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The Amazon Effect: Rethink Your Corporate Structure

Each year, Jeff Bezos, the mastermind and business innovator behind Amazon shares a letter with his shareholders. These letters, dating back to 1997, serve as a goldmine of independent and innovative thinking for today’s business leaders. Our series, The Amazon Effect, focuses around these letters – and today we’re discussing shifting your corporate structure.

It’s not a coincidence that Amazon is one of the largest and most successful companies in the world. Jeff Bezos designed it specifically to become what it is today, and all signs point toward it continuing to grow. But, they’re also unique in ways that the average consumer might not notice: in their corporate structure and vision.

Let us ask you a question: how many people have decision-making power in your business? One person? Two people? An entire team? If you answer is more than a few people, then think about what types of decisions they are allowed to make.

If you aren’t a business owner, then think about what decisions you’re allowed to make and which decisions you’d have to ask someone about. Most organizations work in a very simple way: a top-down corporate ladder. There’s the chief at the top, and each person beneath him is in charge of increasingly smaller bites of the decision-making process.

Say, someone at the bottom of this ladder has a great idea. How many steps would that person have to go in order to get that idea to the highest rung on the ladder?

This corporate structure tends to work well for input/output. There’s a clear delineation between the managers and the workers; the people in charge of departments and the people just working in them.

So, basic tasks are handed down from above and completed by those below. Very simple, straightforward and effective. But this structure also stifles creativity.

Those that are “below” won’t feel the freedom to create or innovate in any way - their job is just to complete the work created by someone else. Bezos rejects this notion.

In his letter from 2013, he wrote about how Amazon actively seeks to decentralize decision-making. Power and decision-making are widely distributed, giving more people the opportunity to act with autonomy, or at the least be able to speak directly with someone who can.

This allows for freer movement of ideas and helps to fast track ideas from thought to practice.

Consider this for your business. How well divided is decision-making? Are you empowering the people in your charge to make decisions and to move your business forward? Or are most of the decisions clogged up in a pipeline, waiting for a yay or nay from just one or two people?

In our series, “The Amazon Effect” we’ll delve further into Bezos’ yearly letters to shareholders and how they can help you and your small business. Keep checking back for more.

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