Turning Around Slowing Growth — Amazon.com’s Good-to-Great Moment.
Why do most companies fizzle or flat-line, while others become truly great?
Consider a decisive moment in the history of Amazon.com.
2001 was the Waterloo for most highflying dot com companies, but it was also the year that Amazon went from good to great. Under intense pressure after an influential New York analyst had predicted the company would go under within the year, bleeding enormous amounts of cash, and with slowing growth in their core book business, Amazon had begun to flail about. But then, they not only pulled it together, they lay the groundwork for domination. Brad Stone tells the story in his authoritative book on the history of the e-commerce giant, The Everything Store.
“At a two-day management and board offsite later that year, Amazon invited business thinker Jim Collins to present the findings from his soon-to-be-published book Good to Great. Collins had studied the company and led a series of intense discussions at the offsite. “You’ve got to decide what you’re great at,” he told the Amazon executives.
Drawing on Collin’s concept of a flywheel, or self-reinforcing loop, Bezos and his lieutenants sketched their own virtuous cycle, which they believed powered their business. It went something like this: Lower prices led to more customer visits. More customers increased the volume of sales and attracted more commission-paying third-party sellers to the site. That allowed Amazon to get more out of fixed costs like the fulfillment centers and the servers needed to run the website. This greater efficiency then enabled it to lower prices further. Feed any part of this flywheel, they reasoned and it should accelerate the loop. Amazon executives were elated; according to several members of the S Team at the time, they felt that, after five years, they finally understood their own business.”
The emphasis is mine. A beautiful clarity. What can we best in the world at? What drives our economic engine and makes our flywheel turn? And what excites us enough to commit to making this work?
At DiGo, we figured out that we could be best in the world at helping mid-sized organizations grow. By providing an integrated, cross-trained team of growth masters so clients can keep their own teams lean. Which allows them to invest in and focus on growth. And by keeping the cost of testing down through no-commission direct media billing, inexpensive production, and in house programming. Then squeezing every last dollar of return through intense daily optimizations, deep and detailed dashboard reporting and analysis, and extensive use of distributed content strategies. And finally, by deploying our best creative people across all touch points, rather than separate and unequal departments for “above and below the line” media. The result is our clients show they can produce more customers and revenue per marketing dollar and they grow. And this fuels our growth – a beautiful flywheel indeed!
Let’s work on yours! Please feel free to respond directly to my personal email at email@example.com. Or call us at 646-507-5820.