dangerous than the change efforts.

Step 2 - Form a powerful guiding coalition

As mentioned earlier in the paper, most change efforts are undertaken by new management which has far less trust in the bank compare to the people with whom the organization staff has worked for long period of time. New leaders need to tap in the talent of the existing managers and integrate them in the change management efforts . This will for a powerful guiding coalition that not only understands the urgency of the situation but also has the trust of the employees in the organization. If the team able to explain at the grass roots level what went wrong, why organization need change, and what will be the outcomes of the change efforts then there will be a far more positive sentiment about change efforts among the rank and file.

Step 3 - Create a vision

The most critical role of the leader who is leading the change efforts is – creating and communicating a vision that can have a broader buy-in among employees throughout the organization. The vision should not only talk about broader objectives but also about how every little change can add up to the improvement in the overall organization.

Step 4 - Communicating the vision

Leaders need to use every vehicle to communicate the desired outcomes of the change efforts and how each employee impacted by it can contribute to achieve the desired change. Secondly the communication efforts need to answer a simple question for employees – “What it is in for the them”. If the vision doesn’t provide answer to this question then the change efforts are bound to fail because it won’t have buy-in from the required stakeholders of the organization.

Step 5 -Empower other to act on the vision

Once the vision is set and communicated, change management leadership should empower people at every level to take decisions regarding the change efforts. The empowerment should follow two key principles – it shouldn’t be too structured that it takes away improvisation capabilities of the managers who are working on the fronts. Secondly it shouldn’t be too loosely defined that people at the execution level can take it away from the desired vision and objectives.

Jeff Bezos and Amazon.com PESTEL / PEST / STEP & Porter Five Forces Analysis

Step 6 - Plan for and create short term wins

Initially the change efforts will bring more disruption then positive change because it is transforming the status quo. For example new training to increase productivity initially will lead to decrease in level of current productivity because workers are learning new skills and way of doing things. It can demotivate the employees regarding change efforts. To overcome such scenarios the change management leadership should focus on short term wins within the long term transformation. They should carefully craft short term goals, reward employees for achieving short term wins, and provide a comprehensive understanding of how these short term wins fit into the overall vision and objectives of the change management efforts.

Step 7 - Consolidate improvements and produce more change

Short term wins lead to renewed enthusiasm among the employees to implement change efforts. Management should go ahead to put a framework where the improvements made so far are consolidated and more change efforts can be built on the top of the present change efforts.

Step 8 - Institutionalize new approaches

Once the improvements are consolidated, leadership needs to take steps to institutionalize the processes and changes that are made. It needs to stress how the change efforts have delivered success in the desired manner. It should highlight the connection between corporate success and new behaviour. Finally organization management needs to create organizational structure, leadership, and performance plans consistent with the new approach.

Is change management a process or event?

What many leaders and managers at the Amazon.com Bezos fails to recognize is that – Change Management is a deliberate and detail oriented process rather than an event where the management declares that the changes it needs to make in the organization to thrive. Change management not only impact the operational processes of the organization but also the cultural and integral values of the organization.

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Change Enablement in the Cloud

Publication date: June 27, 2024 ( Document revisions )

Like every business function, change management should provide the capability for your organization to succeed. Just as every business has a finance function to govern spending, change management is essential for optimizing business risk. You can benefit from change management if you have migrated to the cloud, have a hybrid environment, or architected your workload natively in the cloud. An effective change management process is agile and reduces time to market while optimizing risk to your business. With an efficient process, you can improve the quality and speed of delivery of all changes for the business. An effective record of change should also act as one of your first troubleshooting references if an incident occurs.

Typically, businesses transitioning to the cloud expect to iterate on products and deliver enhanced business value through an increased volume of changes to their IT infrastructure and applications. Current industry trends indicate that a high performing change management process is comprised of increased frequency of deployment, improved lead time for a change, and lower failure rates. However, to achieve this, it also requires version control and continuous delivery, as well as automated testing and deployment capabilities. Research also suggests that peer-reviewed changes within a team can achieve the same level of risk optimization as using a change advisory board. This is important because it allows organizations to decentralize change approval authority. (ITIL® 4: High-Velocity IT, PeopleCert+)

By following the guidance in this paper, updating your processes aligns with both the AWS Cloud Adoption Framework (CAF) and the AWS Well-Architected Operational Excellence Framework, ensuring adherence to best practices in governance when deploying changes to your AWS environment.

Introduction

In a cloud computing environment, new IT resources are readily available. This reduces the time it takes to make resources available to your developers, which leads to a dramatic increase in agility for the organization. As a result, the cost and time it takes to experiment and develop is significantly lower. For more detail, see Six advantages of cloud computing.

The more successful an organization is at increasing its agility in the cloud, the more difficult it can become to manage change. Traditional processes can impede the volume and speed the cloud enables. Business stakeholders may have become accustomed to longer release cycles using waterfall methodologies, and challenges can arise from the transition to working in a way that increases the frequency of software releases. These challenges may result in increased stakeholder engagement, the introduction of unnecessary gates that hinder development progress, or unmanaged changes. Modernizing your change management process will be necessary to overcome these challenges.

Make frequent, small, and reversible changes. Design workloads to allow smaller components to be updated more frequently. Plan your changes in smaller increments that can be reversed if they fail (without an impact to business outcomes). Use this approach to achieve the desired agility. AWS best practices and strategies for designing and operating a cloud workload align with this approach. A change process must continue to govern the deployment of a new services, software, patches, and configuration changes.

In the cloud, you can enable automated governance with a complete audit trail of the deployment steps. Due to automated deployment capabilities, you can preserve agility by reducing the penalty if a rollback of a failed change is required. To achieve cloud agility, organizations must rollback changes that have adverse business consequences, and automate this process where possible. The automation should enforce change policies to occur within the software development pipeline as regularly scheduled and unscheduled changes continually flow. Different policies and procedures should exist for emergency changes or changes that require manual processes during deployment.

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