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The Marriage of Innovation and Leadership: Amazon Presents Innovation Services, Business and Culture

On December 21, 2017, Deloitte Tohmatsu Consulting hosted Amazon Web Service (AWS) to discuss business innovation and leadership. Reflecting on Amazon’s innovation culture and its remarkable achievements, this article explains why innovation culture, mechanism and entrepreneurship are called upon for Japan to maintain the competitive edge of its skilled labor force, innovative dynamism and therefore sustainable business growth in face of the Fourth Industrial Revolution.

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Amazon Web Services (AWS) Business Development Manager Takeyoshi Nakamura and his counterpart from the Tokyo Office Kenta Ichiyanagi presented at Deloitte Tohmatsu Consulting in Tokyo on December 21, 2017. At this event, Nakamura introduced AWS solutions and IoT engagement model, followed by Ichiyanagi’s presentation on AWS Machine Learning and AI applications. Deloitte Innovation Leader Takeshi Fujii joined the networking reception following the presentations. This event was very well received and welcomed participants from a myriad of industries including aerospace and aviation, automobile, chemicals, consumer, finance, healthcare, insurance, technology, media and telecom sectors as well as academic and research institutions.

Deloitte Innovation Strategy has been collaborating with the world’s most innovative business organizations to foster and facilitate business innovation with its signature innovation strategy consulting service, which encourages large corporations in Japan to adapt to the latest innovation trends and generate new business opportunities.

In 2017, Amazon was selected as the world’s most innovative company by Fast Company, an American business magazine that publishes on trends in technology, business and design. Amazon’s pioneering initiative in expanding its business to retail grocery through its June 2017 acquisition of Whole Foods concludes its continuing innovative dynamism and remarkable business growth.

Amazon’s AWS services have been widely applied and AI solutions successfully implemented in multiple enterprises in Japan. AWS helped its financial services customers in Japan transfer critically heavy workloads to the platform and realize efficiencies in high performance computing, data analytics, digital transformation, security and compliance, and disaster recovery. It also helped a local broadcasting station FM Fukuyama fully automate its announcement system by developing an AI-based announcer, which made it possible to convey vital information to the largest audience possible in a timely manner in times of disaster.[1] Recently Docomo created a voice recognition architecture on AWS, which helped the company scale for better performance during traffic spikes and accommodate its large and growing customer base.[2]

AWS customers use AWS services to realize innovation and tap new market opportunities. However, Japanese corporations would not only need innovation solutions, but more importantly, innovation culture, mechanism and entrepreneurship to keep themselves relevant, valuable and at the forefront of the competitive edge.

It is universally acknowledged that the traditional top-down and bureaucratic decision-making process has discouraged innovation initiatives and rejected innovative attempts in the country. Any Japan-born and -raised native may find oneself familiar with the hierarchical corporate structure and consensus-driven business culture, which many observers in the Western countries believe contradictory to the innovation culture—think differently, act quickly and question everything.

However, Japan is one of the most innovative countries in the world. It invented the blue LED light, Walkman, high-speed railway, video tape recorder, pocket calculator, compact disc, flash memory, motion-sensing video game controller, Android robot and the Toyota production system, the original source of lean management. Japan has never been short of innovation, but it has lacked an innovation-friendly corporate culture, a supportive innovation mechanism and entrepreneurship.

An Innovation-friendly Corporate Culture

Turning ideas to action takes significant time due to stratified decision-making institution within a Japanese corporate, which unfortunately discourages and delays innovation initiatives. Would the European and American efficiency-oriented innovation culture be a panacea? Possibly. A merit-based and performance-driven organization encourages a stronger commitment to delivering results. Yet an organization hyper-focused on efficiency is more likely to become short-term thinking and therefore hardly sustaining its competitiveness in the long run. AWS CEO Andy Jassy offers a different perspective on innovation culture—“We like to say we are actively working on our next big failures.” While leaders should be “right” most of the time and have “strong judgment and good instincts, they should seek diverse opinions and work to disconfirm their beliefs.”

A Supportive Innovation Mechanism

The Amazon innovation mechanism starts with “customer.”[3] It is supported by capturing customer perspectives, answering questions from the customer, identifying metrics to measure success, and testing assumptions and iterating. Amazon also uses the power of storytelling and narratives as part of its decision-making process, through which Amazonians could document their ideas and achieve greater clarity. The entire mechanism is created based upon teamwork, for which the communal and collegial Japanese corporate culture offers a favorable context.

Entrepreneurship

“Innovation culture and mechanism” summarize the two bases in Amazon’s innovation formula while “entrepreneurship” becomes the exponent of the base. Amazon CEO Jeff Bezos refers “entrepreneurship” to “willingness to experiment and willingness to fail.” Japanese corporations are often proactive in researching, analyzing, learning and understanding the forefront markets; however, they tend to remain conservative and critical to experiment and implementation due to risk-aversion considerations. This makes Japan an observing follower rather than a leading creator, and explains why Japan is short of “strong leaders to make effective decisions” and “Japanese companies often look for Western leaders in a state of crisis.”[4][5]

The Amazon story inspires Japan to build a meritocracy- and agility-based talent reserve, risk-taking and failure-embracing mindset, and adventurous and experimental psyche, marrying its traditional qualities of prudence and collectivism to prepare itself well for the Fourth Industrial Revolution.

 

[1] Amazon’s FM Wakayama Case Study. Retrieved from https://aws.amazon.com/solutions/case-studies/fm-wakayama/
[2]Amazon’s NTT Docomo Case Study. Retrieved from https://aws.amazon.com/solutions/case-studies/ntt-docomo/
[3]Amazon regards “customer obsession” one of the fourteen “Our Leadership Principles.”
[4]Parissa Haghirian. (August 30, 2017). Interview by Bobbie van der List. “Lifelong High Performance, the Japanese-American Way.” Strategy + Business. Winter 2017, Issue 89.
[5]Buster Brown. (August 30, 2017). Interview by Bobbie van der List. “Lifelong High Performance, the Japanese-American Way.” Strategy + Business. Winter 2017, Issue 89.

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