Remaking retail through people and process

💡JC's Newsletter #84

Dear friends, 

In JC’s Newsletter, I share the articles, documentaries and books that I enjoyed the most in the last week, including a must-read. 

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💡Must-read

👉 Former Amazon CEO of Worldwide Consumer Jeff Wilke on remaking retail through people and process (Iconic Ideas)

  • When I showed up at Amazon, growth was crazy, everything was chaotic, and I didn’t know anything about retail. So, when I first walked into a fulfilment center, I didn’t see a warehouse, I saw a factory. We applied lean manufacturing principles, Six Sigma, and statistical process control and fortunately it was the right way to improve the customer experience, lower costs, and increase our scalability.

  • By bringing our cycle times down from 18.5 hours to 2.5 hours in 1999, we were able to offer a very precise delivery promise to customers. Then in 2001 we built out a subscription model for it, called Fast Track, and that eventually became Amazon Prime. The roots of Prime’s customer experience dates back to manufacturing processes that have been around for decades.

Operational excellence is often the root of very differentiated innovation. 

  • Jeff encourages us to build a mental model that tells us something is possible and then, based on that model, builds a product that customers want as fast as we can.

Thinking very long-term, being member-obsessed but also biased to action when you have validated your long-term view.

  • Amazon published its leadership principals that I developed with a small team. As a leader, it was important for me to use those words in every context in which I’m interacting with other Amazonians. I’ll even look on my phone to make sure I’m using the right words because the language matters. In 18 years, I haven’t seen a need for a radical rewrite of those principles.

We use our internal leadership principles everywhere and in every interaction (reviews, discussions about product, …)

  • There are four pillars I use to describe Amazon’s culture: 

  1. It starts with customer obsession. When we design products, we write the press release first, about how it will impact the customer experience, and work backward to describe the product and the tech we’re going to build.

  2. The second is to invent and simplify. We are trying to build a company that embraces the idea that pioneering involves experimentation, innovation, and failure, and attract people who want to be in a place that is willing to take risks.

  3. The third pillar is ownership. We ask leaders never to sacrifice the long-term for short-term results. They act on behalf of the entire company, beyond just their own team.

A lot of things (positive & negative) can be said about Amazon, but I think their long-term vision is something that really differentiates them.

  1. Operational excellence is the fourth pillar. It’s not enough to just invent a great product. If you can’t get your cost structure to be as efficient as possible, you leave yourself exposed to someone who can build a substitute at a better cost for consumers, and they will win. We learned very early that we had to reduce defects and cycle time to yield both lower costs and higher quality.

  • We’re willing to reward experimentation, accept failure, learn from failure, and continue to seek long-term, large opportunity investments that are driven by an understanding of the customer, and often by needs the customer doesn’t even have yet. 

Define the new needs is very important about how we build our long-term views.

  • For this approach to work, you need a culture that accepts pioneering and experimentation outside of the core competence. One way to foster that is by assigning a single-threaded leader to things. When the first press release was written for AWS, Jeff assigned Andy Jassy to that project with no other responsibilities

“The best way to fail at inventing something is by making it somebody’s part-time job.” 

We are pushing for extreme focus on A+ problems at Alan too. 

  • Our senior leadership has always been compensated based on equity in the whole company with a very small cash component and no bonus. 

We also don’t have bonus at Alan, the single currency is our equity and we build the upside together.

  • I knew back in 2005 that in certain parts of the world, we would begin to struggle with the transportation capacities that were available to us as we grew. I went to talk to all the large carriers around the world to see if they’d want to invest the kind of capital needed to keep up with our growth. None of them could really invest enough. So, we started down the path to complement their capacity. That way, we’d never have a surprise bottleneck.

Again a good example of ownership.

🏯 Building a company

In addition to selected articles, I share one of Alan's leadership principles every week - the same one that I share internally every Wednesday.

👉We raise the bar when we hire.

  • Do you know the Lake Wobegon Strategy? We're fans. We recruit people who impress us in their field and whom we feel we can trust with serious matters.

  • When we recruit, we ask ourselves: Will this person raise the average level of effectiveness of the group they join? To what extent could this person be a superstar?

  • Want to know more about our hiring process? 👉 (about.alan.com)

👉“Jootsing”- The Key to Creativity (FS Blog)

We can break the creative process down into the following three steps:

  1. Gain a deep understanding of a particular system and its rules.

  2. Step outside of that system and look for something surprising that subverts its rules.

  3. Use what you find as the basis for making something new and creative.

This process of understanding a system in order to step outside of it as “jootsing,”.

Limitations are essential because they give us a starting point and a shape to work against.

👉 A B2B Product Management Story (Sheryas Doshi)

  • When you talk to a customer about a specific problem, they will naturally “focus” on that problem, at the exclusion of other problems they (or their business overall) is facing. 

  • With this focus comes a disproportionate emphasis on solving THAT specific problem.

  • Hence the customer’s initial excitement about your possible product solution.

  • Hence also the tepid response and adoption once you’ve built said product.

  • The focus of your early discussion was on the problem, solution space, and willingness to buy.

  • But when the customer is FORCED to prioritize the implementation of your product vs. every other problem they are facing it is no longer a theoretical “would you use this?” exercise

  • How to overcome this?
    First, be objective. A surprisingly high proportion of PMs view customer interviews as a way to confirm or justify their product ideas or to solidify an Executive's mandate.

  • After you’ve talked to a customer about a specific problem and possible solutions you could build, ask them to stack rank the problem being discussed vs. the other problems they are trying to solve for their business and their organization.

  • A surprisingly high number of failed B2B products shouldn’t have been built in the first place.


🗞In the news

📱Technology

👉 Waterdrop F1 analysis and learnings (F1)

  • They target Billions of members 

Crowdfunding:

  • Patients or their relatives or friends can initiate crowdfunding campaigns on our platform and share campaign information through social network.

Mutual Aid:

  • “Enabled participants to help one another to ease his or her medical cost burden of over 100 types of critical illness. We have positioned this platform as a scenario for raising health protection awareness among participants who in turn may seek more comprehensive insurance coverage.”

Marketing:

  • They spent 70% (!) of their net revenue in marketing! 

👉 Tiktok growth (Plateformer)

  • The report found that in the U.S., people who use Android phones now spend an average of 24.5 hours in TikTok per month, compared to 22 hours per month in YouTube.

  • TikTok is testing “Shoutouts,” a copy of Cameo’s paid video shoutouts. Going to guess that the Charli D’Amelios of the world could make a lot of money doing this; smart move from TikTok. (Amanda Perelli / Insider)

🏥 Healthcare

👉 Les Echos:  Complémentaires santé : Olivier Véran met à l'étude le scénario d'une « grande Sécu » (Les Echos)

  •  «  complexité de gestion pour les professionnels de santé »

  •  « les montants des frais de gestion qui pèsent sur le pouvoir d’achat des assurés » (...) qui se traduit par un empilement des frais de gestion au détriment des assurés.

Nous prouvons avec Alan que nous pouvons avoir des frais encore plus efficaces (grâce à la technologie qui se met au service de l’humain) et une expérience utilisateur largement supérieure. Il est important de laisser de la place à l’innovation dans la santé aussi, à notre avis, et une grande sécu pourrait fortement réduire cela.

Il faut beaucoup de transparence pour permettre au système de s’améliorer en permanence, et pousser vers plus d’intégrations public-privé via APIs.

👉 Omada Health launches the Omada Insights Lab to help improve healthcare outcomes (Tech Crunch)

  • They looked at the automated nudges, reminders to track meals, mealtime push notifications and engagement with the care team.

  • While all of the approaches made it more likely that people would track their meals — an important task that helps patients stay on track with their diets — only one drove increases in weight loss: engagement with the care team. They found that patients who interact with their care team or community in the first week of the program are 24% more likely to achieve their health goals and patients who message their care teams are twice as likely to achieve positive health outcomes.

  • Consequentially, Duffy said, “It’s not just engagement that matters, it’s the type of engagement.”

  • Omada took these insights and reduced the use of nudges and implemented ways for the care team to interact with the patients more.

👉Babylon, A World Leading, Digital-first, Value-based CareCompany, Announces Plans To Become A Public Company Via $4.2 Billion Merger With Alkuri Global Acquisition Corp. (prnewswire)

  • Babylon is a world leading, digital-first, value-based care company, covering 24 million people across four continents

  • Transaction implies a $4.2 billion equity value for Babylon 

  • Babylon helps patients through two primary channels -- Babylon 360, its digital-first value-based care service; and Babylon Cloud Services, a suite of digital self-care tools that enables patients and clinicians to gain insights and information either through Babylon directly or through Babylon's roster of top-tier partners

  • with approximately 6 million patient interactions

💚 Alan

👉🇫🇷Alan le compagnon santé 100% digital (Les Echos)

  • We are very pleased to be included in this article which tells the story of Alan from the beginning.


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