Amazon's Meghan Borsic on Why Some Companies Fail at Innovation
Synonymous with convenience, Amazon innovated its way to becoming the world’s largest e-commerce company not by inventing online shopping, but by designing value-added services that make buying products online superlatively easier.
Now, companies from CVS to Uber are vying to replicate the success of Amazon Prime with membership offerings of their own, but they have the reek of loyalty programs rather than a value-added service like Amazon’s revolutionary two-day shipping.
“Innovation is giving the customer what they need before they know they need it,” said Meghan Borsic, head of UX research & design for consumer electronics at Amazon. Slated to speak at Experience Design Week in Denver, CO, this March, Borsic leads a team of UX designers who run design thinking workshops, hackathons and design sprints to conceptualize new product ideas.
Borsic notes that industry outsiders tend to confuse innovation with technology, but it’s much simpler than that. “It’s about being creative and original in your work and in your thinking.”
Aligning with the customer is so deeply embedded in Amazon’s culture that each time an Amazon staffer pitches a new idea, they start by writing a 6-page memo outlining how they think it will be received by the end user.
The first item is a mock press release announcing the product, describing how it works and how hypothetical customers will react to it. Next is an FAQ section to anticipate potential concerns from customers as well as internal stakeholders like the CFO, the operations and leadership teams.
His disdain for bullet points led Amazon CEO Jeff Bezos to famously ban PowerPoint at meetings, insisting that memos be written instead to encourage deeper consideration of the whys and hows of the topic. The first 30 minutes of the meeting are spent silently reading the memo, and then a firestorm of questions is directed at its scribe, whose palms are now presumably sweaty and heart palpitating.
After 16 years in the industry, Borsic, who bills herself an “innovation enabler and idea accelerator” knows that innovation is a culture. Some companies believe that innovation detracts from day-to-day responsibilities, which makes employees feel disempowered to propose new ideas. What's more, experimentation requires a tolerance for failure, which not everyone can stomach.
Other companies appoint specific teams to oversee the business of innovation, even siloing them in innovation labs sited separately from corporate headquarters - ADP, for instance, runs two innovation labs, one in Pasadena, California, and Chelsea, New York, while its head office is in New Jersey.
“Centralizing” innovation often leads to what Lean Startup founder Steve Blank dubs “innovation theater,” which occurs when UX designers and researchers use agile methods without really understanding how they work. Or they’ll blueprint prototypes that are gamechangers on paper and problem children in the market, because they failed to devise a well thought-out business model for the product.
In other instances, a perfectly viable prototype is shot down by higher-ups because the designers failed at stakeholder management - namely, selling the idea to the parent company - because they misunderstand that a huge part of successful innovation is railing against inertia.
“It’s a myth that one functional group is more suited to innovation than others; that’s a severe hindrance to the pace of innovation,” Borsic said. “Each department will provide a unique perspective on the problem of customers, which can be critical for driving successful innovation.”
User-led personalization is one of the main revenue drivers at Amazon. Its recommendation engine powered by the Amazon Personalize machine learning service takes into account customer behavior like page views, signups, purchases and more, and offers personalized product and content recommendations, tailored search results and targeted marketing promotions.
A similar technology features in Netflix’s secret sauce; the ability to offer content customers would not have otherwise discovered themselves based on inferred preferences.
“It’s the idea that firms should let users drive innovation as opposed to attempting to push innovation out from a lab, for example,” Borsic explained.
Borsic points out that the snowboard was invented in 1965 as a result of user innovation, when someone decided to tie two skis together. Ski equipment manufacturers didn’t start producing snowboards until the 90’s, when they started losing market share to mom-and-pops that sold snowboards.
Intriguingly, this timeline squares with the “30 Years Rule” that it takes an innovative idea about three decades to go from initial discovery to significant market impact.
“Users will naturally find ways to do their day-to-day tasks in a way that works best for them,” says Borsic. “This is really where user researchers in the UX industry need to pay close attention to spot those trends and help to give customers what they want.”