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September 28, 2017

Amazon Operates Like Genghis Khan’s Armies

Business Advisory

JoergSchreiner

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Amazon today dominates markets like Genghis Khan’s armies dominated battlefields some 800 years ago. Back then, Mongolian troops could shock and awe their enemies like nothing else. Today, similar feelings creep up spines of business owners when they hear how Amazon buys Whole Foods, or how General Electric bows to the lure of Amazon Web Services.

The eerie feelings have the same origin: Like the Khan’s armies, Amazon displays speed, flexibility and coordination of their forces on a much higher level of performance than anyone else can dream of achieving. Studying Amazon, I realized that the similarities with the Khan’s troops go even deeper than that. At the heart of both organizations lie operations that excel at dealing with opportunity.

Quickly act on opportunities

The Khan’s army was organized and trained for interoperability and independency at all levels, starting from units of 10 men all the way up to 10.000 men. Acting mostly independently, but always in close alignment with adjacent units, commanders could deploy multiple units of varying size and specialization to act on the tactical as well as the strategic level with force, speed and purpose. Similarly, Amazon can very quickly pull together resources and start new business operations. Its broad presence in many markets, and its wide array of business and technological capabilities facilitates acting on many different opportunities. More importantly, and similar to the Khan’s army, Amazon pushes decision-making down its chain of command, expecting local leaders to take entrepreneurial risks with full profit-loss accountability.

Quickly adapt and reconfigure operations

The Khan’s riding archers were masters in mobile warfare, fluidly adjusting to new circumstances, emerging threats and opportunities. Being only lightly armored, they would never attack a target head-on, but surprise enemies with speed and maneuverability far above the enemies capability to effectively react. Similarly, Amazon’s speed and diversity of operations allows it to repeatedly surprise markets with the quick launch of businesses in new markets. Relying on software to connect their independently operating professional services, Amazon can easily combine the necessary capabilities for any business operation. Additionally, it can quickly scale operations up and also down, mitigating risks that are usually associated with underperforming operations.

Quickly become aware of new opportunities

The Khan had a courier communication and espionage network delivering military and trade intelligence that few foreign kings could even imagine at the time. Army commanders were given broad freedom how to carry out their missions, trusting their local judgment of situations and the intelligence provided from their own scouting operations. Similarly, Amazon uses its deep knowledge of consumer behavior, its vast array of connected operations across many markets, and the judgment of their customer-facing business units to spot new opportunities. Paying no heed to hierarchies and existing structures, Amazon expects every employee to point out inefficiencies, issues reported by costumers and ideas for new business. Using its flexibility and presence across markets, Amazon can quickly start probing market reactions before committing significant resources to a promising business idea.

In case of the Khan’s armies, their overall agility made them dominate battlefields of the 13th century. Will history repeat itself, making Amazon’s agile business operations dominate markets in this century? Analyzing Amazon’s strengths and their disruptive ventures into established markets is the best advice I can currently give to business leaders. They need to learn to think and act like Amazon to survive and profit in highly dynamic markets brought along by digitalization.

 

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Blog image: pixabay.com

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