It’s no secret that millennials are a growing generation in the workforce. Defined as being born between 1981 and 1996, they recently became the largest labor force in the United States.
Millennials bring a different attitude to the workplace than prior generations, and with that, new challenges for businesses and their leadership. Management must learn to adopt new core competencies and ways of guiding these new employees. Focusing on competency management can be an effective way to do this.
In an article in Workforce.com, Bill Passmore and Sylvester Taylor wrote about how the new generational preferences are forcing leaders to adjust their core competencies.
They stated, “Millennials are looking for challenging assignments that provide opportunities for learning and growth. As only about 13 percent of the workforce is highly engaged, there is much work to be done.” While on the surface this generation seems less engaged, they also noted that the generation doesn’t want to leave their current jobs necessarily, but instead are seeking more opportunities to grow where they currently work.
If you have young people in your department, you should be aware of their workplace preferences. Some of these include:
Transparency in pathways to career advancement
A more flexible work environment
Mentorship from their superiors
Gamification elements in workforce trainings
A strong workplace culture and emphasis on social impact
Public recognition for their workplace accomplishments
A competency management system can help a company better integrate these preferences and more engaging methods of learning and development. This group of young, energetic, and passionate employees can be a big benefit to any organization.
Retaining Millennial Employees Throughout their Career
Much has been written about the new generation’s job hopping. According to CareerBuilder, employers expect 45% of their newly hired college grads to leave after two years, and the study also showed that by age 35, about 25% of young employees will have worked five jobs. The stigma that may have accompanied job-hopping for previous generations no longer applies.
But as stated above, millennials will stay if they feel they have opportunities to grow. Outlining job-specific competencies, defined as the hard and soft skills required for specific jobs within the organization, can help to engage them. A study of the Canadian workplace identified “quick advancement” as being essential, and according to Forbes, this desire is even ahead of compensation level.
Companies who can show career pathways for advancement will be able to retain their current young workforce better. Competency management can assist you with this process, by benchmarking milestones for training, promotion, and increases in salaries. It also can help make transparent the skills and experience required for advanced roles that a young employee may want to aspire to. This could be a role on their current path, or a lateral move into a new function or department within the organization.
This is because another preference of is the ability to learn from a variety of disciplines. According to a Forbes article on managing millennials, they “are especially motivated by dynamic, cross-functional positions.”
Companies with a flat structure or at least cross-functional roles will do better in attracting and retaining these employees. A competency management system can assist in this by tracking skills required for multiple positions, and give individuals the ability to access and complete optional learning activities if they have the motivation to.
The millennial generation views work-life balance very differently than their predecessors. They want a more flexible work environment and many don’t want to adhere to the traditional 9-5 structure. A study by Canadian Business stated that 70% of millennials would prefer to work remotely.
Many companies are experimenting with various workday structures, such as half days on Fridays, working from home one day a week, and some companies even operate 100% remotely. Not that every company needs to go this far, but don’t be afraid to experiment with your work schedule and options, as your younger employees will thank you for it.
Millennials value growth opportunities, and for this reason, would rather have a mentor-mentee relationship than a traditional boss-employee one. A leader who can practice empathy, guidance, and nurture a millennial throughout their career will gain his or her loyalty.
This generation appreciates positive reinforcement, and does better with more frequent check-ins with constructive criticism and praise as appropriate. The traditional annual review is not as effective, and according to Inc, they prefer “regular feedback – and mentoring to learn, grow, stretch, and improve.”
Keep in mind that a mentor does not have to be an employee’s direct superior either, and often its better if this is not the case. Establish a structure of mentorship within your company using a competency software system if you can, and assign mentors as a learning method to new employees. The extra attention and relationship-building will not only help prevent them from leaving, but will nurture them into even more effective and fully competent workers.
Millennials grew up playing video games, and another tactic that can help teach this generation is through the process of gamification.
This technique is defined as “the application of game theory concepts and techniques to non-game activities” by TechTarget. And according to LMS provider Docebo, one strategy to teach millennials effectively is to “build out a gamification model that maps competencies into tangible elements. Using leaderboards, badges, points, a little bit of your travel budget, and some departmental goodwill, you can build a full competency management program that can motivate your learners.”
While assigning badges or points to skills can work, organizations can get more creative with their rewards. One of the current clients of our own competency management system, the Competency Manager, assigns points based on community service hours taken by employees, and rewards them with gift cards when they reach certain hour-thresholds.
Gamification is an example of a company finding creative ways to engage and motivate millennials, giving them positive reinforcement for advancing, and showing them that this learning can be exciting.
Millennials do not simply want a place to work to earn money, but to contribute positively to the world and make an impact. They are idealistic and driven by a sense of purpose and desire to make a difference. They prioritize companies that either have a mission of social good, such as a charity or other non-profit, or companies that have programs in place such as volunteering to contribute in other ways. The 2016 Millennial Impact Report stated that 46% of responders had volunteered within the past month.
And Deloitte’s Global Human Capital Trends 2015 showed that millennials want to be part of something bigger than themselves. In a world where a sense of a deeper mission inspires more than half the workforce, core competencies can be transformative. Core competencies define the fundamental values and strengths shared by the entire organization, going deeper than the basic skills required to be a good employee. These competencies are likely a part of a millennial’s life outside of work, and he or she will value the company even more if they are also a part of work life.
Millennials have grown up expecting to be recognized for their accomplishments. Whether it’s the “8th place trophies” from Little League, or the constant assurance from social media likes, they want to be noticed. While its easy to look at this as a negative attribute, it can be turned into a positive. As mentioned earlier, gamification can inspire employees internally to achieve more. And externally, millennial employees can be your best brand ambassadors. Involve them in company-wide seminars, workshops, networking events, etc. that they are passionate about, and they will be happy to share pictures, videos, and more online to their social networks.
Social media is the glue that holds them together, it is their means of communication. And as a young person meets a particular milestone in work, encouraging that he or she advertises this through Twitter, Facebook or Instagram will let friends know about their career success, and further motivate the employee. It also may attract friends and other people in that person’s network to join the company or consume its content and products.
Leadership Competencies Need to Change with the Workforce
The takeaway is that the workforce is changing, and the way we define leadership needs to change with it. Our workplaces are filling up with high-potential, high-expectation millennials who bring a wealth of energy, enthusiasm, and ideas, but without the right leadership to nurture and retain them, they won’t stay long. HRSG (Human Resource Systems Group) reported that “a competency-based approach to talent management can help facilitate a shift towards a more millennial-friendly culture in several ways.”
Competency management is the new method of learning development that is most effective for the new generation in the workforce. It is appealing because it takes into account soft skills and opportunities for growth within an organization in a more comprehensive way. While leadership competencies such as “Embracing Diversity” or “Using Empathy” may seem unnecessary or hard to prove the ROI, it is these types of skills that millennials want to learn and value in others.
Competency management software can also help to promote transparency and collaboration within the organization. And if a young employee can easily see a future within the organization, he or she is less likely to leave it. There are many other ways a competency management system can benefit an organization’s employees, young or old. To find out more about our solution, visit our website.
In conclusion, if your company is dedicated to retaining the young and ambitious millennials in your workforce, choosing competency management software can help you develop and retain them.
Nowadays there are countless sales books, videos, and more that promise to teach you how to be a better salesman. I’ve read plenty of them and I’m sure you have too, but one of the best ones that has stood the test of time is “SPIN Selling” by Neil Rackham.
Personally, this book has helped me tremendously in my sales and marketing efforts. And after going through all of my notes, I felt I should turn them into an article that would be helpful to people, whether they are involved directly with sales or not. And at the very least, save you the time it would take to read the whole book!
Even though SPIN Selling is an older sales book, it is still relevant because of its unique approach and backstory. Neil Rackham is not a salesman in the traditional sense, he is a researcher and consultant. From the ‘70s to ‘80s his company embarked on a 12 year, 1 million dollar research study to determine what resulted in most effective sales performance. The hours and hours of studies, interviews, and research with different companies was distilled into a very simple model of questions that successful sales people asked in larger sales, which he called SPIN Selling. SPIN stands for:
Situation
Problem
Implication
Need Payoff
And in his research, he also found out that there were clear differences in sales calls depending on the product sold. He made a distinction between complex, larger sales, and simple, smaller sales. The SPIN Model applies to complex sales.
Complex Vs. Simple Selling: How Are They Different?
Traditional sales techniques are good for simple sales (usually one call and a lower dollar amount) but do not work well for complex (multiple calls, large dollar amount) sales. This is for a variety of reasons, but two main ones are that complex selling requires buy-in from multiple stakeholders in the purchasing decision. Because of this the seller engages in many phone calls and meetings that involve not only discussing the product or service, but also about building relationships, as he or she will be working with people in that company for a long time if the sale is made.
And not only that, but another important distinction is that most of the dialogue does not occur during these calls at all, as it does in small sales, but internally between stakeholders of the organization after the sales calls. The sale is really made when the sales person is NOT in the room, but when the company employees discuss among themselves and agree to buy. For this reason, a sales person must arm their prospect with the tools to sell to their own coworkers.
In addition to these major differences, keep in mind that the SPIN Selling model is not a rigid formula, it’s more like a road map. While the sales calls should loosely follow this structure it may not always, so do not view this like a checklist that must be done in a specific order all the time.
What Are the SPIN Questions?
The different stages of SPIN are defined as:
S (situation)
Asking about the current state of the company to get context on their responsibilities, processes, tools, objectives, and more.
P (problem)
Asking questions that allow you to identify any current problems the organization is having and start to formulate their specific needs.
I (implication)
Asking leading questions related to the problems discovered in the last stage. These questions will magnify these problems and uncover how they can negatively affect the organization.
N (need payoff)
This is the opposite of the implication stage. It involves asking questions about solutions. The seller will uncover how solving the problems identified will benefit the organization. If all of the stages are executed properly, the prospects will even tell YOU how your product or service can help them.
It is difficult to think of questions for all of these stages on the spot. Instead, prepare yourself in advance. Before every sales call, write down three problems the customer might have that you can solve, and three examples of problem questions you can use to discover them. For specific examples of these types of questions and more info, go to the corresponding section below.
But sales calls or meetings do not consist only of the seller asking questions. In the book, Rackham outlines four major stages of a sales call, including when to ask the SPIN questions.
Four Stages of a Sales Call
Preliminaries
This is where the stakeholders for the vendor company and the potential customer meet. According to Rackham, don’t be afraid to get down to business in this selling stage. While spending a minute on pleasantries is okay, spending too long does not correlate to more successful complex sales. Instead, a better way to open larger calls is to go over the objective and establish your role as the seeker of info. Outline expectations so the customer feels comfortable from the beginning in providing information and answering lots of questions from you.
Investigation (the SPIN stage)
The key to this stage is to remain focused on one thing – asking questions. This is the stage where you will go through the SPIN model by asking situational, problem, implication, and need payoff questions.
In this stage do not focus on what you will tell the customer about your solution. This comes in the next stage. Always keep in mind that if you’re getting too many objections early on in the call, it means you’re not asking enough questions. Simply wait longer to offer a solution and ask more questions to fix this.
Demonstrate Capability
This is the stage most sales people rush into, which is showing what your product can do and why it is a great solution for the customer. In the book Rackham states that a benefit “should show how the solution meets an explicit need expressed by the customer.” Only discuss features and aspects of your product that directly address these explicit needs you learned about from your SPIN questions.
Do not talk about all of the ways the product can be used or all of its features, because at this point the customer does not care. This will only detract from what he or she wants to hear, which is how it will solve the specific problems that were expressed. And always keep in mind that value to the customer is so much more important than any specific feature or capability.
Obtain Commitment
Lastly, a successful sales call results in a commitment from the customer. Rackham is very specific about how he defines a commitment. Four clear actions he outlines to gain commitment are:
Give attention to investigating and demonstrating capability.
Double check that key concerns are covered and ask lots of questions.
Summarize key points and benefits of the discussion right before moving to commitment.
Propose a commitment and suggest a next step.
And the four types of results in complex sales are:
Orders: This is when the customer makes a purchase and is a successful sales call.
Advances: This is when you set objectives for specific actions (such as schedule a next meeting) and is also a successful call.
Continuation: This is when the parties make an informal agreement to talk in the future, this is not a success.
No sales: If the prospect has no need for the product, this is also an unsuccessful call.
In simple selling, closing is the most important aspect, and you can try many types of established closing techniques to get this result. But with large, complex selling, it is different. Rackham showed that high numbers of closes in large sales led to fewer wins. Once again, it is crucial to stick to asking questions and gaining information at first, not attempting to make a sale.
And lastly, the best sales people review the calls after they made them to recognize what worked, what didn’t, and adjust accordingly. The best sales people understand the key to success is in the details of knowing what to ask and what you are going to do before the call even starts.
Examples of the SPIN Questions
Below I’ve outlined what the four SPIN stages are, as well as specific examples of questions you can use during each. Keep in mind these questions should be flexible and change depending on the context of each call!
Situation Questions
Situational questions help set the stage for the rest of the call and are how you learn basic information about the customer. Don’t spend too much time here, as too many situational questions lead to failure. Ask just enough to set up the next stage, problem questions, which should be used more often.
Examples of Situation questions include:
What is your current role?
Tell me about your day to day duties?
How many locations do you have?
How many individuals and/or teams do you oversee?
What is your current process?
Which software platforms and tools do you currently use?
How long have you been using these tools?
What is your current budget for a replacement?
Problem Questions
This is where you identify the prospect’s current problems. A simple method is to ask, “What are the issues with your current process?” Keep in mind that in large, complex sales, it is rare that your solution will solve every problem the company has, but customers don’t expect this anyways. They want the main problems to be solved, and at a reasonable cost.
Many sales people discuss features and details in small sales – do not do this in large sales. Customers don’t care about the features at first, they care if their problems will be solved.
In the problem stage, the successful sales person is a detective, and does not go into a sales call assuming to know all of the problems, but instead to ask the buyer questions to uncover them. As the buyer answers the more general problem questions, the seller can ask more specific questions to uncover deeper issues the company is currently facing.
Examples of Problem questions include:
How satisfied are you with the current way of doing things?
Are there any problems with how things are done now?
How many people are required to do the job with the current process?
How long does it take you to do the job now?
Is it too costly to complete an average job?
If you had to solve one problem you have now, what would that be?
Implication Questions
This is arguably the hardest but most important stage of the call. This is where you expand on the problems you identified, and ask follow up questions to magnify them for the customer. Ask lots of “What if” questions in this stage. It is crucial to not offer a solution to the customer until the need has been built up to be strong enough, otherwise you will face objections.
Implication questions are problem oriented, while need payoff questions (the next stage) are solution oriented. It is difficult to come up with these types of questions, and they likely won’t come into your head during the call, so make sure to plan them in advance. A helpful technique Rackham gives is to imagine the customer objecting to you, saying “so what, I have these problems, but they aren’t that serious.”
This will force you to think of answers to these questions, and uncover the deeper problems underneath. In many cases potential customers can identify their problems, but are so entrenched in their day-to-day activities they do not realize how much of their process is built around these problems. As you ask probing questions, the customer will have “lightbulb moments” and see how a problem that seems small leads to other problems throughout the organization.
Simply uncovering problems does not make a successful call though. All employees have problems. You need to grow those problems until the customer is talking about action and is saying things such as “I’m going to overhaul our program next year.”
Examples of Implication questions include:
If you spend too much time on (duty they mentioned), what other duties are overlooked?
Are there any business goals or KPIs you have missed because of (current problem identified)?
If there is a problem with (necessary duty), how long does it take to fix this issue?
Have you ever lost a customer because of the current process?
In recent memory, what issues have been caused because of your current process?
Have you gone over budget because of the current (too costly or timely) way of doing things?
How does (the current situation) affect your personal career growth?
If (day-to-day duty) doesn’t happen, what is the result?
Does (prospect’s problem) affect duties of your superiors or other team members?
Need Payoff Questions
This is an often overlooked, but crucial stage in the sales call. Rackham proved in the SPIN Selling book that top sales people ask 10x more need payoff question than average. So ask as many as you can, maybe even more than you think is necessary! This is when you talk about solutions to the problems you have identified. Ask questions that start with “If you could” or “Would this help?”
When the customer raises needs, most sellers talk about their solution (product or service). But this is when you should ask need payoff questions because you get them to realize how they would benefit from having the identified problems solved. Remember, the prospect does not care as much about features, only benefits and value to them.
Need payoff questions are so important because they focus the customer’s attention on the solution rather than the problem. Up to this point you have been identifying problems and magnifying them. The customer has a negative viewpoint, and this is where you take the opportunity to turn their thoughts positive and be the solution! If done effectively, the customer will actually describe the solution to you and how you can solve their problems.
In the book Rackham tells an anecdote, of a successful millionaire dollar sales man. The man said it’s important to keep in mind that you (the seller) are only a small part of the selling. He recommends to think of a sales cycle like a play. Most sales people think they should be great actors, but they need to be great directors, meaning they are influencing other people to carry out the goal.
The key to this is in the need payoff questions, because it helps the potential buyer think deeper about what their needs really are. As mentioned before, most of the selling really occurs between your contact and other key decision makers in the company. Need payoff questions are valuable because there is no way any prospect can be an expert in your product with one or two calls. But if he or she can recognize the needs that product solves, he or she can accurately describe its benefits to other people in the organization. In this way, your contact is an asset in selling to key stakeholders, even though you may not talk to them directly as often.
Examples of Need Payoff questions include:
How would that help?
Why is that important?
What benefit do you see in (eliminating current problem)?
If you could easily solve (identified problem) how would that help you achieve your current goals?
If you could save time on (current situation), how would that help you?
What could you do with the extra time you have saved?
Would (eliminating current problem) save you money?
Why is (action that accomplishes goal) important to you?
Now that you have the knowledge of decades of selling experience, it’s time to go out there and start selling! Keep in mind that following the SPIN model is easier said than done, so be sure to practice scenarios on your own, and properly prepare for any upcoming calls. Good luck!
How is it that some companies continue to be successful and innovative for years, even decades? In any field this is a challenge, and even more so with the rapidly changing technology landscape. Companies that excel across decades can do this because they successfully implement cultures and philosophies that breed innovation, and an awareness of market trends. This happens purposely as a result of how the organization and its individuals act.
One way of doing this is by developing core competencies. Competency management for individuals refers to defining the necessary skills required to perform successfully to a set of criteria, such as an employee’s role. And at a macro level, core competencies are defined as “strategic advantages of a business, including the combination of pooled knowledge and technical capacities, that allow it to be competitive in the marketplace,” according to Investopedia. Having a few central themes and behavior-sets help direct organizational decisions.
Below I’ve highlighted Google, Amazon, and Facebook, outlined common themes that allow them to be innovative, and summarized them so you can begin to implement them as core competencies within your own organization.
Google is a company that is synonymous with search, and as a result, information. Google is the world’s search engine leader, with over 63% of U.S. searches conducted on the platform, which accounts for 84% of its total revenue.
Google is one of the world’s most innovative companies because it does not stop at just delivering the world’s most popular search engine, but in carrying this mission of democratizing the world’s information through many other methods. These include platforms that today are commonplace such as Gmail, Google Maps, and Google Earth, to futuristic missions such as driverless cars, and delivering internet to the more than three billion people who still do not have access.
Google can remain innovative and successful because of its reliance on several core competencies, such as:
Flexible
Open Source Mentality
Think Big
Flexible Structure Produces More Innovation
The organization is famous for building in change and innovation into the company from the ground up with its creative structure. One example of this is with its “20% time” model, which allows employees one full day a week to work on any project they choose.
Google builds innovation and change into the company’s culture with policies and encouragement. In a 2016 talk at the Forbes CIO Summit, Google CIO Ben Fried even mentioned that change is one of its most important core competencies, saying, “People are creatures of habit, and yet technology has never moved as quickly as it is today. As a result, CIOs need to make change a core competency. The ability to change is essential to stay competitive.”
Google has even upped the ante on its dedication to change with its in-house incubator Area 120. According to Fast Company, this idea was instituted two years ago, and is similar to 20% time, with one major difference – employees who are selected spend 100% of their time on the project. Google can behave like a startup with the resources of a major corporate company in this way.
With such divergent products and services, from a search engine, to driverless cars, to Android phones, Google is a huge proponent of the “open-source mentality” that many developers have. The company welcomes research and insight from many types of people and disciplines, whether they are in the company or not.
According to Inc.com, Google greenlights over 250 new research projects a year, spending billions of dollars in the process, and even inviting researchers on-site for their sabbaticals. The company has a history of acquiring or investing in seemingly unrelated companies due to scientific or data capabilities. Examples include Nest, the thermostat and smart home company it acquired for $3.2 billion, or 23andMe, the company that can sequence anyone’s genome, in which Google invested millions of dollars.
Google welcomes all types of researchers to access its tools, data, and knowledge in order to make discoveries. And in the truest sense of the word, Google’s wildly successful Android operating system is fully open source. It’s worth noting that Android phones account for over 80% of all phones sold.
Thinking Big (and Backing it Up!)
With so many ambitious projects that Google has produced or is currently working on, it’s no secret that the company likes to think big. But just thinking is not enough, the company backs this up with its actions, and segments the organization in ways that allow its best big thinkers to do what they do best.
Google underwent a huge structural change in 2015, repurposing the company so that its core services (such as search and AdWords) were under the Google umbrella, but its more diverse projects were under different companies.
This is a big deal because it allows Alphabet to make longer term bets with its other wings of the organization, while continuing its core products/services.
One of the most secretive of these new companies is entitled simply “X” and has also been called “The Moonshot Factory” according to the company’s website. This takes the evolution of 20% time and Area 120 to an even greater level. Some of the exciting new projects that are a part of X include:
Waymo: A self-driving car project.
Wing: A delivery drone service.
Loon: A project to create worldwide internet access using balloons.
Malta: A project to store renewable energy in molten salt.
Brain: A research project on Artificial Intelligence and machine learning.
This is just a fraction of the ambitious projects Alphabet, Google, and X have in the pipeline, which sum up Google’s core competencies in a nutshell. As Managing Director of Area 120, Alex Gawley says, “You want to build products that solve problems that people encounter daily.” Google can do this consistently because of the core competencies it has developed and deliberately built into the culture of its organization.
It’s no secret that Amazon has become an incredibly successful and omnipresent company in the marketplace; the organization is currently listed as the second most valuable in the world.
The company has not only been able to grow its core business as an ecommerce giant but has been able to innovate and move into other market segments successfully. While Amazon does many things well, some of its most significant core competencies are:
Distribution and Logistics
Creating Self-Sustaining Platforms
Leveraging Technology
Distribution and Logistics Core Competency
Amazon thinks of itself as “Earth’s most customer-centric company” according to its website’s mission statement. It delivers on this mission with an unparalleled ability to streamline the buying process, deliver products quickly and efficiently, and to create tools and an ecosystem where vendors and customers can connect with each other.
The company changed the ecommerce landscape with the introduction of Amazon Prime and guaranteed two-day shipping back in 2005. And it went even farther with the introduction of Prime Now in 2015, guaranteeing delivery within two hours for select products and in select cities. This type of distribution capability is unmatched by other organizations.
Creating Closed Ecosystems
But Amazon thinks differently, and not only wants to provide products to the globe, but to provide tools and platforms for others to create and run their businesses. In this way it executes on another competency, creating closed ecosystems and platforms for sellers. On Amazon.com in 2017, over half of all sales were by third party merchants, according to a shareholder’s letter by CEO Jeff Bezos. And not only that, but 55% of online shoppers begin their product search on Amazon, according to a 2016 survey from BloomReach.
With such a high volume of businesses succeeding on Amazon, the company ensures that not only will it continue to earn fees from these companies, but that they will stay on the platform because they are making money!
The company continues to innovate with this way of thinking, providing multitudes of platforms that allow sellers, content creators, and more to distribute products and services under the Amazon umbrella. Here are just a few examples:
Twitch – Video Game Streaming
Twitch is a massive force in the video game industry and streaming in general. One of the most popular broadcasters is a 26 year old who goes by the name Ninja, and makes an estimated $350,000 each month from the platform. He was recently joined by popular rapper Drake during a Fortnite game, smashing Twitch’s record and resulting in 628,000 concurrent streams. Twitch is growing in popularity fast and will become a platform that many aspiring gamers build their careers on.
Audible – Audiobooks
In a totally different market, Amazon has also become the go-to platform. According to Observer, 44% of audiobooks are purchased on Audible.com, which Amazon owns. Audiobooks are growing in popularity, increasing sales by 20% in 2017. Audible is not only the place people go to listen to audiobooks, its where many independent authors sell their books, and depend on the platform for their careers as well.
Amazon Web Services (AWS) – Cloud Hosting
Amazon made a big early bet with its cloud computing network, Amazon Web Services. AWS now hosts over 33% of the cloud and is Amazon’s fastest growing business, growing 252% in the past three years. While competitors such as Google’s Cloud service and Microsoft Azure are growing too, Amazon has a big lead. Amazon has positioned itself so that it hosts much of the world’s internet. Not only do independent streamers, authors, and small businesses depend on Amazon’s platforms, huge organization such as Netflix, Spotify, Airbnb, Comcast and more host platforms using Amazon Web Services.
Whole Foods – Supermarket Chain
And lastly, while Amazon’s dominance on the web is clear, it is worth noting that the company is making strategic acquisitions to establish themselves offline too. With its purchase of Whole Foods in 2017, the company now sells the food you eat as well.
Amazon’s vision is to create closed, interwoven ecosystems of buying and selling. Many people now and in the future will buy most products on Amazon.com, buy groceries from Whole Foods, host their website on AWS, and use Amazon’s Ecommerce platform for their business. Amazon understands the virtuous cycle that occurs as more and more commerce platforms are interconnected and owned by the organization.
Of course, none of this is possible without a reliance on sophisticated technology and a constant push to improve it. Amazon has its hands in many divergent markets, but with all of them it brings its signatures of unparalleled customer convenience and forward-thinking technology.
Amazon can innovate quickly and consistently because it practices an agile methodology, a common approach to software code writing, and applies this to the organization at large. It focuses on creating small teams quickly and producing a minimum viable product as fast as possible. The organization prioritizes “launching early over everything else,” according to a former employee memo.
One example of Amazon leveraging technology in a disruptive way is its own version of a convenience store, called Amazon Go. These cashier-less stores have high tech cameras that record what customers choose, and then charge digital carts as people walk out of the store.
Examples of leveraging technology can also be seen in its use of drones and robot workers to help improve efficiency of its ecommerce business. The company currently uses robots in its warehouses to help with moving inventory, and has plans to deliver to customers’ doorsteps using drone technology.
Amazon constantly delivers on its mission of being “Earth’s most customer-friendly company” due to a consistent reliance on core competencies such as distribution, logistics, creating platforms and tools for people, and leveraging technology.
Facebook: Making the World More Connected
(Image Source: Facebook)
One of Facebook’s core competencies is the ability to rapidly iterate and add new features; it was named one of Fast Company’s most innovative companies of 2017. According to the article, Facebook innovated with concepts such as “the Creative Hub, a platform for businesses and agencies to mock up, share, and test ads.” It has several core competencies that permeate the entire company and allow them to be consistently innovative. These include:
Move Fast
Employee Autonomy
Focus on Impact
Move Fast and Break Things
Facebook likes to exemplify the Silicon Valley mantra “Move Fast and Break Things” which is the hacker’s mentality. In Mark Zuckerberg’s 2012 letter to investors he said, “Hackers try to build the best services over the long term by quickly releasing and learning from smaller iterations rather than trying to get everything right all at once.”
This agile approach can come with its fair share of difficulties. Facebook has faced plenty of backlash with controversies lately, including a major data security breach that led to Zuckerberg testifying before congress. But this willingness to be bold and fast-moving has its benefits. Facebook consistently creates products and improvements to its platform quickly. Significant features such as removing trending topics, adding timeline stories, and adding image filters have all been launched in the past few years. The “hacker way” allows the company to move quickly and constantly improve the platform.
Facebook also notably gives its employees autonomy and trust, and with that comes self-imposed high standards of responsibility and performance. In an article written by a former employee Pedram Keyani, he tells a story about working on a code change to the Timeline which was pushed out to 25 million people on his second day at the company.
Zuckerberg himself echoed this also in the investor letter, saying that the developers organize hackathons on their own, and that “Many of our most successful products came out of hackathons, including Timeline, chat, video, our mobile development framework, and some of our most important infrastructure…”
Facebook can make innovation a daily habit with these principles. According to Spigit, which provides innovation management software, idea frequency, implementation, and executive buy-in is crucial. These are three principles Facebook holds. Not only do the employees self-organize and enjoy the process of creating new products, but executives including Zuckerberg himself, get involved and implement the best ideas that stem from these sessions. This motivates employees to continue thinking outside-the-box.
Focus on Impact
And lastly, Facebook can innovate and be successful because it operates based on a shared goal of changing the world for the better. The company’s mission is to “make the world more open and connected,” and this inspires employees to create great products and services. This philosophy drives all company actions, whether operational decisions, or hiring, and allows the organization to be consistently competent and high-performing. Facebook is listed every year as one of Glassdoor’s best companies to work for this very reason. The employees believe in Facebook’s mission and are inspired to go to work every day.
Innovate in Your Organization by Bringing These Core Competencies Together
There are many similarities between these three organizations and others that are top performing. For those that want to focus on innovation, there are some common themes to follow:
Foster a Culture of Innovation.
Be open to new ideas and open communication with executives.
Trust employees and give them freedom.
Move quickly and look for the next improvement always.
Don’t be afraid to fail.
Have a higher purpose.
Foster a Culture of Innovation
While it may seem obvious, being an innovative company does not happen accidentally, but by deliberately setting the company up for this type of success. Google, Amazon, and Facebook all have different ways of accomplishing this, but all have the type of structure that allows them to innovate. With Google, the restructuring of different goals throughout the Alphabet umbrella, and with Amazon, through its small starting teams on new initiatives.
Not only are these companies structured in this way, but the culture promotes and encourages innovation. Through hackathons, structured time away from core duties, collaborative office environments that encourage discussion, and more, these organizations produce environments that are conducive to new ideas.
Open Executive Communication and Welcoming New Ideas
New ideas that come from within an organization must be encouraged by executives to flourish. They must be approved from the top-down, but often are sparked from the bottom-up, according to an article in Forbes on innovation in the workplace.
But not only that, most innovative organizations welcome ideas from outside perspectives and divergent disciplines. Cross-functional teams of individuals in different roles can help encourage new ideas, or even bringing in outside resources to help foster creativity such as a consultant or freelancer. In Google’s case, it even brings in academics and researchers who spend sabbaticals within the organization. With this kind of encouraged collaboration happening daily, innovative ideas are born organically.
The CEO of YouTube, Susan Wojcicki said, “Some of the best ideas at Google are sparked just like that – when small groups of Googlers take a break on a random afternoon and start talking about things that excite them.”
A logical step from creating a culture of innovation and executive buy-in is of course, fully trusting your employees and giving them freedom to do what they do best. The best example of this is of course Google’s 20% time, but there are many others.
Give employees autonomy, allow them to do what they are most competent in, and give them purpose. Success and innovation will follow naturally with that recipe.
Move Fast
One of the most common themes in all these organizations is they are not afraid to fail, aim for big ideas, and move fast. They start new ideas with small groups, and as the idea grows it spreads to the rest of the organization. As innovation consultant Tendayi Viki said in Forbes “As we succeed with early adopters, other business leaders will then be attracted to our transformation agenda.”
Embrace Failure
Companies cannot be the most innovative in the world, creating products that have never been thought of before, without the reality that failure will occur. But by thinking of failing fast as a core competency and a success, not a mistake, organizations can move past these inevitable roadblocks. “Failure is the way to be innovative and successful. You can fail with pride,” says Google’s chief social evangelist Gopi Kallayil.
Have a Higher Purpose
Perhaps most important of all is to have a higher purpose. An organization that does not have a north star that drives all business actions and eliminates distracting elements will not be able to consistently perform at a high level. One of the most innovative business leaders of all time, Steve Jobs, said it best, “Innovation is saying no to a thousand things.”
And in his Stanford commencement speech he said, “Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do.”
The greatest organizations may have lots of products and services that are seemingly unrelated, but they all follow a singular mission. And as organizations grow, and hire people who believe in this purpose, it only gets stronger and more meaningful. Whether it’s “To organize the world’s information and make it universally accessible and useful” like Google, or “To give people the power to build community and bring the world closer together,” like Facebook, these ambitious goals drive the world’s most innovative organizations. And with this blueprint, it can drive yours as well.
CABEM’s Competency Management Software
In order to succeed and innovate like a FANG company, you must run your organization and train your employees in an innovative way. While many companies train using Learning Management Systems (LMS), or using documents and spreadsheets, these are outdated and incomplete methods.
Competency management software such as Cornerstone or our own Competency Manager allows companies to formally build competency programs and deliver them to all individuals and locations across the organization. This allows them to not only train individuals, but to prove that the training is successful, and track progress and/or required credentials.
